Consultants have to register with the AMF?Consultants have to register with the AMF? consultants et conseillers doivent s'inscrire auprès de l'autorité

This summary does not constitute a legal opinion. The information it contains may not reflect the current state of the law.

By Me Jean Rivard, LL.L., CIP, Chambre de l’assurance de dommages

Three charges of illegal practice were filed with the Penal Division of the Court of Quebec1  against 9111-3258 Québec Inc., operating under the name Claude Descheneaux, Consultant (respondent), for having carried on business as a damage insurance firm without being registered with the Autorité des marchés financiers (the Authority).

The case before the court was strictly confined to analyzing the scope of section 62  of the Act respecting the distribution of financial products and services (ARDFPS) with respect to the “role of an independent risk management advisor who does not sell insurance products,” while the matter in dispute was limited to whether or not “an independent risk management advisor is subject to the ARDFPS and must hold a certificate issued by the Authority.”


The Facts of the Case

The respondent had previously held a damage insurance broker certificate. After leaving his position as a broker, he became an “independent risk management consultant” and joined a “firm of insurance advisors who do not sell insurance.” “In order to ensure transparency and independence in the eyes of its clients,” the firm required that its members, including the respondent, “[give up their] title of insurance broker.” Mr. Descheneaux also became a member of the Association des conseillers indépendants en gestion des risques de la province de Québec [the Association of Independent Risk Management Advisors of the Province of Quebec].

For a flat fee, the consultant offered his clients a range of service agreements that provided such services as: a needs analysis; a verification of policies currently in force; information updating; negotiating the risk with brokers or with other brokers or insurers after preparing the necessary specifications; and help with renewals and technical assistance in the event of a loss without, however, doing the actual claims adjustment.

In 2012, the respondent returned to work in an insurance firm, once again in possession of a commercial lines damage insurance broker certificate issued by the Authority.


Analysis and Ruling

To begin, the Court stated that “neither the professional competence of independent risk management advisors nor, specifically, the competence of Mr. Descheneaux, is under debate here” and that “the only issue concerns analyzing the scope of section 6 of the ARDFPS,” in other words, “does someone who offers an insurance product also have to be able to sell it?”

No one challenged the fact that the ARDFPS is a public policy statute, which is designed to protect the public and which imposes “duties and obligations” on those who offer damage insurance products. Hence, the Court was of the opinion that the provisions of the Act “must be interpreted as broadly as possible to guarantee” consumer protection for “[both] individuals and corporations”. Furthermore, the Act respecting the Autorité des marchés financiers (ARAMF) grants the Authority “the power to oversee and control,” in keeping with its role as a “custodian who ensures the protection of the public in matters related to the pursuit of activities governed by the ARDFPS.”

Based on this reasoning, and after having analyzed a wide variety of interpretive tools3 , the Court came to the conclusion that in choosing the verb “to offer” in section 6 of the ARDFPS, the legislator’s intent was to “supervise the greatest number of activities related to insurance products” and not only the sale of the product, in which case it could have simply used the “expression someone who SELLS rather than someone who OFFERS.” The Court also mentioned that by taking into account the additional word (“offers”) and specifying that the broker “also [acts] as an advisor,” the legislator’s intent was “not only to supervise and regulate brokers’ activities […], but also that (sic) of insurance advisors.”

Furthermore, the court specified that the legislator’s intent “is not to abolish” independent advisors as a class of professionals; “on the contrary, the Authority requires that these individuals join its ranks and become members in good standing” and that “this supervision is the best way to verify that they maintain their level of competence and respect their duties and obligations”.


A Warning to All Damage Insurance Representatives  

It is important to note that the court raised questions about the practice of brokers or agents who agree to deal with non-certified intermediaries “without directly speaking to [their] client,” in contravention of section 27 of the ARDFPS, which requires the insurance representative to “personally gather the information that is necessary to assess a client’s needs.”


A History of Protecting the Public

In 2005, the ChAD created a working group made up of members of the industry that was mandated to make recommendations. Essentially, the recommendations proposed that non-certified consultants working in the damage insurance industry be required to obtain a certificate from the Authority.

Even at the time, this was not a new issue. Indeed, in 1993, the now defunct Association des courtiers d’assurance de la province de Québec was pressuring government authorities to amend the Act respecting market intermediaries (replaced in 1998 by the ARDFPS) to ensure that consultants would be subject to the same regulations as market intermediaries.

The ChAD—which tabled a report on this issue with the Authority in 2006—is pleased to see that the question has been settled in a manner that protects the public.


1. L’Autorité des marchés financiers v. 9111-3258 Québec Inc., 2013 QCCQ 13994.


3 Dictionaries, the Interpretation Act, debates on parliamentary proceedings, debates of the Committee on Public Finance, as well as the history of the ARDFPS and the ARAMF.

8/13/2014 7:34:11 PM