Power of attorney required when an insured can no longer manage his or her file
Q. An insured’s son calls me to update his mother’s home insurance policy. She was recently hospitalized and is temporarily unable to manage her insurance. What should I do?
A. The agent or broker must obtain the named insured’s consent before making any changes. If an individual can no longer manage their own file, they must mandate a third party to do so and notify you of this. If the insured mentioned above is unable to provide a written power of attorney proving that she has designated her son to take care of her file, she must give her consent verbally.
You must never let a third party interfere with your client’s file,, be it a father shopping around for car insurance for his child, or a lender meddling in a homeowner’s insurance application, or a granddaughter trying to help her grandfather with his claim.
Furthermore, be careful to differentiate between insureds who are covered by the contract—occasional drivers or individuals living under the same roof—and insureds who are named in the declarations page and empowered to request changes: only the latter may give you information and instructions.
The insured (or insureds, where applicable) who is the actual policyholder must send you written authorization (or verbal, as a last resort) confirming that someone has been mandated to act on their behalf.
You must always take precautions to protect the interests of the insured named in the contract. For instance, if the insured’s son wants to pay for his temporarily hospitalized mother’s insurance, this decision will obviously not harm the insured. On the contrary, its intent is to ensure the contract’s conditions remain in force. However, if the son asks you to decrease or change any coverage in his mother’s contract, it is essential that you obtain her consent, failing which, you must refuse his request since this action could potentially harm the insured.
Is the insured unable to give consent? Make a note of the third party’s request in the client’s file, notify the insurer of the situation, and tell the person that upon receiving a power of attorney, you will be able to proceed with their request. Ensure this person understands the consequences of the changes requested, as well as your obligation to obtain the consent of the insured named in the contract.
If you have already obtained a power of attorney, but the insured is now permanently unable to take care of their own file—for example: coma, loss of cognitive faculties—you must obtain a duly approved “mandate in case of incapacity.”
In the event of death, the agent or broker must receive a notification with supporting evidence (death certificate) in order to have the insurance transferred to the estate;, the representative must then explain to the heirs their obligations with respect to the insurance contract.
Lastly, do not forget to record the instructions you received in the client’s file.
 Section 37(3) of the Code of ethics of damage insurance representatives.
 Article 2476 of the Civil Code of Québec: “Upon the death or bankruptcy of the insured or the assignment of his interest in the insurance to a co-insured, the insurance continues in favour of the heir, trustee in bankruptcy or remaining insured, subject to his performing the obligations to which the insured was bound.”