AMF publishes regulatory amendments relating to professional liability insurance and representatives’ outside activities
Montréal – The Autorité des marchés financiers (the "AMF") today published regulatory amendments relating to professional liability insurance and the outside activities of representatives. This publication follows the consultation on the matter held from December 8, 2022 to February 6, 2023.
Professional liability insurance
The AMF is making regulatory amendments to, on the one hand, increase consumer protection and, on the other, relax certain controls put in place by the AMF to monitor professional liability insurance policies and ensure their compliance.
The amendments primarily involve four elements:
- Addition of a clause requiring consistency with the regulatory requirements of the Act respecting the distribution of financial products and services (the "Distribution Act");
- Coverage respecting gross fault;
- Clause extending the coverage period; and
- Proof of maintenance of professional liability insurance at policy renewal.
Transitional provisions are provided to give insurers enough time to make the necessary adjustments to their contracts. Representatives and registrants that purchase or renew their insurance contracts between June 1 and September 30, 2023 will have to ensure that their insurance contracts are consistent with the new regulatory requirements not later than 12 months after purchase or renewal.
In all other situations, the insurance contract covering registrants’ and representatives’ liability will have to be consistent with the new regulatory requirements not later than June 1, 2024.
For more information, including on the transition period, see the AMF's web page on professional liability insurance.
Representatives’ outside activities
The regulatory amendments also update the framework for outside activities ("dual employment" or "second occupation") of representatives governed by the Distribution Act.
Effective December 2, 2023, the regulatory provisions stating that certain activities and occupations are incompatible with the pursuit of activities as a representative will be replaced by a new, more flexible regime that maintains adequate consumer protection. Under this regime, representatives will be able to pursue an outside activity if they comply with the established rules. Firms will also have to comply with new requirements. In addition, the number of declarations to be made to the AMF will be reduced.
The new rules are aligned with those that came into effect for the securities sector in June 2022, with adjustments to take into account the specific characteristics of the sectors governed by the Distribution Act. They also support efforts to address the labour challenges facing the financial sector.
The Autorité des marchés financiers is the regulatory and oversight body for Québec’s financial sector.
Sylvain Théberge: 514-940-2176
Québec City: 418-525-0337
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