Under the Act respecting the distribution of financial products and services (the "Distribution Act"), certain insurance products can be offered by distributors rather than by certified representatives.
Under the Act respecting the distribution of financial products and services This link will open in a new window (the “Distribution Act”) certain insurance products can be offered by distributors rather than by certified representatives.
A distributor is a person whose activities are in a field other than insurance and who offers, as an accessory, for an insurer, an insurance product:
- related solely to goods sold by the person, or in respect of which the person secures a client’s adhesion.
Products may include:
- life, health and loss of employment insurance to cover a mortgage or car loan
- travel insurance offered by a travel agency
- replacement insurance offered by an automobile or recreational vehicle dealer
- life insurance to cover the balance on a credit card
The insurer’s obligations
The provisions related to distribution without a representative are set out in the Insurers Act, the Distribution Act and the Regulation respecting alternative distribution methods (the “Regulation”).
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Distributors give this fact sheet to clients when offering them an insurance product so that they are better informed.
Disclosures to the AMF
Before offering an insurance product through a distributor, an insurer must disclose the following information to the AMF:
- the name and contact information of the third party to which the insurer has entrusted the performance of the obligations of an insurer, if applicable
- the hyperlink or means to access the distributor’s offer through the Internet, if applicable
- the contact information of the insurer’s assistance service
The insurer must notify the AMF of any change to the above information within 30 days of such change, if applicable.
The insurer must notify the AMF with the following information regarding the insurance products that will be distributed:
- the name and address of each distributor
- the insurance products each distributor will distribute
- a description of the insurance coverage provided by each product
The insurer must notify the AMF of any change to this information, if applicable.
An insurer that removes a distributor must indicate to the AMF the reasons for removing the distributor.
You can use AMF E-Services to add, update, remove and consult DWR files. Simply click on Insurer and select Manage DWR files.
You can also use E-Services to add, update and remove distributors and consult related information. To do so, click on Client File then on Manage business relationships and select the Distribution without a representative sector of activity.
We have included guides and instructions in E-Services to make your experience more intuitive. Our Information Centre can also provide you with support.
Insurers must disclose the following information annually to the AMF for each product offered through a distributor:
- the number of insurance policies and certificates issued and the amount of premiums written
- the number of claims and the amount of indemnities paid
- the number of rescissions and cancellations
- the remuneration paid to all distributors and third parties to which the obligations of the insurer or distributor were entrusted
The AMF will send insurers a structured file, which they must use for this annual disclosure. This file contains an “Instructions” tab, which the insurer can refer to in order to complete its annual disclosure.
Disclosures to clients
Insurers must ensure that their distributors provide clients with a summary and a fact sheet.
The summary must, in particular:
- explain the product. It must present the information set out in the Regulation, including the insurer’s and the distributor’s contact information and the product’s eligibility criteria, coverage, exclusions and limitations.
- be written in language that is clear and specific so as to highlight the essential elements for informed decision-making by the client and not cause confusion or misunderstanding.
- be concise. The insurer may refer clients to the relevant sections of the policy if they wish to obtain additional information.
A Summary Drafting Guide (pdf - 4 MB)This link will open in a new windowUpdated on 20 June 2019This detailed guide sets out the main rules to be followed to prepare a clear and effective summary. has been designed to help insurers draft insurance product summaries.
The insurer mandates the distributor to give the summary to clients at the time it offers the product to them. The distributor must also provide the client with a fact sheet (pdf - 147 KB)This link will open in a new windowUpdated on 12 June 2019 in the form set out in Schedule 2 of the Regulation.
The insurer ensures that the distributor complies with the obligations that apply when the sale is made remotely and, consequently, does not permit the distributor to give the documents to clients before the sale of the product. These obligations are as follows:
- obtain the client’s consent to receive the summary and the fact sheet at a later date
- mention the information contained in those documents to the client
An insurer can authorize the distributor to offer its products on the distributor’s website. In this case, the obligations are those applicable to distribution without a representative and not those applicable to products or services offered via the Internet.
Under the distribution without a representative regime, an insurer may exceptionally offer travel insurance products through its non-certified employees. If, however, the insurer decides to offer these products directly on its website, it must then comply with the obligations applicable to products or services offered via Internet.
The fact sheet (pdf - 147 KB)This link will open in a new windowUpdated on 12 June 2019 describes the context of the sale and the mandatory disclosures. This fact sheet cannot be modified.
The insurer must make the product summary and a specimen of the policy or the insurance certificate as well as any endorsement, if applicable, accessible on its website for each product offered by a distributor. The insurer cannot outsource this obligation to a distributor. It is not necessary to provide the AMF with a copy of these documents, except upon request.
Supervision of distributors
Insurers must monitor and supervise the offering of insurance products by their distributors. They must therefore adopt and implement procedures that ensure the supervision and training of their distributors.
The training provided by an insurer must cover the following:
- the insurance product, particularly the coverage offered, the eligibility criteria and the applicable exclusions and limitations
- the distributor’s legal obligations
- the insurer’s complaint processing policy
- the practices promoting the fair treatment of clients
- the filing of a claim
Specific prohibitions are set out for insurers offering replacement and debtor life, health and employment insurance through distributors. These prohibitions focus on the remuneration practices of distributors that undermine the fair treatment of consumers. The insurer may not:
- enable the distributor to keep its remuneration within a time period not commensurate with the term of the product, which time period may not, however, be less than 180 days
- pay to the distributor a bonus or a share in the profits based on contract experience
- set different commission rates applicable to a distributor for products with similar insurance coverage
Invoicing method for DWR
Fees are included in the invoicing for the AMF’s insurer supervisory activities.
Documentation and tools
Summary Drafting Guide (pdf - 4 MB)This link will open in a new windowUpdated on 20 June 2019This detailed guide sets out the main rules to be followed to prepare a clear and effective summary.
2019 Insurer disclosure analysis report (pdf - 703 KB)This link will open in a new windowUpdated on 1st June 2020This analysis report is based on data collected from 20 insurers for the years 2016, 2017 and 2018. It provides a picture as at December 31, 2018 of the market for insurance products offered by dealers, namely replacement insurance (Q.P.F. No. 5) and debtor life, health and employment insurance (DLHE).