Bill 92: New financial omnibus bill modernizes regulatory framework applicable to insurance, securities, financial institutions and real estate brokerage in Quebec

Insurance sector

Creation of the Chambre de l’assurance

The significant changes proposed by Bill 92 include provisions aimed at amalgamating the Chambre de la sécurité financière (self-regulatory organization overseeing certain finance and insurance advisors and representatives) and the Chambre de l'assurance de dommages (organization overseeing damage insurance agents and brokers as well as claims adjusters) to form a new entity, the Chambre de l'assurance, which would replace the merged chambers in all ongoing judicial or administrative proceedings to which they are parties.

However, it is anticipated that mutual fund dealer representatives and scholarship plan dealer representatives will be excluded from the jurisdiction of the new Chambre de l’assurance (Insurance Chamber). In this context, it will be interesting to see if the powers governing mutual fund dealer representatives will be transferred to the Canadian Investment Regulatory Organization.

Expanded accessibility to the role of claims adjuster

Bill 92 also stipulates that the Autorité des marchés financiers (AMF, Quebec’s financial markets regulator) could, in certain circumstances, authorize individuals to act as claims adjusters even if they do not hold a certificate to this effect. This authorization could extend to damage insurance agents and brokers, to individuals who have already held such a certificate, as well as to claims adjusters registered outside of Quebec.

This measure seems to be inspired by the temporary easing measure introduced by the AMF in August 2024, following the torrential rains that led to an exceptional volume of claims. As a reminder, the AMF had then allowed firms and independent companies registered in the field of claims adjustment to use non-certified persons to carry out certain activities normally reserved for claims adjusters, in order to respond quickly to demand. 

This is therefore an additional measure proposed by the legislator to remedy the shortage of resources in an industry subject to increasing pressure, particularly in the context of major disasters.

Other measures applicable to the insurance sector

Among the other notable legislative changes in the insurance sector, Bill 92 proposes to introduce an exception to the current obligation imposed on Quebec insurers to maintain a majority of directors residing in Quebec. This exception would apply to insurance companies that belong to a financial group and collecting more than 40% of their premiums outside Quebec. In such a case, the minimum number of directors residing in Quebec could be lowered to one-third, provided that the majority of the company's directors still reside in Canada. In our view, this measure provides increased flexibility to Quebec insurance companies while promoting broader geographic representation in corporate governance.

Bill 92 also amends the Act respecting the distribution of financial products and services to broaden the AMF’s regulatory powers over firms, independent partnerships and independent representatives. More specifically, the proposed amendments provide that the AMF will now be able to adopt by-law management rules that the latter must observe, particularly for governance. It will be interesting to see whether this additional power will lead to a more robust regulatory framework applicable to brokers and managing general agents, particularly in the context of industry consolidation in recent years. 

Finally, Bill 92 proposes to reduce the minimum number of mutual companies required to form or maintain a federation of mutual companies from nine to five. In addition, under certain conditions, a legal person constituted outside Quebec and authorized to carry on insurance activities could be admitted as a member of a federation of mutual companies as an auxiliary company. These changes appear to be part of a general trend towards consolidation in the damage insurance industry in Quebec and beyond its borders, aimed, among other things, at responding to the increased frequency of major climatic events and the explosion in technology-related costs.