On June 1, 2023, the AMF published regulatory amendments relating to professional liability insurance. The regulatory amendments are intended to, on the one hand, increase consumer protection and, on the other, relax certain controls put in place by the AMF to monitor professional liability insurance policies and ensure their compliance.

The amendments primarily involve four elements:

• Addition of a clause requiring consistency with the regulatory requirements of the Act respecting the distribution of financial products and services This link will open in a new window (the "Distribution Act");
• Coverage respecting gross fault;
• Clause extending the coverage period; and
• Proof of maintenance of professional liability insurance at policy renewal.

Transitional provisions are provided to give insurers enough time to make the necessary adjustments to their contracts. Representatives and registrants that purchase or renew their insurance contracts between June 1 and September 30, 2023 will have to ensure that their insurance contracts are consistent with the new regulatory requirements not later than 12 months after purchase or renewal.

In all other situations, the insurance contract covering registrants’ and representatives’ liability will have to be consistent with the new regulatory requirements not later than June 1, 2024.

Disclosures

The following disclosures apply to authorized insurers that provide professional liability insurance coverage to representatives and registrants governed by the Act respecting the distribution of financial products and services This link will open in a new window or the Securities Act This link will open in a new window for the mutual fund dealer and scholarship plan dealer categories.

1- Non-renewal or cancellation (termination) of a professional liability insurance contract

The insurer must complete and send the form Notice of non-renewal or cancellation (pdf - 125 KB)This link will open in a new windowUpdated on September 18, 2023 by mail if it decides not to renew or to cancel a professional liability insurance policy.

The insurer must send the notice to the AMF not less than 30 days prior to the date of non-renewal or cancellation, or upon receiving notice of non-renewal or cancellation.

2- Professional liability insurance claims

The insurer must complete and send the form Notice of claim (pdf - 118 KB)This link will open in a new windowUpdated on September 18, 2023 by mail or submit it through AMF E-Services to notify the AMF of any claim relating to professional liability (E&O) insurance.

When responding to semi-annual disclosure requests (disclosure schedule), the insurer should complete and submit the form Absence of claims (pdf - 122 KB)This link will open in a new windowUpdated on September 18, 2023 through AMF E-Services if it does not have any claims to report for a given period.

3- Wording of professional liability (E&O) insurance contracts

When responding to semi-annual disclosure requests (disclosure schedule), the insurer should complete and submit the form Insurance policy wording (new or amended) (pdf - 134 KB)This link will open in a new windowUpdated on September 18, 2023Insurance wording, New wording, amendments wording, Insurance wording, insurance policies through AMF E-Services if new wording is added or amendments are made to an existing professional liability (E&O) insurance policy.

When responding to semi-annual disclosure requests (disclosure schedule), the insurer should complete and submit the form Insurance policy wording (no new wording or amendments) (pdf - 149 KB)This link will open in a new windowUpdated on September 18, 2023 through AMF E-Services if no new wording is added or no amendments are made to an existing professional liability (E&O) insurance policy for a given period.

Lexicon of terms to use in professional liability insurance policies

The AMF recommends that insurers use the following terms when drafting their professional liability insurance contracts.