Quebec regulator, the Autorité des marchés financiers (AMF), has reached an agreement with RBC Life Insurance Company, which was ratified by the Financial Markets Administrative Tribunal (TMF) on April 27. Under this agreement, the insurer committed to pay the regulator $588,000.

The AMF’s press release does not specify whether the penalty is an administrative sanction. The agreement approved by the TMF has not yet been published.

The insurer has admitted to breaches of certain provisions of the Act respecting the distribution of financial products and services between January 2014 and April 2018. The group insurance products in question are “Personal Accident Insurance” and “Royal RecoverAssist” offered to RBC Life clients.

The respondent acknowledged that the products in question were promoted and distributed by employees of telemarketing firms, i.e. persons who were not certified with the AMF for this purpose, or by certified persons who did not fulfil all of their obligations during the distribution of these products.

RBC Life confirms that it stopped distributing these products in that manner in April 2018, and has taken steps to prevent the situation from recurring. The amount of the settlement corresponds to the gains realized from these breaches of the Act.

The respondent insurer has also undertaken not to resume the distribution of insurance products in Quebec through persons not certified with the AMF, with the exception of products eligible for distribution without a representative.

Other agreement

The AMF’s press release, issued on May 19, also confirms that the regulator has reached another agreement with RBC Life. The insurer acknowledges that the model used for the distribution of insurance products violated section 50 of the Insurers Act.

The agreement states that RBC Life never intended for a telemarketer to sign up Royal Bank of Canada clients or for clients to be signed up solely by a telemarketer on behalf of Royal Bank of Canada.

The insurer also undertakes to notify all insureds who still hold the products in question that a certified representative is available to answer their questions about these products, in particular to confirm that the product purchased meets their needs.

The AMF states that these agreements with RBC Life have no impact on the validity, terms or conditions of the products concerned.