AMF Notice on Cancellation of Damage Insurance Contracts and Short-Term Rate for Premium Overpayment Refunds

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 This notice amends certain positions previously set out in notices published in the following bulletins by the Autorité des marchés financiers (AMF) regarding the cancellation of damage insurance contracts:

• Bulletin dated July 23, 2010 (Vol. 7, No. 29)
• Bulletin dated October 1, 2010 (Vol. 7, No. 39)
• Bulletin dated July 15, 2021 (Vol. 18, No. 28)
  The AMF has conducted supervision across all damage insurers to analyze the application of the short￾term rate used in the cancellation tables of insurance contracts to compute the refund of insurance premium overpayments. As a reminder, the refund of the insurance premium following the cancellation of a damage insurance contract is governed by article 2479 of the Civil Code of Québec, which provides that the insurer is entitled to only the earned portion of the premium, computed at the short-term rate if the insurance is cancelled by the insured. From this perspective, the AMF expects insurers to meet their legal obligations to follow sound commercial practices and sound and prudent management practices by ensuring the reasonableness of short-term rate used in the cancellation tables of insurance contracts. Consequently, insurers will have to be able to demonstrate the reasonableness of the short-term rates used, in line with the objective of fair treatment of clients. Additional information:
  Additional information may be obtained from the AMF Information Centre at:
  Québec City: 418-525-0337
  Montréal: 514-395-0337
  Toll-free: 1-877-525-0337
  Fax: 418-647-9963 www.lautorite.qc.ca
  July 17, 2025