Under the Act respecting the distribution of financial products and services (the 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
- civil liability insurance taken out to use an all-terrain vehicle trail
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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As of June 13, 2019, insurance product distributors will give this fact sheet to clients when offering them an insurance product so that they are better informed.
Fact sheet (pdf - 136 KB)This link will open in a new windowUpdated on 12 June 2019fact sheet regarding the rights for a consumer, buying an insurance without a representative
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 also provide the AMF with the following information regarding the insurance products that will be distribute:
- 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 such a removal.
To notify the AMF, insurers that wish to add a new DWR file or modify or remove an existing DWR file, must:
- Complete the new "Product offered through a distributor (pdf - 109 KB)This link will open in a new windowUpdated on 25 June 2019FORM PRODUCT OFFERED THROUGH A DISTRIBUTOR" form for each new DWR file (not required for existing files). The form is dynamic, meaning that it can be completed on-screen. You can then print, sign and send it by e-mail to the AMF.
- Complete the new "List of Distributors Template (xlsx - 16 KB)This link will open in a new windowUpdated on 11 June 2019Gabarit liste distributeurs distribution sans représentant DSR divulguer", which includes a new column, “Hyperlink or any other means to access the distributor’s offer through the Internet.” Please use this new template, not an older version.
The Guide for Completing a List of Distributors (pdf - 484 KB)This link will open in a new windowUpdated on 12 June 2019guide, list, distributors, template, distribution without a representative, DWR has been updated to help you complete this new column.
The AMF will only accept the forms and templates sent by e-mail to email@example.com.
Insurers must disclose annually to the AMF the following information 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. These documents replace the distribution guide, which had to be delivered in accordance with the Distribution Act before June 13, 2019.
The summary must, in particular:
- explain the product. It must present the information set out in the Regulation, including the contact information of the insurer and the distributor, and the eligibility criteria, coverage, exclusions and limitations related to the product.
- 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.
An insurance product 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 the summary.
The insurer mandates the distributor to deliver the summary to clients at the time it offers the product to them. The distributor must also provide the client with a fact sheet in the form set out in Schedule 2 of the Regulation.
The insurer ensures that the distributor complies with the obligations provided when the sale is made remotely and, consequently, does not permit the documents to be given 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.
Distribution without a representative enables an insurer to 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 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.
Insurers that filed a distribution guide with the AMF before June 13, 2019 can continue to use it during the year following the coming into force of the Regulation, i.e., until June 13 2020. During that time, delivery of the guide is equivalent to the delivery of the summary and the fact sheet. Insurers whose distributors already deliver a fact sheet must continue to require its delivery during the one-year transition period. Insurers that rely on the transition period and that continue to use a distribution guide must make the guide accessible on their websites.
Insurers also benefit from a one-year transition period, until June 13, 2020, to make accessible on their websites a specimen of the policy or the insurance certificate as well as any available endorsement, if applicable.
Supervision of distributors
Insurers must monitor and supervise the offering of insurance products by their distributors. They must therefore adopt and implement procedures that enable 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
Insurers have a one-year transition period, until June 13, 2020, in order to comply with these obligations.
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
Change to the invoicing method for DWR
As of June 13, 2019, there will no longer be separate fees for DWR, such as fees for the examination of a distribution guide or fees for the analysis of amendments to the guide. These fees will now be included in the invoicing for the AMF’s insurer supervisory activities.
Documentation and tools
Product Offered Through a Distributor (pdf - 109 KB)This link will open in a new windowUpdated on 25 June 2019FORM PRODUCT OFFERED THROUGH A DISTRIBUTOR
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.
Guide for Completing a List of Distributors Template
(pdf - 484 KB)This link will open in a new windowUpdated on 12 June 2019
guide, list, distributors, template, distribution without a representative, DWR
List of Distributor - Template
(xlsx - 16 KB)This link will open in a new windowUpdated on 11 June 2019
list distributors template distribution without a representative DWR
- List of Distributor - Template (xlsx - 16 KB)This link will open in a new windowUpdated on 11 June 2019