Regulatory Alerts2012-06-07
Notice Regarding Q.P.F. No. 5 – Replacement Insurance for Damaged Automobiles
The Autorité des marchés financiers requires Québec automobile insurers and distributors to correct a pricing practice in replacement insurance contracts that incorrectly includes outstanding debt balances within the stated purchase price. This adjustment aligns the declared vehicle value with the actual dealer charge, preserving the compensatory nature of damage insurance while preventing premium inflation and potential fraud. Insurers must verify contract pricing before issuing policies and ensure their distributors adequately understand the product under applicable financial statutes.
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