Quebec’s Committee on Public Finance was the scene June 5 of a spectacular about-face.
At the beginning of the session, Finance Minister Carlos Leitão announced that he was abandoning the integration of Quebec’s self regulatory insurance organizations – the Chambre de la sécurité financière and the Chambre de l'assurance de dommages – into Quebec’s financial regulator, the Autorité des marchés financiers (AMF). The two SROs will therefore continue to exist distinctly and evolve within the scope of their consumer protection mandates of monitoring the ethical practices of licensees.
This decision may have been the price to pay for passage of Bill 141 by June 15 when the legislative session ends.
A very bad idea
“I still think it's a very bad idea and it would be important to have one supervisory authority that can intervene in a comprehensive and coherent manner," Leitão commented in a resigned tone. “By letting the Chambres continue to function the way they operate, there is a risk of duplication and inconsistency and I really hope that there will be no unpleasant event in the meantime. I think that a future legislature will have to agree on the best way to supervise the players in the financial system. But for now, we are withdrawing the proposals (from the bill) and both Chambres will continue to exist."
Carlos Leitão thus has yielded on the question of the SROs just 10 days before the end of the legislative session, whereas he had appeared intractable up until now.
A different diagnosis
"I think it's a very good compromise," said Nicolas Marceau, a Parti Quebecois Member of the National Assembly (MNA), who had made keeping the Chambres one of his main priorities. The Minister and I have not come to the same diagnosis. I think the current model works well and I believe in the virtues of self-regulation."
He recalled that there had been no consensus around the abolition of Chambres and their integration into the AMF. Some industry players were in favor, while others, such as consumer associations, were opposed to it, he added.
Another MNA from the CAQ party, François Bonnardel, who was also opposed to the abolition of Chambres, also welcomed Minister Leitão’s flip-flop.
Even though MNAs have reach a consensus, the decision to maintain the Chambres has not yet been formalized. Amendments to Bill 141 to permit this will be tabled and made public today (June 6), when the Committee on Public Finance resumes its work.
Final report to come
Sources told the Journal de l'assurance, a sister publication of The Insurance and Investment Journal, however, that the clause-by-clause study of Bill 141 should be completed this evening.
If so, the Committee on Public Finance would adopt, tonight, its final report which would then be tabled in Quebec’s National Assembly for adoption early next week.