Charter of the French Language: Major impacts on insurance ahead

Quebec’s reform of the Charter of the French Language being carried out via Bill 96 will have a definite impact on insurance, says a lawyer who has studied the sections of the law that will be amended.

Nathalie Durocher, a lawyer-entrepreneur specialized in Insurance Law at Delegatus, mentions that if article 44 of Bill 96, which proposes an amendment to section 55 of the Charter of the French Language, is adopted with its current wording, all insurance policies issued in Quebec will have to be available and offered first in French and then in English, if that is the express wish of the insured. “The usual clause found in some insurance policies available only in English, to the effect that the parties expressly agreed that the policy be written in English, will no longer be acceptable. That represents quite a bit of work for some insurers who don’t have a large presence in Quebec, who will have to release budget and translate their policies only available in English,” she told Insurance Portal.

Why so much work? “The law is clear that contracts of adhesion, including insurance contracts, must be written in French and Quebec’s Office de la Langue Française requires that insurance contracts be available in French. However, many insurance contracts with global coverage, particularly for large companies operating in Quebec and other Canadian provinces, are negotiated and written in English,” Durocher explains.

She adds that the current wording of the amendment to section 55 of the Charter, if adopted as is, would require, for example, excess insurers of insurance towers and other insurers covering special risks to translate their wordings issued in the province of Quebec.

Proposed changes

The source of all this extra work: The amendment of section 55 of the Charter, which affects contracts of adhesion, such as those found in insurance, which cannot be negotiated by mutual agreement.

The Charter currently reads as follows:

“Contracts pre-determined by one party, contracts containing printed standard clauses, and the related documents, must be drawn up in French. They may be drawn up in another language as well at the express wish of the parties.”

Section 44 of Bill 96 proposes to amend the charter as follows:

“Section 55 of the Charter is amended (1) by striking out “printed”;

(2) by replacing the second sentence by the following sentences: “The parties to such a contract may be bound only by its version in a language other than French if, after examining its French version, such is their express wish. The documents related to the contract may then be drawn up exclusively in that other language.”;

(3) by adding the following paragraphs at the end:

“No party may, unless the other party has examined the French version of the contract referred to in the first paragraph and has explicitly expressed willingness to do so,

(1) make the other party adhere to a contract of adhesion drawn up in a language other than French;

(2) enter into a contract with the other party that contains a standard clause drawn up in a language other than French;

or (3) send the other party a document related to either of those contracts if the document is drawn up in a language other than French. No party to a contract referred to in the first paragraph may require from the other party any sum whatsoever for the drawing up of the French version of the contract or of the related documents. This section does not apply to a contract of employment and the related documents.”

The consequences

How should we interpret the bill? “The proposed amendment is clear – a French version of insurance contracts issued in Quebec will be mandatory,” says Durocher. “If that is the government’s intention, insurers will have to provide French versions for all their wordings intended for the Quebec market. For insurers with a global market, that could result in significant costs, and some may not even have the capacity or the will to translate their wordings and simply decide to withdraw from the Quebec market.”

In short, if article 44 of Bill 96 is adopted as is, neither the clause to the effect that the parties have expressly agreed that an insurance policy be written in English nor an endorsement in which the insured indicates that they require that their policy be issued in English will be sufficient to justify the absence of a French version. “It will be necessary to demonstrate that there is a French version of the policy before binding the parties with the English version,” she says.

Given the scope of the amendments proposed by Bill 96, not only for insurers, but also for companies with 50 or more employees, Durocher expects that a delay of at least one year should be given to implement such changes, following the adoption of Bill 96. “Insurers and wholesalers will need time to translate their policies and endorsements that have not been translated into French,” she says.

Insurer lobbies react

Insurance Bureau of Canada (IBC) says it is studying the implications of some provisions of Bill 96. “We will make the necessary representations depending on the outcome of this analysis,” Pierre Babinsky, IBC's director of communications and public affairs, told Insurance Portal.

At the Canadian Life and Health Insurance Association (CLHIA), head of government affairs Jeremy Drivet told Insurance Portal that “the CLHIA members intend to comply with the amendments proposed by Bill 96 to section 55 of the Charter of the French Language.”