Legal Column > Insuring property outside Quebec: an issue of current concern

Insuring property outside Quebec: an issue of current concern

posted on 2:09 PM, June 18, 2018

Above and beyond its central lobbying role, the RCCAQ regularly deals with operational questions raised directly by its members. Some of these questions may be very time-specific, in line with current events, while others may be of a more recurring nature.

This month the goal is to shed fresh light on a number of issues surrounding decisions to insure property located outside Quebec but covered by a policy taken out and issued in Quebec. In that case, would the vendor agent or broker be required to hold a permit to sell insurance in the jurisdiction where the property is located?

In 2013, we put this question to André Bois of Tremblay Bois Mignault Lemay; he kindly provided a response geared towards RCCAQ members in an article in the June 2013 issue of Liaison magazine. At our request, Luc Jobin of the same firm reconsidered the matter and provided a few clarifications to Mr. Bois's original response.

Please note that for specific cases and questions, you are encouraged to contact a legal advisor. If you are an RCCAQ Insurance client, you can reach Assistenza International's no-fee legal services at (877) 347-5398.

We hope you enjoy the article!


Several years ago, CHAD's disciplinary committee handed down two decisions[1] involving Quebec firms operating in Ontario and Nova Scotia. Were they authorized to insure property located outside Quebec? According to CHAD, they were not: one of the two brokers involved was barred from practicing for three years while the other was assessed a fine.

Back in 2013, Mr. Bois considered the merits of these disciplinary decisions. Did they constitute jurisprudence in the matter? In his view, "the decisions had no precedent value for two reasons. For one thing, both brokers pleaded guilty. For another, they were not represented by legal counsel, so there was no back-and-forth debate." The decisions could also serve to validate the case described below and ultimately to identify the scope of the AMF's powers under similar circumstances. Can the AMF take action against certified representatives in Quebec that provide insurance coverage for property located outside Quebec that belongs to a Quebec resident? Since the Liaison article first appeared in 2013, it appears that no legal precedent has been set on the scope of Sections 218 and 219 of the Act respecting the distribution of financial products and services in such matters.

Mr. Bois also raised the matter of "extraterritoriality" as it relates to oversight organizations. Are the AMF or CHAD's disciplinary committee authorized to hand down decisions concerning property located in Ontario or Nova Scotia?

Mr. Bois based his argument on Section 3119 of Quebec's Civil Code, which reads as follows: "Notwithstanding any agreement to the contrary, a contract of insurance covering property or an interest situated in Quebec, or that is subscribed in Quebec by a person resident in Quebec, is governed by the law of Quebec if the policyholder applies for the insurance in Quebec or the insurer signs or delivers the policy in Quebec." In that light, Quebec civil law takes precedence and should be used to clarify how the contracting parties' rights and obligations are interpreted.

Take, for example, a client who contacts his broker and informs her that he wishes to insure a warehouse located in Ontario, but under his existing Quebec policy. The client may do so "provided that he is a Quebec resident or an individual or company domiciled in Quebec, and provided that the insurance request is processed in Quebec. In that case, it would be a Quebec transaction."

Under Sections 218 and 219 of the Act respecting the distribution of financial products and services, the AMF may take action against Quebec-certified insurance representatives if they are found guilty in another province for actions relating to their work as brokers or agents. "The AMF may suspend a broker's permit and/or impose various conditions, but a court of law in the other province must first hand down a sentence," notes Mr. Jobin.

Based on an article by Rémi Leroux that appeared in the June 2013 issue of Liaison magazine.

[1] Decisions handed down by CHAD on April 22, 2013.