April 12, 2018 Insurance Decisions and Freeze and cease trade orders

Montréal – An agreement has been reached between the Autorité des marchés financiers (the “AMF” or the “Authority”) and Chubb Life Insurance Company of Canada (“Chubb”) under which an administrative penalty of $450,000 was paid for non-compliance relating to the distribution of an insurance product, Sears Financial Guaranteed Issue Critical Illness Plan (the “Product”), offered to Sears credit card holders. The allegations against Chubb pertained more specifically to ACE INA Life Insurance (“ACE”), for which it holds the rights and assumes the obligations following a merger in October 2016.

Chubb acknowledged that it did not follow sound commercial practices in connection with the distribution of the Product and failed to comply with various provisions of the Act respecting insurance, CQLR, c. A-32, and the Act respecting the distribution of financial products and services, CQLR, c. D?9.2. In particular, it offered the Product through telemarketing firm employees, namely, individuals who were not certified by the AMF for such purpose, and it allowed certified persons active in the distribution of this product to not fully perform their roles.

The Product was offered in Québec for approximately four years, from 2012 to 2015. For the period from 2012 to 2014, ACE issued 10,622 insurance certificates and collected $1,087,706 in premiums.

ACE had already ceased to distribute this product via telemarketing in November 2015 and confirmed that it had implemented the necessary measures to ensure all its products were distributed in accordance with the law.

Moreover, Chubb has undertaken to notify all persons who are still insured with the Product that a certified representative is available to answer their questions.

The Autorité des marchés financiers is the regulatory and oversight body for Québec’s financial sector.

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