Montréal – The Autorité des marchés financiers (the “AMF”) today published the Regulation respecting the prohibition on requiring certain fees from holders of individual variable insurance contracts relating to segregated funds (the “Regulation”), which will come into force on June 1, 2023.
“The Regulation is in line with our work to enhance the fair treatment of clients and applies to both intermediaries and insurers, underscoring the fact that the fair treatment of clients is a responsibility that is shared among the individual participants in the distribution chain,” said AMF President and CEO Louis Morisset. “Implementing the Regulation will also contribute significantly toward our goal of harmonizing the frameworks for the distribution of mutual funds and segregated funds, while considering the particular characteristics specific to these investment products.”
The Regulation will apply to insurers authorized under the Insurers Act that have entered into individual variable insurance contracts and to firms, independent partnerships and independent representatives registered in the insurance of persons (Life and Health) sector under the Act respecting the distribution of financial products and services. It is intended to prohibit the practice of requiring deferred sales charges from clients, as this practice does not meet the objective of treating customers fairly. This prohibition covers individual variable insurance contracts entered into as of June 1, 2023.
On February 28, 2022, the AMF declared This link will open in a new window (in French only) that it was following up on the joint statement This link will open in a new window by the Canadian Council of Insurance Regulators and the Canadian Insurance Services Regulatory Organizations pertaining to segregated funds, and asked insurers operating in Québec to stop using deferred sales charges as of June 1, 2022. At the same time, the AMF announced that it would undertake regulatory work to prohibit their use effective June 1, 2023.
The Autorité des marchés financiers is the regulatory and oversight body for Québec’s financial sector.
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