On March 27, 2009, following two extensive consultations
conducted by the Autorité des marchés
financiers (the AMF, Quebec's financial
sector regulator), with respect to motor vehicle replacement
guarantees, the AMF published Avis de l'Autorité des
marchés financiers relatif aux garanties de remplacement
automobiles (the Notice), which provided its
views on the nature of these guarantees and how they will be
regulated in Quebec. A replacement guarantee generally provides
coverage for the replacement of a vehicle in the case of a total
loss, coverage of the deductible in the case of a partial loss and
the use of a replacement vehicle. The consultation process was
undertaken to consider the various insurance-like products, such as
replacement guarantees, routinely offered by automobile dealers to
their customers and whether an insurer's licence is required to
offer such products.
According to the Notice, in the opinion of the AMF a motor vehicle
replacement guarantee is an insurance product subject to AMF
oversight. Therefore, such guarantees must be issued by insurers in
a standard form that has been approved by the AMF. The AMF has not
yet decided, however, how the distribution of the replacement
guarantees will be regulated. Further, while no definition of
"motor vehicle replacement guarantee" was provided in the
Notice, the AMF indicated that it considers the main difference
between a true "guarantee" and an insurance product to be
a guarantee protects the consumer against manufacturing defects
in, and poor performance of, the product purchased and is generally
offered by the manufacturer;
an insurance protect protects the consumer against a variety of
risks (e.g. collision, theft, vandalism, etc.).
According to the Notice, the AMF has taken this position with
respect to motor vehicle replacement guarantees
only and not other types of guarantees.
Insurance products may currently be distributed in Quebec either
through licensed insurances brokers and agents or through the
"distributor" channel permitted under An Act
respecting the distribution of financial products and services
(Quebec) (the Financial Products Act). Only
insurance products listed in the Financial Products Act or
those that have been the subject of a special government order are
permitted to be sold by "distributors". A distributor is
a person who offers or arranges for insurance as an accessory to
goods he or she sells. The Financial Products Act sets out
the obligations of the distributor and the insurer when the
"distributor" channel is used.
The AMF has delayed full implementation of its new policy for 12
months. During this time, it will work with stakeholders to assist
them in making the required changes to ensure compliance with the
Financial Products Act and consult with them in order to
determine the best way to regulate distribution of the guarantees.
All replacement guarantees sold during this 12-month period must be
honoured until their expiration date.
In order to benefit from the 12-month moratorium, manufacturers
and administrators of replacement guarantees must register with the
AMF within three months of publication of the Notice, (or before
June 27, 2009). The Notice implies that the manufacturers or
administrators of replacement guarantees may be subject to sanction
if they do not register.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Under B.C.'s former and current Limitation Act, the limitation period for a Plaintiff's claim can be extended on the basis of a Defendant having acknowledged in writing some liability for the cause of action.
Automobile drivers, like fine wine, tend to get better with age. Older drivers can draw on a wealth of experience from their years on the road to assist them when faced by a variety of dangerous conditions.
The insurance industry will be interested in Ledcor Construction Ltd v. Northbridge Indemnity Insurance Co because of principles the Supreme Court of Canada applied to the "faulty workmanship" exclusion in a Builders' Risk policy.
For the first time in BC, a Court has decided that an insured is entitled to special costs, rather than the lower tariff costs, solely because they were successful in a coverage action against their insurer.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).