15 January 2018 13:30
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There are no brokers in damage insurance who are called to live the deep transformations following the introduction of bill 150. The representatives certified in group insurance are also covered.
A provision in the bill 150 could make obsolete the requirement to hold a licence to distribute group insurance in Quebec, has learned of the insurance Journal.
In a newsletter distributed to its customers in November, and of which the of the insurance Journal has obtained a copy, Lavery Counsel indicates that the bill 150 would ensure that the » accession to a group insurance contract would not be an act reserved to the representative in insurance of persons. «By this very fact,» the group insurance contracts may now be available directly «, say the lawyers Evelyne Verrier and Jean-Philippe Joyal, in this bulletin.
Article 238 of the draft act 150 changes everything
This is what they learned from the article 238 of the bill 150, which modifies article 3 of the Act respecting the distribution of financial products and services (distribution ACT).
Article 238 of the bill 150 reads as follows :
Section 3 of the Act respecting the distribution of financial products and services
(chapter D-9.2) is amended to read :
1) by deleting, in the second paragraph, «and is entitled to join any person to a collective contract of insurance or annuity» ;
(2) by deleting, in the third subparagraph of paragraph 1 °.
Article 3 of the ACT largely amputated
With regard to article 3 of the Act respecting the distribution of financial products and services, it specifies that a representative in insurance of persons » acts as an advisor in individual insurance of persons and is authorized to join any person to a contract of group insurance or of annuity «. The bill 150 would eliminate the part on membership in a group contract of insurance and annuities.
The bill 150 amputerait another part of the article 3 of the ACT. Currently, it states that «whoever, for the account of an employer, a union, a professional order or an association or professional syndicate constituted under the Act on trade unions (chapter S -40), made to adhere to the contract collective insurance of persons or group annuities an employee of that employer or a member of such trade union, the professional order or an association or professional syndicate» cannot appear as a representative in insurance of persons. If this passage disappears, the lawyers at Lavery argue that these people may appear as a representative in insurance of persons.
The door wide open to non-certified
The bill 150 ensures that an insurer in a collective can form and request an individual, non-certified, to distribute its product. This same bill, however, ensure that the responsibility of this distribution would be up to the insurers, which many people concerned, according to what was stated by Ms. Verrier in Journal of the insurance.
«This is a major reform of the supply and distribution without a representative. The insurer will be liable for the acts of the natural person who distributes the proceeds to him. It raises concerns «, she said.
It comes in this way to strengthen the article 65 of the draft of act 141, which reads as follows : «The insurer is authorized is responsible for the acts for the purchase of an insurance contract, or the accession to it posed by the distributors or persons to whom the latter entrusted the task of dealing with customers or members. «
In addition, article 135 of the draft law 150 (see wording below), combined with certain provisions of bill 141, even goes so far as to eliminate the concept of selling without a representative in group insurance, either life insurance or damage insurance, » says Lavery in his newsletter. The concept of selling without the representative would then be reserved for individual insurance. Bill 141 was already moving to the door the guide of distribution without a representative.
No liability to the lessee ; the insurer inherits
The other hand, she says to hear that agencies of protection of consumers deem the measure to be insufficient, since the lessee will have no further responsibilities. «The insurer will absorb 100 % of the responsibility in this case, because the taker will not have to do it. Some would have liked a wider application in the case of a direct offer to the public «, said Mrs. Verrier.
It stresses, however, that this provision targets the financial institutions described in article 1.5 of the Law on insurance. It reads as follows : «A federation and mutual insurance companies which are members of the guarantee fund of which they are members, as well as any other legal person or company controlled by one or more of these mutual insurance companies, or the federation constitute a group. «
«Previously, the insurer could say that he had handed over all documentation to the distributor. It was a case-by-case basis. This will not be the case in the event the adoption of bill 150. The insurer may be liable to a fault of the distributor, even if it was well formed and that the product has been well distributed, » said Mrs. Verrier.
The associated Lavery believes that it will be necessary to clarify what will be the framework of this distribution if the bill 150 is going forward. «If a consumer has a complaint against a dealer, is what he will speak directly to the insurer ? Probably he will send the complaint to all parties involved. However, it is the insurer who will have to disentangle all this, » said Mrs. Verrier.
The current wording of article 3 of the ACT (the underlined called to disappear)
The representative in insurance of persons is the natural person who directly offers to the public, a firm, an independent representative or an independent partnership of individual insurance products by persons or individual annuities from one or more insurers.
It acts as an advisor in individual insurance of persons and is authorized to join any person to a collective contract of insurance or annuity.
Are not representatives in insurance of persons :
1 ° one who, for the account of an employer, a union, a professional order or an association or professional syndicate constituted under the Act on trade unions (chapter S‐40), made to adhere to the contract collective insurance of persons or group annuities an employee of that employer or a member of such trade union, the professional order or an association or professional syndicate ;
2 ° the member of a mutual benefit society, not guaranteeing the payment of a benefit in the event of the occurrence of a risk, that instead of the fonts for it.
Article 235 of the bill 150
235. The insurance Act (chapter A-32) is amended by inserting after section 222.2, the following :
«222,3. An insurer that enters into a contract of group insurance shall remit to the lessee, in addition to the certificates of insurance referred to in article 2401 of the civil Code, a document intended for the members so that they are informed in a timely manner of information necessary to informed decision-making and the execution of the contract.
Such information shall include :
1 ° the scope of the warranty is considered, and what are the exclusions ;
2 ° time limits, in accordance with the civil Code, within which a claim must be reported as well as those in the interior of which the insurer is liable to pay the insured sum or the indemnity provided ;
3 ° the information necessary to the formulation of a complaint to the insurer under section 285.29.
“222,4. The insurer who enters into a group insurance contract with a lessee who, as the case may be, is affiliated with or is part of the group is required to ensure that he furnish the document referred to in the first paragraph of section 222.3 to the members.
Such an insurer is liable for the acts regarding accession to a group insurance contract placed by the customer or for the account of it. For the purposes of this article, ‘group’ has the meaning given to it by section 1.5 of this act and article 3 of the Law on financial services cooperatives (chapter C-67.3). «.