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The restitution order will extend insurance


Denis Méthot

February 20, 2018 07:00

Patrick Déry and Louis Morisset at the parliamentary commission on bill 141. | Photo : Denis Méthot

The restitution order will be extended in the future in the field of insurance, will the bill 141.

This mechanism allows thefinancial markets Authority to obtain restitution of sums obtained by an offender following a breach of the act and to hand it over to wronged consumers. This provision is part of the many consumer protection measures contained in the bill that will soon be taking another step with his study, article by article, and then it is tabled in the national Assembly for adoption.

When the evidence shows that consumers have suffered a loss by virtue of a breach of the securities Act or the Act respecting the distribution of financial products and services, and that the amount to be remitted are sufficient to initiate their distribution, the Authority could obtain from the administrative Tribunal of the financial markets an order to be delivered to consumers cheated.

This restitution order does exist in certain other laws securities in Canada, particularly in Ontario. Under bill 141, it would be in Quebec for the insurance industry, specifies the Authority in its memorandum submitted last week by the parliamentary commission.

Other measures of protection

Bill 141 has other provisions on the protection of consumers. In June 2016, the Authority had launched a whistleblower program voluntary to the attention of people who are witnesses to a breach committed or is about to be who want to denounce it. Since its launch a year ago and a half, this program has led to more than 60 complaints which have led to interventions.

In order to facilitate and encourage disclosures, the bill reinforced this program with the addition of the anti-reprisal provisions additional to the consumers. The Authority proposes that it is forbidden specifically to retaliate against the person who has made a denunciation to the Authority. The demotion, suspension, or dismissal will be presumed by the law to be measures of retaliation, and accordingly, be prohibited.

The Authority goes even further and also provides for an action in damages with a reversal of the burden of proof in favour of the whistleblower in cases where a person proceeds with a denunciation from the Authority and is penalized. In such cases, the whistleblower who is the subject of retaliation may sue the author of the sanctions and damages. It will also benefit from a reversal of the evidence against her.

This remedy shall be in addition to expanded. It will include service providers as well as self-employed workers who are not covered by the Act respecting labour standards.

The financial markets Authority also welcomes the enhancement to the scheme for the compensation of aggrieved consumers who will extend the field of insurance. Section 526 would extend the scope of compensation in the event of fraud, fraudulent tactics or embezzlement committed by a person registered, regardless of the nature of the financial product in question.

The cases of fraud discussed

“For example, specifies the controller, the victim of a fraud committed by an insurance representative, duly registered with the Authority may be compensated, even if the financial product then offered was an investment product, a security, and that this representative did not have authority to provide under its certificate “.

However, the Authority is of the opinion that the scope of the proposed expansion should not be extended to transactions that the representatives certified scammers offer to their customers on a basis that is purely personal.

“The compensation Fund of the financial services cannot be guaranteed against all mishaps could occur between a consumer and a representative. The nature and the information sought by the transaction in question must be confined to acts which arise in the context of the professional duties of the representative, and not in a personal context (…) It is important to ensure that the new field of application of the Funds is now clear to avoid creating false expectations among consumers”, said the Authority.

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