Professional Liability Insurance

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:

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.

Reporting frequency

Disclosure notices must be submitted to the AMF through AMF E-Services twice a year for the following periods:

  • Period ending June 30 (period from January 1 to June 30)
  • Period ending December 31 (period from July 1 to December 31)

Forms concerned by these disclosures

These disclosures must be filed with the AMF through AMF E-Services within 30 days following the end of each period. Please refer to your "Disclosure schedule".

Disclosure schedule

To submit your disclosures to the AMF, you must:

  1. Sign in to AMF E-Services
  2. Validate the information in the identification section
  3. Select “Client File”, then “Disclosure schedule”
  4. Select “Insurance, F. Pl. and Mortgage Brokerage (ADFPS)” and click on “Display”
  5. Click on the disclosure concerned and attach the relevant form
  6. Submit the request

Change in disclosure frequency

Effective January 2024, only the disclosure relating to professional liability insurance claims will have to be filed each year.

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.

Firm

  • Attached as an employee
  • On behalf of, but not employed by, a firm
  • On behalf of two or more firms

Independent partnership

  • Employee
  • Partner

Independent representative

  • Trainee

Other terms

  • Extension of coverage
  • Defence costs

Sectors / Sector classes

  • Insurance of persons
  • Accident and sickness insurance
  • Group insurance of persons
  • Group insurance plans
  • Group annuity plans
  • Damage insurance
  • Personal-lines damage insurance
  • Commercial-lines damage insurance
  • Agent
  • Broker
  • Claims adjustment
  • Claims adjustment in personal-lines damage insurance
  • Claims adjustment in commercial-lines damage insurance
  • Claims adjuster employed by an insurer
  • Claims adjuster employed by an insurer in personal-lines damage insurance
  • Claims adjuster employed by an insurer in commercial-lines damage insurance
  • Financial planning
  • Group savings plan brokerage
  • Investment contract brokerage
  • Scholarship plan brokerage

Coverage

  • Errors
  • Fault
  • Gross fault
  • Negligence
  • Omissions

Notice

  • Cancellation
  • Renewal
  • Claim