The Sovereign General Insurance Company fined $560,000

Decisions and Freeze and cease trade orders Insurance

Montréal – In a decision handed down on November 10, 2008 in the Court of Québec (Criminal and Penal Division), district of Montréal, Judge Serge Boisvert found The Sovereign General Insurance Company ("The Sovereign") guilty on the 56 charges brought against it by the Autorité des marchés financiers (AMF) in January 2006 and ordered the company to pay a total fine of $560,000.

The Sovereign was found guilty of:

  • consenting to and/or authorizing the issuance of inventory insurance policies by Flanders Insurance Management and Administrative  Ltd. ("Flanders"), a firm not registered with the AMF, to recreational vehicle dealers in particular, thereby violating section 71 of the Act respecting the distribution of financial products and services (the "Act") and committing the offence under section 482 of the Act.

In his decision, Judge Boisvert noted that The Sovereign was aware, as early as April 2005, of the AMF investigation into the polices distributed without a licence by Flanders in Québec, that the company did not appear to take any steps as requested by the AMF, and that it agreed to renew the policies in August 2005.

In April 2007, Flanders, which is based in Winnipeg, pleaded guilty to the 210 charges brought against it by the AMF for acting as a firm without being duly registered as such and was consequently ordered to pay fines totalling $210,000.

The Sovereign has 30 days to appeal the Court of Québec decision.

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

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