An insurer mandated a company offering call center services to cold call its clients and offer them some of its insurance products. The telemarketing firm used employees who were certified representatives registered as independent representatives with the Autorité des marchés financiers (the Authority).

The sales process began with a non-certified telemarketer contacting the insurer’s clients to offer them an insurance product. The telemarketer’s job was to describe the product and the various coverages available using a text provided by the insurer. When the client expressed interest, the telemarketer would then take the client’s personal information, inform him of the premium for the selected coverage, and transfer the call to a certified representative to finalize the sale.

At that point, the representative’s mandate was to verify the information obtained, and then list the exclusions provided for in the contract—again reading from a text prepared by the insurer—before closing the sale. 

The representatives’ reliance on a script prepared by the insurer also breached their duty to advise. The FMAT found that they failed to fulfill their responsibilities in this regard, particularly by:

• “Not inquiring into their clients’ situations to identify their insurance needs;
• Not advising them properly and not offering them a product that suits their needs only when it was possible to do so; and
• Not telling their customers about specific coverage exclusions based on their needs.”⁶

The professional’s duty to advise is crucial and is necessary to protecting the public. At all times—even when the original cold call, made by a non-certified individual, is transferred to a professional–“[professionals must] inquire into their clients’ situation to assess their needs. They must ensure to appropriately advise their clients regarding matters that fall within the sectors in which they are authorized to act; if they can, they shall offer their clients a product that meets their needs.”⁷

Then, if the client decides to purchase the contract, but before closing the sale, the certified representative must “describe the proposed product to the client in relation to the needs identified and specify the nature of the coverage offered. Insurance representatives must also indicate clearly to the client any particular exclusion of coverage, if any, having regard to the needs identified and provide the client with the required explanations regarding such exclusions.” ⁸

However, representatives who simply read a text prepared by the insurer or who carry out instructions that go against their legal and ethical obligations are violating their professional independence. On more than one occasion, the courts have reiterated this principle—one which is fundamental to the practice of certified individuals:

“ As a professional, the respondent had ethical obligations that went beyond any instructions her employer may have given her. We must remember that a damage insurance broker [certified representative] must always safeguard his professional independence and respect the letter and the spirit of his code of ethics, which is of public order. ”⁹

^{[1] Autorité des marchés financiers v. Coulibaly  (decision no. 2020-004-005), Autorité des marchés financiers v. Yuen (decision no 2020-004-001), Autorité des marchés financiers v. Cherif-Ouazani (decision no 2020-004-002) and Autorité des marchés financiers v. Hema (decision no 2020-004-004).}

^{[2]This decision concerns representatives who distribute personal insurance products. However, it also applies to representatives distributing damage insurance products who commit comparable breaches to their obligations.}

^{[3] Autorité des marchés financiers v. Coulibaly (decision no 2020-004-005).}

^{[4] Chauvin c. Beaucage, 2008 QCCA 922.[unofficial translation]}

^{[5] Id.}

^{[6] Autorité des marchés financiers c. Coulibaly, Decision No.2020-004-005. [unofficial translation]}

^{[7] Section 27 of the Act respecting the distribution of financial products and services.}

^{[8] Section 28 of the Act respecting the distribution of financial products and services.}

^{[9] Chambre de l’assurance de dommages c. Légaré, 2010-04-02(B).[unofficial translation]}

^{[10] Section 10 of the Regulation respecting the pursuit of activities as a representative.}

^{[11] Section 12 of the Regulation respecting the pursuit of activities as a representative.}

^{[12] Section 14 of the Act respecting the distribution of financial products and services.}

^{[13] Section 12 of the Act respecting the distribution of financial products and services.}

^{[14] Section 115 of the Act respecting the distribution of financial products and services.}

^{[15] Section 115.1 of the Act respecting the distribution of financial products and services.}

^{[16] Autorité des marchés financiers v. Coulibaly, Decision no..2020-004-005.[unofficial translation]}