Motor Vehicle Replacement Insurance: Beware Of Non-Compliant Practices

In a notice published on February 16, 2015, Quebec's Autorité des marchés financiers (AMF) warns distributors, firms and insurers involved in the distribution of replacement insurance products against engaging in certain distribution practices that, in its opinion, are not in compliance with An Act respecting insurance (Quebec Insurance Act), An Act respecting the distribution of financial products and services (Quebec Distribution Act) and various notices published by the AMF on the same topic.

This notice follows the recent assessment of penalties, ranging from $10,000 to $45,000, against nine car dealerships and a damage insurance firm. The notice is also intended to make the public aware of certain non-compliant practices relating to the offering and sale of replacement insurance and to serve as a warning to insurers who offer such products through distributors.