Over the past few months, there have been a number of regulatory developments in Québec which will have an important impact on the insurance sector. These include: (i) clarifications on how new French language requirements introduced by Bill 96 apply to insurance contracts; (ii) changes to insurance adjuster licensing rules; (iii) restrictions on the ability of automobile dealers to sell replacement insurance; (iv) a public consultation on modernizing the rules governing licensing and probationary periods under the Act respecting the distribution of financial products and services (“ADFPS”); and (v) the introduction of standardized complaint processing and dispute resolution mechanisms for entities operating in the financial sector. In this blog post, we provide a high-level overview of these changes.

i.          French Language Requirements for Insurance Contracts

The government of Québec has clarified certain ambiguities relating to the adhesion contract rules introduced by Bill 96, An Act respecting French, the official and common language of Québec. “Adhesion” contracts are contracts where the principal clauses were drafted by one party (the “Business”) and the other party (the “Adhering Party”) was not afforded an opportunity to negotiate those clauses. Pursuant to Section 55 of the Charter of the French Language as amended by Bill 96, an Adhering Party may only choose to sign an adhesion contract in English if the Business has first remitted (provided) the French version to the Adhering Party. If the parties then choose to enter into the contract exclusively in English, the related documents may also be exclusively in English.

The Regulation to amend mainly the Regulation respecting the language of commerce and business (the “Regulation”) clarifies that a document related to a contract of adhesion includes a document:

1. Attesting to the existence of the contract, such as an insurance certificate;
2. Whose attachment is required by law, such as a resiliation or resolution form;
3. That otherwise constitutes an ancillary document.

The Regulation also clarifies how the adhesion contract rules apply to contracts made over the telephone or online. For contracts of adhesion entered into online, the requirement to provide a French version of the contract is met by providing the Adhering Party with the applicable standard clauses in French.

For contracts of adhesion entered into by telephone, the requirement to provide a French version of the contract is met if the Adhering Party has stated their express wish to enter into the contract in English, provided that the Adhering Party was explicitly invited to consult the applicable standard clauses in French electronically. In cases where the Adhering Party does not have the technological means to access the applicable standard clauses and the contract will take effect immediately, the requirement to issue a French version of the contract is met by the Adhering Party stating their express wish to enter into the contract in English.

In either case, if the Adhering Party notes discrepancies between the French-language contract and the version in another language they were given or subsequently consulted, the Adhering Party may invoke either version, according to their interests.

These changes came into force on July 11, 2024.

ii.         Changes to Insurance Adjuster Licensing

Among other things, Bill 30, An Act to amend various provisions mainly with respect to the financial sector amends the ADFPS to address the chronic shortage of claims adjusters resulting notably from the increasingly frequent occurrence of extreme weather events.

More specifically, the Bill makes the following two amendments:

1. Claims adjusters are no longer required to be exclusively certified in the claims adjustment sector. This will allow, for example, damage insurance agents to also obtain licenses to act as claims adjusters and ease the industry shortage.
2. Persons who are not claims adjusters may handle claims arising either from an automobile claim provided for by the direct compensation agreement referred to in the Automobile Insurance Act or from a glass breakage, or for the settlement of a claim not exceeding $5,000, so long as they do so solely through electronic means and carry out their functions under the supervision of a certified claims adjuster. Such persons must inform the claimant of the fact that they are acting under the supervision of a claims adjuster, the identity of that claims adjuster and, at the claimant’s request, refer the claimant’s file to that claims adjuster.

These changes came into force on May 9, 2024.

iii.        Changes to the Sale of Insurance Products by Automobile Dealers

Bill 30 also amends the ADFPS provisions relating to the insurance products that can be distributed other than through a licensed representative. Automobile dealers are currently permitted to offer replacement insurance as an accessory purchase and on behalf of an insurer, but this will soon change. As of July 1, 2026, automobile vehicle dealers will no longer be authorized to distribute replacement insurance products; only certified damage insurance representatives will be permitted to be offer and sell these products.

iv.        Public Consultation on a Draft Regulation to Amend Licensing Requirements and Probationary Periods 

The Québec financial services regulator, the Autorité des marchés financiers (the “AMF“), is currently undertaking a public consultation on a draft regulation to amend the Regulation respecting the issuance and renewal of representatives’ certificates (the “Draft Regulation”). The Draft Regulation aims to modernize the rules governing probationary periods for candidates in sectors governed by the ADFPS and to offer greater flexibility to both trainees and the industry by, among other things, facilitating the recruitment process, reducing the administrative burden associated with the internship period, and improving learning during the internship period by emphasizing value-added activities.

Interested parties with comments regarding these regulatory amendments are invited to submit them in writing to the AMF no later than September 10, 2024.

v.         Complaint Processing and Dispute Resolution in the Financial Sector

Financial institutions, financial intermediaries and credit assessment agents operating in Québec (“Entities”) will be required as of July 1, 2025 to implement standardized complaint processing and dispute resolution mechanisms that satisfy the detailed requirements set out in the newly adopted Regulation respecting complaint processing and dispute resolution in the financial sector (the “Regulation”). The purpose of the Regulation is to ensure the fair processing of consumer complaints in the financial sector. To this end, the Regulation requires Entities to establish a comprehensive complaint processing and dispute resolution policy and make it easily publicly available. Entities must also adhere to strict standardized requirements for: (i) providing clear communication, proactive assistance and timely responses to complainants and (ii) thoroughly documenting complaints and the process taken to respond to them.

Non-compliance with the Regulation may result in penalties ranging from $1,000 to $5,000.

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