Application
This procedure is applicable to authorized Québec insurers, constituted as business corporations or mutual companies, that apply for authorization to grant a hypothec or other security on their movable property for purposes not already provided for by law.
Application for authorization
Section 243 of the IA provides that no insurance company may, without the AMF’s authorization, grant a hypothec or other security on its movable property, except:
- to secure a short-term loan contracted to meet liquidity requirements (s. 243, 1st par, subpar. (1) IA);
- to obtain an advance under section 40.5 of the Deposit Institutions and Deposit Protection Act (chapter I-13.2.2), or if it receives deposits outside Québec, to obtain an advance from a federal or provincial body that guarantees or insures deposits (s. 243, 1st par., subpar. (2) IA); or
- to become a member of a securities clearing house recognized by the AMF as a self-regulatory organization or of any association the object of which is to organize a clearing and settlement system for payment instruments or securities transactions, and to provide the necessary guarantees (s. 243, 1st par., subpar. (3) IA).
For all other purposes, an application containing the information and documents indicated in the checklists below must be submitted to the AMF.
The provisions pertaining to an application for authorization to grant a hypothec or other security on movable property are found in section 243 of the Insurers Act 
This link will open in a new window (“IA”), CQLR, c. A-32.1.
Checklists
The following checklists summarize the information and documents to be included in or with the application for authorization to grant a hypothec or other security on movable property (hereinafter, “security”).
Information to be included in the application
| Information/Documents | Source | Clarification by the AMF |
|---|---|---|
| 1. The context in which the application is being made and the objective of the security | s. 480 IA | N/A |
| 2. The intended purpose(s) for which authorization to grant security is being sought (description and circumstances) | s. 480 IA | N/A |
| 3. The limits provided for each purpose and the overall limit, if applicable | s. 480 IA | Provide evidence that the parameters used to establish the limits are reasonable |
| 4. A description of the maximum impact on the insurer’s financial position, particularly liquidity and capital | s. 480 IA | N/A |
| 5. The corporate approvals required for each purpose (for exceptions, etc.) | s. 480 IA | N/A |
| 6. Monitoring and control measures such as reports detailing the security and security beneficiaries | s. 480 IA | N/A |
Documents to be included with the application
| Information/Documents | Source | Clarification by the AMF |
|---|---|---|
| If applicable, attach the latest version of the security policy or any other document establishing a governance framework for the granting of security. | s. 480 IA | The AMF considers adopting a security policy a sound and prudent management practice. |
Granting of authorization
The AMF grants its authorization when the following conditions have been met:
- The applicant has provided the required documents and information;
- The applicant has demonstrated that:
- The granting of security will not materially affect the insurer’s financial position and the capital adequacy requirements will continue to be complied with;
- Mechanisms have been adopted to provide a clear framework for the granting of security and ensure adequate monitoring.
The AMF may, in granting its authorization, require any undertaking it considers necessary to ensure compliance with the Act (s. 243, 2nd par. IA).
The AMF, after rendering its decision, sends the insurer a document attesting it.
Fees and costs payable
Refer to the complete list of fees and costs payable to the AMF for more information.
Processing time
Except in specific circumstances, the AMF will process an application within 90 days from the date the application is complete.