Insurer activities are defined in section 2 of the Act and consist in undertaking to make a payment under an insurance contract if a risk covered by the insurance occurs. They include acting as surety or, for the purposes of a life or fixed-term annuity contract, as debtor.

Insurance contracts, suretyship contracts and annuity contracts are defined in articles 2389, 2333 and 2367 of the Civil Code.

This concept is defined in section 22 of the Act. With regard to non-marine insurance, and therefore in insurance of persons and damage insurance, an insurer carries on its insurer activities in Québec if it underwrites a contract governed by an Act of Québec or if its offer or invitation is made with a view to underwriting such a contract, unless that Act applies only by reason of the parties’ consent (s. 22, 1st par. IA).

With regard to marine insurance contracts or suretyship contracts, the insurer carries on its insurer activities in Québec if its offer or invitation is accepted in Québec by a person resident there, or if it signs or delivers a contract in Québec (s. 22, 2nd par. IA).

The carrying on by one or more persons of an organized economic activity, whether or not it is commercial in nature, consisting of producing, administering or alienating property, or providing a service, constitutes the operation of an enterprise (art. 1525, 3rd par., Civil Code).

Under the second paragraph of section 21 of the Act, the carrying on of insurer activities by each of the parties in a reciprocal union is considered to constitute the operation of an enterprise.

It must be determined whether or not there is the operation of an enterprise, regardless of any other activities that may be carried on by the operator. Therefore, if the insurer activities are even slightly incidental to another commercial activity, then the moment they constitute the operation of an enterprise, the AMF’s authorization is required.

The exceptions to the obligation to be authorized are set out in sections 27 and 28 IA.

Under section 27 IA, authorization is not required for:

• A professional syndicate which, in order to carry on insurer activities, establishes and administers a special indemnity fund in accordance with subparagraph 1 of the second paragraph of section 9 of the Professional Syndicates Act, CQLR, c. S 40 (s. 27, 1st par. (1) IA);
• Anyone who, in terms of insurance, enters only into contracts of additional warranty under which gives an undertaking to another party to directly or indirectly assume any portion of the cost of repairing or replacing property or any part of the property in case of defect (s. 27, 1st par. (2) IA);
• An insurer that, in Québec, delivers only damage insurance contracts through a firm acting through a special broker governed by the Act respecting the distribution of financial products and services, CQLR, c. D-9.2, if the insurer has no establishment in Québec and does not publicize its business in Québec (s. 27, 1st par. (3) IA);
• An employer that establishes an uninsured employee benefit plan for the benefit of its employees (s. 27, 1st par. (4) IA);
• Each of the parties in a reciprocal union, if the AMF’s authorization has been granted to the union (s. 27, 1st par. (5) IA).

Section 28 IA provides two exceptions where insurer activities may be carried on without the AMF’s authorization. Unlike section 27, however, this section provides that such an authorization may be granted to a legal person that applies for it. The two exceptions cover the following persons:

• A person constituted under the laws of a jurisdiction other than Québec who carries on only reinsurer activities in Québec (s. 28, 1st par. (1) IA); and
• A person who, without being a Québec insurer, carries on insurer activities in Québec only as surety or as debtor of an annuity (s. 28, 1st par. (2) IA).

Documents to be enclosed with the authorization request for all insurers, except SROs and RUs

Information/documents	Source	Clarification by the AMF
1. A list of the applicant’s directors and officers, including their names and domiciliary addresses;	s. 34(1) IA	Including a senior management organization chart.
2. The résumé of each director and officer;	s. 34(2) IA	n/a
3. A copy of the applicant’s constituting act;	s. 34 (3) IA	n/a
4. A copy of the applicant’s by-laws or of any other document established for the same purposes;	s. 34(3) IA	n/a
5. If applicable, a copy of the applicant’s audited financial statements for its most recent fiscal year ended;	s. 34(4) IA	If the applicant is not already in operation, the financial statements of the partnership or company that, directly or indirectly, controls the applicant.
6. If applicable, the financial statements that the applicant is required to file with its home regulator, to the extent and in the manner that may be determined by regulation of the AMF;	s. 34(4) IA s. 33(2) RARI	Financial Condition Test (FCT) or Dynamic Capital Adequacy Test (DCAT); and In damage insurance: In damage insurance: P&C annual return; In insurance of persons: Life annual return.
7. The applicant’s three-year business plan that specifies, in particular:	s. 34(5) IA	In addition to the information prescribed under the other items, the business plan must contain: The applicant’s target markets and the business opportunities it is seeking to exploit; A description of governance in connection with Chapter VI of Title II IA; The interest of its project for the insurance market in Québec; Financial forecasts or projections, for at least three complete years of operation, specifying, if applicable, the impact that adding the new activities in Québec will have on the income statement, balance sheet and capital test, including the assumptions used.
7.1 The means by which the applicant will deal with clients for the insurance contracts it intends to underwrite;	s. 34(5) IA	The list of firms, independent representatives and claims adjusters in Québec; A description of the client service and means implemented to protect its reputation in connection with Title II, Chapter IV, “Commercial practices.”
7.2 The activities it will carry on;;	s. 34(5) IA	A detailed description of all products and services that will be marketed in Québec. The applicant will have to show that the classes applied for are those required for the activities it intends to carry on in Québec.
7.3 If applicable, the activities it carries on or will carry on outside Québec;	s. 34(5) IA	A description of the activities carried on outside Québec; The policies in in effect within the insurer’s organization; The relationships and key outsourcing agreements between the applicant and its group or third persons; The ceded reinsurance agreements and related terms (including names of reinsurers).
8. The other documents prescribed by regulation of the AMF:	s. 34(6) IA	n/a
8.1 Confirmation by the authorities in the place where it was constituted that the applicant is solvent and complies with the laws and regulations of its jurisdiction.	s. 33(3) RARI	n/a
9. The investment policy.	ss. 82 and 480 IA	n/a
10. The CCIR licence application form, duly completed;	s. 480 IA	Visit the website CCIR – Application for an insurer's license This link will open in a new window
11. A copy of the declaration of registration filed with the Registraire des entreprises du Québec (Québec enterprise registrar or REQ), including the insurer’s French name. .	s. 480 IA	n/a
12. For applications made for the automobile insurance class, the documents/information required under the AIA, if applicable, including:	Automobile Insurance Act (AIA)	Refer to: Automobile insurance
12.1 The rate manual;	s. 180 AIA	n/a
12.2 The ASP and FCSA systems implementation work plan.	ss. 177 and 181 AIA	n/a
13. An attestation that the insurance policies comply with Québec regulations;	s. 480 IA	n/a
14. The fees and charges prescribed by government regulation.	s. 34(7) IA	Refer to the Fees and costs payable to the AMF section of the AMF website.

Contents of the application for authorization submitted by an SRO

Information/Document	Source	Clarification by the AMF
1. The applicant must demonstrate that he has a capital deemed sufficient by the AMF.	s. 23, 2nd par. IA	The Authority may grant its authorization to a reciprocal union even though they haven’t at least $5,000,000 in capital
2. The applicant must show that it is able to comply with the applicable provisions of the IA;	s. 30, 2nd par. IA	A declaration signed by a person authorized to do so regarding compliance with the laws, regulations and guidelines applicable to the legal person must be provided.
3. The applicant must include the following information:	s. 30, 3rd par. IA	n/a
3.1 Its name and the name it intends to use in Québec if different;	s. 30, 3rd par. (1) IA	n/a
3.2 The name of the mandatary referred to in subparagraph 3 of paragraph 1 of section 188 IA (i.e., the mandatary who will be the same for all the parties in the union, to represent them and perform the acts necessary for the union’s operation, among other things);	s. 30, 3rd par. (1) and s. 32 IA	n/a
3.3 The address of its head office (which is that of its mandatary) and, if the latter is not in Québec, the proposed address of its principal establishment in Québec, if any;	s. 30, 3rd par. (1) IA	n/a
3.4 If the applicant’s head office is outside Québec, the name and address of the attorney designated under the Act respecting the legal publicity of enterprises (Legal Publicity Act);	s. 30, 3rd par. (1) IA	n/a
3.5 The classes of activities for which it is applying for the AMF’s authorization;	s. 30, 3rd par. (2) IA	A reciprocal union may not carry on activities in the field of insurance of persons (s. 42, 2nd par. IA)
3.6 If applicable, the conditions and restrictions it wishes to have attached to the authorization;	s. 30, 3rd par. (2) IA	n/a
3.6 The name and address of the actuary and the auditor;	s. 30, 3rd par (3) IA	Refer to s. 116 IA for the qualifications. Add telephone no. and e-mail address.
3.7 If the applicant is not a Québec insurer, the name of the regulatory authority of its domicile (home regulator) (i.e., under s. 31, 2nd par. IA, the AMF, unless the contract to which each partie in the union is a party designates another competent authority as such and the latter authority has issued a licence to the union or granted it an authorization similar to that granted by the AMF under this Act);	s. 30, 3rd par. (5) IA	n/a
3.8 If applicable, the name and address of the attorney designated under section 26 of the Legal Publicity Act This link will open in a new window;	s. 30, 3rd par. (6) IA	Section 26 of the Legal Publicity Act states: “A registrant who is neither domiciled nor has an establishment in Québec must designate an attorney residing in Québec, unless exempted from that requirement by regulation of the Minister.”
3.9 The other information prescribed by regulation of the AMF.	s.30, 3rd par. (7) IA	No document required by regulation.

Documents to be enclosed with the application for authorization – Reciprocal unions