Quebec brokers group concerned by proposed changes to Article 38

Published: November 25, 2017

Updated: July 24, 2018

Author: Luke Jones



The Regroupement des cabinets de courtage d’assurance du Québec (RCCAQ), says it is worried about a proposal to change provincial law and mandate brokerages to quote at least four markets on each insurance proposal.

In a release, the broker association says it applauds the reasons the government wants change, but is concerned about how those changes will be implemented. The comment comes after the Quebec government introduced an amendment to Article 38 in a bid to clarify the “20% rule”, which prevents financial institutions from holding more than 20% voting share (50% non-voting shares) from an insurance brokerage firm.

This rule was introduced to stop major companies from taking control of brokers, allowing Quebec’s brokers to remain as independent as possible. The new amendment aims to make the difference between a brokerage and an agency clearer. “At least four (4) different insurers who do not belong to the same financial group.”

RCCAQ says the four-insurer requirement is too high and should be reduced to two.

 “Although the government’s desire to clarify the definition of brokerage activities is laudable, the RCCAQ has reservations about the measures put forward to reach that goal,” the association told Canadian Underwriter.

 “Establishing a minimum of four insurers’ quotes for each client proposal and setting a participation limit of 20% in a brokerage firm’s decision making or equity structure are measures that are difficult to carry out.”

Instead, the RCCAQ recommends that “each firm have contracts signed with at least two different insurance companies at all times (personal as well as commercial insurance).”