Montréal – The Autorité des marchés financiers (the “AMF”) is notifying Assumption Mutual Life Insurance Company (“Assumption”) and Excellence, Compagnie d’assurance-vie (“Excellence”) in respect of an order to cease accepting insurance proposals no later than February 1, 2005 from automobile dealers for personal automobile credit insurance products.
Under the current process, these personal credit insurance products are offered by dealers to clients who wish to buy insurance to ensure repayment of the balance on an automobile loan or, as the case may be, on a long-term lease in the event of death or disability. The administrators of these insurance programs are Lepage Bisson & Associés on behalf of Excellence and Le Groupe HPS (9045-8779 Québec inc.) on behalf of Assumption. Both administrators are registered with the AMF as firms in insurance of persons.
According to the AMF, automobile dealers are not authorized to distribute personal automobile credit insurance products under An Act respecting the distribution of financial products and services (“Act”).
Dealers may only offer these products on condition they follow the system provided for under the Act. It includes the following obligations:
- disclosing any remuneration in excess of 30% of the cost of the premium;
- offering a group insurance product;
- furnishing a distribution guide to the client before insurance is purchased;
- freedom of choice for the client to sign a contract with the insurer he prefers;
- possibility for the client to cancel the contract within 10 days of signing.
The AMF intends to take all measures necessary to ensure compliance with the Act.
Under the notice, Assumption and Excellence may present their observations to the AMF by November 29, 2004, after which the AMF will determine whether to issue an order.
Established on February 1, 2004, the Autorité des marchés financiers 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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For More Information:
Philippe Roy (514) 940-2176
Issuers, dealers, advisers and representatives: (877) 525-0337, dial 9 for English, then dial 1 for industry
Consumers and investors: (877) 525-0337, dial 9 for English, then dial 2 for consumers