(Updated: October 2011) - Autorité des marchés financiers · PDF...

A-102 2nd Edition, 2002

(Updated: October 2011)

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A102 - T1 - 2

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NOTICE

Please take note that the expression "accident or health insurance" used in this manual has been replaced by the expression "accident and sickness insurance" in the exam questions in order to conform to the terms used in the new version of Regulation no. 1, in force March 1st, 2010. This change has no impact on the meaning of the questions.

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A102 - T1 - 2 Statutory and regulatory

amendments

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A-100-E2-2

Agence nationale d’encadrement du secteur financier

Statutory and Regulatory Amendments

Written by Ms. Hélène Ouellet, attorney Revised by Mr. Daniel Larrivée, attorney and Ms. Anne-Marie Beaudoin, attorney

Updated by Ms. Marie-Christine Dorval, attorney

Direction de la formation et de la qualification - April 2004

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Dear Readers,

As of February 1, 2004, the Agence nationale d’encadrement du secteur financier commenced its activities. This new organization, created under the provisions of the Act respecting the Agence nationale d’encadrement du secteur financier (Bill 107), acts under the name of the Autorité des marchés financiers (the AMF). Under this Act, the AMF has replaced the former Bureau des services financiers, acquiring its rights and assuming its obligations.

Only the supervisory structure has been modified. Excepting the amendments presented below, the regulations in force remain the same. The provisions of the Act respecting the distribution of financial products and services will continue to apply to persons or organizations according to current legal requirements.

This document, presented by the Autorité des marchés financiers, summarizes the amendments made to the Act respecting the distribution of financial products and services and to a number of related regulations covering disclosures and certain requirements concerning financial planners who are members of a professional order, and firms. Furthermore, a new complaint mechanism has been implemented as the result of the coming into force of certain provisions of Bill 107. In addition, please refer to Media Release no. 3, concerning the main directions affecting the processing of complaints, which was posted on the AMF’s Website in February 2004, in the « Industries Service’s section ».

Please note that the following reference manuals — Applying Legal and Legislative Concepts Pertaining to Accident or Health Insurance (A-102), Legal Concepts and Legislation in Damage Insurance and Claims Adjustment (A-104) and Insurance of Persons and Group Insurance of Persons (A-01A) — have not been updated with respect to these recent amendments. The AMF is making available this document, divided into three tables, with a view to keeping you well informed.

Otherwise, no changes have been made to any examination. This document is intended only to supplement previously available information.

The Direction de la formation et de la qualification, Autorité des marchés financiers

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AANN AACCTT RREESSPPEECCTTIINNGG TTHHEE DDIISSTTRRIIBBUUTTIIOONN OOFF FFIINNAANNCCIIAALL PPRROODDUUCCTTSS AANNDD SSEERRVVIICCEESS Following the proceedings surrounding the adoption of An Act respecting the Agence nationale d'encadrement du secteur financier (Bill 107) a number of sections of An Act respecting the distribution of financial products and services (Bill 188) have come into force or were amended.

Thus, in December 2002 and January 2003, the government brought into force sections 17, 26, 28, 31 and 32 of An Act respecting the distribution of financial products and services covering disclosures.

As well, it amended a number of provisions concerning financial planners belonging to a professional order, and firms. It also sets out provisions for implementing a new complaint resolution procedure.

The Autorité des marchés financiers invites you to consult Table 1 so that you may better understand the import of the main amendments made to An Act respecting the distribution of financial products and services. The coming into force of each amendment to the Act is also indicated.

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Table 1 An Act respecting the distribution of financial products and services (Bill 188)

Subjects Related

section(s) Import of amendments

DDII SS CC LL OO SS UU RR EE SS

1) Disclosure of compensation Sec. 17 Representatives must disclose to the person with whom they are transacting business (see sections 4.1 to 4.4 of Regulation no. 3):

• the compensation that they receive;

• any other remuneration or benefit determined by regulation to which they are entitled. For securities representatives, compensation must be disclosed according to the terms and conditions prescribed under the Règlement sur l’habilitation et certaines pratiques du domaine des valeurs mobilières. For other representatives, compensation shall be disclosed according to the terms and conditions of Regulation no. 3.

Coming into force: January 1, 2003

2) Disclosure of business relationships

Sec. 26 Insurance representatives must disclose1 to the persons with whom they are transacting business:

• the business relationships that their firms have with an insurer with which they are placing a risk;

• their relationships of ownership, whatever the percentage, involving the insurer;

• all other benefits or business relationships determined by regulation. Coming into force: January 1, 2003

1 At this time, disclosure applies only to property relationships. The regulations respecting the enforcement of obligations in connection with business relationships have not yet come

into force.

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Tableau 1 Act respecting the distribution of financial products and services (Bill 188)

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Subjects Related section(s) Import of amendments

3) Disclosure of the product and

its exclusions Sec. 28 Insurance representatives must, before making an insurance contract:

• describe the proposed product to the customer in relation to the needs identified and specify the nature of the coverage offered;

• indicate clearly to the customer any particular exclusion of coverage, if any, having regard to the needs identified and provide the client with the required explanations regarding such exclusions.

Coming into force: December 11, 2002

4) Disclosures regarding insurers Sec. 31 Representatives in insurance of persons, group insurance of persons, or damage insurance brokers must, before offering an insurance product, disclose to the person with whom they are transacting business (see sections 4.5 to 4.7 of Regulation no. 3):

• the names of the insurers whose products they are authorized to offer;

• any other information on those insurers prescribed by regulation. Coming into force: January 1, 2003

5) Disclosure of exclusive contracts

Sec. 32 Insurance representatives must disclose to the person with whom they are transacting business the fact that:

• they are acting for a firm that is an insurer;

• they are bound by an exclusive contract with a single insurer (see the Implementation Directive published by the Bureau des services financiers in May 2003).

Coming into force: January 1, 2003

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FFII NN AA NN CC II AA LL PP LL AA NN NN EE RR SS BB EE LL OO NN GG II NN GG TT OO AA PP RR OO FF EE SS SS II OO NN AA LL OO RR DD EE RR

Sec. 59 Sections 59 to 69 of Bill 188 concerning financial planners belonging to a professional order do not apply to a member of an order who already holds a certificate issued by the AMF in a sector other than financial planning.

Such is the case for an executive officer or employee of a firm registered for a sector other than financial planning but who acts in the field of financial planning for the firm.


FFII RR MM SS

1) Registration Sec. 72 An authorized foreign bank listed in Schedule I, II or III to the Bank Act may register as a firm.


2) Annual fees Sec. 81 For as long as it is registered, a firm must pay the annual fees prescribed by regulation to the AMF.


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RREE SS OO LL UU TT II OO NN OO FF CC OO MM PP LL AA II NN TT SS

1) Complaints filed with the AMF or a syndic

Sec. 186.1; Sec. 336

When a complaint is filed with the AMF against a certificate holder, the AMF advises the firm or the independent partnership to which the certificate holder is attached of the filing of the complaint and its nature. The AMF also advises the certificate holder.

If a syndic receives a complaint, it immediately advises the AMF of the filing and nature of the complaint. The AMF then advises the firm or the independent partnership to which the certificate holder is attached of the filing of the complaint and its nature.

The syndic also advises another syndic having jurisdiction in respect of the certificate holder as well as the certificate holder against whom the complaint is directed.


2) Complaint resolution policy Sec. 103; Sec. 494.1

A firm, independent representative or independent partnership must provide equitable resolution of complaints filed with it or him.

It or he must establish a policy concerning:

• the examination of complaints and claims filed by persons having an interest in a product or service it or he has distributed;

• the resolution of disputes pertaining to a product or service it or he has distributed.

The government may, by regulation, determine the policy or elements of such policy concerning complaints.


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3) Annual report regarding

complaints received Sec. 103.1 A report regarding the policy for resolving complaints must be submitted annually to the AMF

within two months after the closing date of the fiscal year of the firm, independent representative or independent partnership, or on any other date determined by the AMF. The report shall mention, in particular, the number and nature of the complaints filed.


4) Examination of complaints by the AMF or by any other body or legal person authorized by the government

Sec. 103.2; Sec. 189.1

The firm, independent representative or independent partnership must inform a complainant in writing that if he is dissatisfied with the complaint examination procedure or its outcome, he may request that a copy of the complaint file be forwarded to the AMF.

Where requested by a complainant, the firm shall forward a copy of the complaint file to the AMF. The AMF shall examine the complaint and may, when considered appropriate, act as a mediator if the interested parties agree.

The AMF may, with the authorization of the government, enter into an agreement with any body or legal person concerning the examination of complaints filed by persons dissatisfied with the examination procedure or its outcome.

Such an agreement may provide that the body or legal person may act as a mediator if the interested parties agree.


5) Communication of complaint file

Sec. 103.3 Notwithstanding sections 9 and 83 of the Act respecting access to documents held by public bodies and the protection of personal information (chapter A-2.1), the AMF may not communicate a complaint file without the authorization of the firm or independent representative that has transmitted it.


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6) Communication of and access

to a mediation record Sec. 103.4 A mediator may not be compelled to disclose anything revealed to or learned by him in the

exercise of his functions. As well he may not produce a document prepared or obtained in the course of such exercise before a court of justice or before a person or body of the administrative branch exercising adjudicative functions.

Furthermore, notwithstanding section 9 of the Act respecting access to documents held by public bodies and the protection of personal information (chapter A-2.1), no person may have access to a document contained in the mediation record.


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RREEGGUULLAATTIIOONN RREESSPPEECCTTIINNGG TTHHEE IISSSSUUAANNCCEE AANNDD RREENNEEWWAALL OOFF RREEPPRREESSEENNTTAATTIIVVEESS'' CCEERRTTIIFFIICCAATTEESS Following consultations conducted in January 2002 by the Bureau des services financiers, a number of regulatory amendments to the Regulation respecting the issuance and renewal of representatives' certificates were adopted.

In particular, these changes concern certain minimum training requirements governing the sectors of group insurance of persons, damage insurance and claims adjustment.

In addition, the Regulation respecting the issuance and renewal of representatives' certificates sets out new rules concerning the retaking of exams and removes the requirement of a secondary school diploma not only for those candidates who already have an attestation of collegial studies or a university-level certificate in damage insurance or claims adjustment but also for those who would like to be admitted to the Work-Study Learning Program.

As well, it allows a person to whom section 547 of An Act respecting the distribution of financial products and services (an employee to whom section 12 of the Act respecting market intermediaries) applies to obtain a certificate in damage insurance without having to fulfil the requirements regarding training, exams and the training period.

The Autorité des marchés financiers invites you to consult Table 2 so that you may better understand the import of the amendments made to the Regulation respecting the issuance and renewal of representatives' certificates. The coming into force of each amendment to the Act is also indicated.

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Table 2 Regulation respecting the issuance and renewal of representatives' certificates –

Regulation no. 1

Subjects Related section(s) Import of the amendments

MMII NN II MM UU MM TT RR AA II NN II NN GG RR EE QQ UU II RR EE MM EE NN TT II NN TT HH EE GG RR OO UU PP II NN SS UU RR AA NN CC EE OO FF PP EE RR SS OO NN SS SS EE CC TT OO RR

Sec. 14 The distinctions between requirements applying before and after November 1, 2003 have been eliminated.

Thus, since November 1, 2003, the recognition of experience no longer constitutes a way of entering into a career in the sector or sector class of group insurance of persons in the sector or sector classes of group insurance of persons.

Coming into force: May 1, 2003

MMII NN II MM UU MM TT RR AA II NN II NN GG RR EE QQ UU II RR EE MM EE NN TT II NN TT HH EE DD AA MM AA GG EE II NN SS UU RR AA NN CC EE AA NN DD CC LL AA II MM SS AA DD JJ UU SS TT MM EE NN TT SS EE CC TT OO RR SS

Sec. 15.1 (c), (d); Sec. 15. 2 (b), (c)

Since May 1, 2003, in the damage insurance and claims adjustment sectors, a secondary school diploma (or equivalent level of education — that is, 11 years of schooling) is no longer required of candidates having:

• an attestation of collegial studies in damage insurance or claims adjustment; or

• a university-level certificate in damage insurance or claims adjustment. Coming into force: May 1, 2003

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Table 2 Regulation respecting the issuance and renewal of representatives’ certificates – Regulation no. 1

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PPRR EE--RR EE QQ UU II SS II TT EE FF OO RR AA DD MM II SS SS II OO NN II NN TT OO TT HH EE WWOO RR KK--SSTT UU DD YY LLEE AA RR NN II NN GG PPRR OO GG RR AA MM –– WWSSLLPP

Sec. 15.3 Since May 1, 2003, a secondary school diploma (or level of education equivalent to a diploma of collegial studies — that is, 13 years of schooling) is no longer required for admission to the Work-Study Learning Program (WSLP).


EEXX EE MM PP TT II OO NN FF RR OO MM MM II NN II MM UU MM TT RR AA II NN II NN GG II NN OO NN EE OO FF TT HH EE SS EE CC TT OO RR SS OO RR SS EE CC TT OO RR CC LL AA SS SS EE SS OO FF DD AA MM AA GG EE II NN SS UU RR AA NN CC EE OO RR CC LL AA II MM SS AA DD JJ UU SS TT MM EE NN TT

Sec. 20.3; Sec. 20.4

A person to whom Sec. 547 of Bill 1882 applies is exempt from the minimum training set out in section 15 of Regulation no. 1.

This person has until December 31, 2004 to avail himself of this exemption.

Coming into force: July 1, 2003

EEXX EE MM PP TT II OO NN FFRR OO MM TT HH EE EE XX AA MM SS II NN OO NN EE OO FF TT HH EE SS EE CC TT OO RR SS OO RR SS EE CC TT OO RR CC LL AA SS SS EE SS OO FF DD AA MM AA GG EE II NN SS UU RR AA NN CC EE OO RR CC LL AA II MM SS AA DD JJ UU SS TT MM EE NN TT

Sec. 39.3; Sec. 39.4

A person to whom section 547 of Bill 1882 applies is exempt from the exams set out in sections 26, 27 and 28, or 29, 30 and 31, where applicable, of Regulation no. 1, according to the statement filed under section 94.3 or 94.4.



2 Persons employed by a market intermediary in damage insurance and entered on the lists of the Inspecteur général des institutions financières or the Conseil des assurances de

dommages as of June 12, 1998 are permitted to continue practising as previously.

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PPAA SS SS II NN GG EEXX AA MM SS

Sec. 43, Sec. 44; Sec. 45

Section 43 states that if the candidate fails an initial examination, he is entitled to sit for a supplemental examination within three months of the said examination.

Section 44 reduces from six months to three months the period of time before taking a supplemental exam.

Section 45 entitles a candidate who fails a third supplemental examination to sit for a fourth supplemental examination within three months of the said examination.

A candidate who fails the fourth supplemental examination must wait for a period of three years as of the date of the fourth supplemental examination before presenting a new application for registration for an initial examination.


EEXX EE MM PP TT II OO NN FF RR OO MM TT HH EE TT RR AA II NN II NN GG PP EE RR II OO DD II NN OO NN EE OO FF TT HH EE SS EE CC TT OO RR SS OO RR SS EE CC TT OO RR CC LL AA SS SS EE SS OO FF DD AA MM AA GG EE II NN SS UU RR AA NN CC EE OO RR CC LL AA II MM SS AA DD JJ UU SS TT MM EE NN TT

Sec. 74.1 A person to whom section 547 of Bill 1882 applies is exempt from the training period.



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OOTT HH EE RR CC OO NN DD II TT II OO NN SS GG OO VV EE RR NN II NN GG TT HH EE II SS SS UU AA NN CC EE OO FF RR EE PP RR EE SS EE NN TT AA TT II VV EE SS CC EE RR TT II FF II CC AA TT EE SS II NN OO NN EE OO FF TT HH EE SS EE CC TT OO RR SS OO RR SS EE CC TT OO RR CC LL AA SS SS EE SS OO FF DD AA MM AA GG EE II NN SS UU RR AA NN CC EE

Sec. 94.3 A person to whom section 547 of Bill 1881 applies must, in order to obtain a representative’s certificate, respect the following conditions:

• produce a signed statement attesting that he is now practising or has practised during the last 12 months in the sector classes of personal-lines or commercial-lines damage insurance, or in both;

• declare that he expressly and definitively waives his right acquired under section 547 of the Act;

• file a signed statement from the firm on whose behalf he is now working or has worked, attesting that he is now practicing or has practiced during the last 12 months in the sector classes of personal-lines or commercial-lines damage insurance, or in both.


OOTT HH EE RR CC OO NN DD II TT II OO NN SS GG OO VV EE RR NN II NN GG TT HH EE II SS SS UU AA NN CC EE OO FF RR EE PP RR EE SS EE NN TT AA TT II VV EE SS ’’ CC EE RR TT II FF II CC AA TT EE SS II NN OO NN EE OO FF TT HH EE SS EE CC TT OO RR SS OO RR SS EE CC TT OO RR CC LL AA SS SS EE SS OO FF CC LL AA II MM SS AA DD JJ UU SS TT MM EE NN TT

Sec. 94.4 A person to whom section 547 of Bill 1881 applies must, in order to obtain a representative’s certificate, respect the following conditions:

• produce a signed statement attesting that he is now settling or has settled claims in the sector classes of personal-lines or commercial-lines damage insurance, or in both;

• declare that he expressly and definitively waives his right acquired under section 547 of the Act;

• file a signed statement from the firm on whose behalf he is now working or has worked, attesting that he is now settling or has settled claims in the sector classes of personal-lines or commercial-lines damage insurance, or in both.


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RREEGGUULLAATT IIOONN RREESSPPEECCTT IINNGG CCEERRTTAAIINN NNOOTTIICCEESS TTOO BBEE RREEMMIITTTTEEDD TTOO CCOONNSSUUMM EERRSS Following consultations conducted in January 2002 by the Bureau des services financiers, a number of amendments to the Regulation respecting issuance and renewal of representatives’ certificates were adopted.

First of all, the title of this regulation has been changed to Regulation respecting information to be provided to consumers.

The amendments made to this regulation bring into force sections 17 and 31 of An Act respecting the distribution of financial products and services.

Newly added sections 4.1 through 4.4 set out the rules concerning the disclosure of fees to the consumer. Sections 4.5 through 4.7 state the requirements relating to the disclosure of information on insurers.

The Autorité des marches financiers invites you to consult Table 3 so that you may better understand the import of the amendments made to the Regulation respecting information to be provided to consumers. The coming into force of each amendment to the Act is also indicated.

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Table 3 Regulation respecting information to be provided to consumers – Regulation no. 3

Subjects Related

section(s) Import of amendments DDII SS CC LL OO SS UU RR EE OO FF FF EE EE SS TT OO CC OO NN SS UU MM EE RR SS

1) Scope

Sec. 4.1 The rules concerning disclosure apply only to a representative contemplated by section 1 of Bill 188, with the exception of a securities representative (see section 17, Bill 188).

Coming into force: March 21, 2003

2) Manner of disclosure Sec. 4.2 The disclosure by a representative who claims fees must be given in writing before or at the time services are rendered, and must indicate:

• the fees claimed;

• the fact that he receives any other type of remuneration, including a commission or any other benefit to which he is entitled with respect to the products that he sells or the services he renders;

• the name of the person with whom the commission is split, where applicable.


Sec. 4.3 A representative must disclose to the client any change in his method of remuneration in the first written communication following the date on which the said change took effect.


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Table 3 Regulation respecting information to be provided to consumers – Regulation no. 3

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Sec. 4.4 Notwithstanding section 4.2, a damage insurance representative may disclose, after his services have been rendered, the fact that he receives, in addition to fees, any other type of remuneration by way of a statement on the invoice, provided that:

• the fees are claimed by an agent, a damage insurance broker, a firm or an independent partnership on whose behalf he is acting;

• the fees claimed are only to recover administrative fees of up to $50 for the personal-lines damage insurance sector class and $250 for the commercial-lines damage insurance sector class;

• the administrative fees were declared at the time the contract was entered into; • the administrative fees are listed separately on the invoice.


DDII SS CC LL OO SS UU RR EE OO FF II NN FF OO RR MM AA TT II OO NN OO NN II NN SS UU RR EE RR SS

1) Scope Sec. 4.5 The rules concerning disclosure apply only to (see section 31 of Bill 188): • a representative in insurance of persons;

• a representative in group insurance of persons;

• a damage insurance broker. Coming into force: March 21, 2003

2) Manner of disclosure Sec. 4.6; Sec. 4.7 The representative must disclose, verbally or in writing, upon request by the person with whom he is transacting business, the following elements:

• the name of insurers whose products a representative is authorized to offer;

• the number of insurers whose products he is authorized to offer to this person. Coming into force: March 21, 2003

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