Insurance Decisions and Freeze and cease trade orders
Montréal – The Agence nationale d’encadrement du secteur financier (also known as the “Autorité des marchés financiers” or “AMF”) has rendered its first decisions regarding claims filed by holders of certain Lloyd’s insurance policies purchased through three damage insurance firms: Loyalist Insurance Brokers Inc., Loyalist Insurance Managers Inc. and CUAI Gestionnaires d'assurances inc. (hereafter, “Loyalist”).
Given the position of Lloyd’s, which does not intend to recognize the validity of the policies and which claims that it was not remitted the related premiums, the AMF considers that claimants who suffered damage from Loyalist’s fraudulent acts should be compensated.
After reviewing the specific facts of this case, the AMF’s compensation branch will compensate claimants holding policies not recognized by Lloyd’s who have suffered damage and who have filed a claim supported by the relevant documentation. The following may therefore be compensated:
- unearned insurance premiums, i.e. premiums paid in advance for the period following the time at which the fraudulent acts were discovered, and
- losses which occurred before the fraudulent acts were discovered.
Note, however, that various individual confirmations will be required. Before paying compensation – which could surpass $ 6 million – a specific analysis of each of the 161 claims filed will be necessary. Compensation will be paid over the next few months and claimants will receive a decision giving reasons.
When the AMF compensates someone, it is subrogated in the rights of the victim up to the amount of the compensation paid. The AMF will therefore institute recourses in subrogation against the representatives, firms and insurers involved to recover the amounts paid out.
As well, analysis of the eligibility of claims filed by automobile dealers insured under a “contractual commitment policy” purchased following the sale of replacement guarantees is continuing. The AMF will announce its decision on this issue once as it has been reached.
To read press releases already published on this matter, please visit the AMF web site and go to “Access to the sites of the organizations merged into the Autorité”. Click on the link for the Fonds d’indemnisation des services financiers (FISF), then on the link to FISF press releases.
The AMF administers the FISF, which is responsible for compensating people who were the victim of fraud, fraudulent tactics or embezzlement for which a firm, an independent representative or an independent partnership can be held liable in connection with his or its activities governed by the Act respecting the distribution of financial products and services. Compensation is limited to $200,000 per claimant. To obtain this protection, a claim must be filed with the AMF, which will analyze it and rule on its eligibility. This process takes at least a few months before a decision can be made. The claimant must be able to prove that he meets the guidelines for compensation and, to do so, he must provide supporting documents to establish the merits of his claim with respect to the embezzlement of which he is a victim. A claim must also meet other requirements. For example, it must be filed in the year following the discovery of the fraud on which a claimant was the victim. A claim form and further information are available on the AMF web site at www.lautorite.qc.ca/consommateur/demande-indemnisation.en.html.
Established on February 1, 2004, the Autorité des marchés financiers (AMF) is the regulatory and oversight body for Québec's financial sector. The AMF consists of the Commission des valeurs mobilières du Québec, the Bureau des services financiers, the Régie de l'assurance-dépôts du Québec, the Fonds d'indemnisation des services financiers and the Inspector General of Financial Institutions.
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