La Capitale Civil Service Insurer was ordered to pay an administrative penalty of $65,000 under an agreement with the Autorité des marchés financiers (AMF). The regulator found that the insurer violated the rules linked to distribution of a group insurance product without a representative.
The AMF accused La Capitale of having sold the product for a 15-year period through the Société Saint-Jean-Baptiste de Rivière-du-Loup, without having previously given the client a related distribution guide or sending the guide to the AMF. More than 3,500 members purchased the product during that period.
However, the product has not been offered since 2014, when the AMF noted the lack of the distribution guide. In addition, the Société Saint-Jean-Baptiste de Rivière-du-Loup did not appear in order 1054-2002, which authorized the Sociétés Saint-Jean-Baptiste and the Sociétés nationales des Québécoises et des Québécois to sell their members life insurance.
La Capitale says it has put in place measures to prevent a similar situation from recurring and will continue to honour its contracts still in force.
For its part, the Société Saint-Jean-Baptiste de Rivière-du-Loup has pledged to ensure that a distribution guide will be remitted to members for products sold by its intermediary.