Regulatory Alerts2021-07-19
Notice relating to the cancellation of damage insurance contracts and the use of the short-term rate in computing the refund of insurance premium overpayments
The Autorité des marchés financiers (AMF) clarifies that statutory cancellation rules apply universally to all damage insurance contracts, not exclusively to the QPF 5 form. Insurers must refund unearned premiums by applying the short-term rate when the insured cancels coverage, as mandated by the Civil Code of Québec. The regulator establishes a maximum short-term rate of 10 percent of the unearned premium as reasonable and industry-standard.
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