Insurance Organization

Montréal – In its weekly Bulletin issued later today, the Autorité des marchés financiers (AMF) will publish a notice on motor vehicle replacement guarantees. The notice states that, in the opinion of the AMF, a motor vehicle replacement guarantee is an insurance product subject to AMF oversight.

Motor vehicle replacement guarantees must therefore be issued by insurers whose regulatory framework -- administered by the AMF -- gives consumers better protection against the risks of insolvency. Consumers will now be able to contact the AMF to ask for information about motor vehicle replacement guarantees, file a complaint and benefit from mediation services. AMF oversight will also cause contracts to be standardized and thereby better identify the roles and responsibilities of each party involved.

Mindful of the impact that its position might have on the current sales network for replacement guarantees, the AMF considers it advisable to provide the main network stakeholders with a 12-month time period to carry out the changes needed for compliance with the Act respecting the distribution of financial products and services. During this period, the AMF will work with the main stakeholders to ensure a harmonious transition and the protection of consumers' interests.

This notice is further to the two consultations on oversight of replacement guarantees conducted by the AMF in 2004 and 2006, research carried out by the AMF and recent court decisions related to the qualification of motor vehicle replacement guarantee products. It is part of the AMF's mission of protecting consumers' interests.

The notice (Avis de l’Autorité des marchés financiers relatif aux garanties de remplacement automobiles) and Q&As will be published in section 3.1 of the AMF Bulletin, volume 6, number 12, dated March 27, 2009.

The Autorité des marchés financiers (AMF) is the regulatory and oversight body for Québec's financial sector.

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