Compensation tied to recruitment, particularly among managing general agents (MGAs) in the life and health insurance sector, drew extensive comments from associations and companies that participated in the consultation conducted by the Autorité des marchés financiers (AMF) on its proposed governance regulations for registered firms. AMF is the government body that regulates financial markets, oversees the financial sector, and protects consumers in the province of Quebec.

The consultation, launched on April 10, 2026, ended on July 24. In its explanatory document outlining the proposed changes, the AMF emphasizes the importance of establishing common requirements that are aligned with those applied by other provincial regulators.

Among the proposed amendments to the Règlement sur le cabinet, le représentant autonome et la société autonome, the AMF is introducing significant changes following section 11 by adding a new section on management rules comprising 31 provisions. The recruitment of new personnel is addressed in sections 11.9 through 11.11.

On this point, Desjardins notes that the AMF does not specify whether the provisions governing the recruitment of new personnel apply to all employees. “It would be preferable to limit the application of section 11.9 to representatives and key employees for whom risk-based criteria would apply,” the financial institution says.

For its part, iA Financial Group recommends that the AMF “more explicitly clarify the obligations applicable to firms acting as managing general agents with respect to their recruitment, training and supervision responsibilities.”

The company believes that some of the proposed restrictions related to recruitment should be reconsidered so they do not hinder the onboarding and support of new representatives. “The ability of firms to develop a healthy succession pipeline is essential,” iA says. It adds that onboarding, training, coaching and mentoring activities are critical.

As a result, iA is asking that the wording of section 11.11 be revised, or removed from the proposed regulation, “because of the unintended consequences it could have on the support provided to new recruits.” The framework proposed by the AMF “should allow the requirements to be implemented in an optimized manner when an entity holds both an insurer’s licence and a firm’s licence.” Additional distinctions should be made, particularly with respect to recruitment, iA Financial Group insists.

The Canadian Life and Health Insurance Association (CLHIA), meanwhile, suggests “clarifying and easing recruitment requirements so they are applied using a risk-based approach rather than as mandatory, uniform checks for all employees.”

The CLHIA does not recommend creating a new regulatory category for managing general agents. However, it believes the Authority should clarify that a firm acting as a distribution intermediary is required to comply with the obligations relating to recruitment (section 11.9), training (section 11.4) and supervision.

Canada Life recommends removing or amending section 11.11. “Our concern relates particularly to firms, some of which initially operated as MGAs before reorganizing under an independent firm licence, where an owner-advisor or senior advisor continues to receive a portion of the commissions generated by the activities of junior advisors whom they recruited, trained and continue to supervise.”

The current wording of the section “could penalize firms” that promote succession planning within the independent distribution network, Canada Life adds.

Other reactions

In its submission, Cloutier Financial Group supports the proposed rules governing compensation tied to the recruitment of new representatives. The proposed framework “clearly reaffirms that a representative’s primary role is to provide clients with appropriate advice.”

Cloutier believes “it is desirable to avoid recruitment incentives that could divert a representative’s attention.” Furthermore, prohibiting any compensation solely for recruiting another representative “helps limit the risk of excesses associated with models focused on network growth rather than on the quality of service provided to clients,” the MGA adds.

According to Greatway Financial, one of Canada’s largest life insurance MGAs, the rules proposed by the AMF in section 11.11 regarding compensation for new recruits should be more clearly defined because they impose an overly restrictive framework on “a legitimate and long-established business model that has successfully expanded access to financial advice across Quebec and Canada.”

“Consumer protection and preservation of legitimate distribution models are not mutually exclusive objectives. The regulatory framework can achieve both,” the company adds, arguing that the proposed one-year limit on compensation related to training and developing new recruits is too short.

That view is shared by Primerica Financial Services, which writes that this recruitment model “has expanded access to financial services in Quebec” for more than 40 years. The one-year limit is especially problematic because “an aging workforce makes the recruitment of new representatives more important than ever.”

According to Primerica, “a regulator does not possess the internal knowledge of businesses necessary to interfere in the complex commercial relationships that exist among thousands of companies and tens of thousands of workers in the financial services sector, nor to question the fairness of the compensation they pay in relation to the services provided.”

World Financial Group (WFG) believes certain elements of the AMF’s proposal should be “clarified or reconsidered,” particularly section 11.11. WFG is one of several MGAs that have adopted a recruitment-based growth model. No compensation is directly tied to joining the organization or to the onboarding process, WFG specifies.

“The writing representative receives the largest share of the compensation directly related to the sale. A portion is allocated to other representatives who provide ongoing supervision, training support and business development assistance related to that production,” WFG says, while another portion of the compensation funds oversight, supervision, compliance and operations.

According to WFG, its model does not increase costs for clients. The commission paid by the insurer and the premium paid by the client remain the same. The agency has 17 branches in Quebec, and its approximately 1,000 representatives serve clients with more than 7,000 insurance contracts. Those clients, many of whom have modest incomes, are not well served by other insurance distribution models, the company argues.

The Canadian Association of Managing General Agents (CAMGA) acknowledges the AMF’s position that it does not intend to create a separate legal status for managing general agencies. CAMGA reiterates the position it previously set out in a white paper submitted to the Canadian Insurance Services Regulatory Organizations (CISRO), proposing the creation of a “Treating Customers Fairly guideline specifically for MGAs.”

In that context, MGAs should form a distinct group within the proposed regulatory framework, CAMGA insists. Classifying them separately from insurers and registrants would provide greater clarity in the distribution market and distinguish their role from that of brokers and insurers, the association adds.

Responsible officer

Several groups are calling for recognition of relevant expertise or grandfathering for responsible officers already in the role who do not hold a certificate issued by Quebec’s regulator in the insurance disciplines.

The new Regulation respecting representatives acting as responsible officers requires, among other things, passing an examination and participating in continuing education activities.

Desjardins points out that the responsible officer of a firm that is part of a financial institution is not always a certified representative. In such cases, many hold other licences, such as in securities or financial planning, where continuing education requirements are already quite demanding.

According to Primerica, the new regime applicable to responsible officers and the expanded governance requirements “duplicate compliance structures that are already in place,” particularly for firms operating nationally. These additional requirements would increase costs even though no evidence has been provided demonstrating their effectiveness.

For its part, iA Financial Group believes larger firms must have “the flexibility needed to appoint the responsible officer best suited to their circumstances.” The proposed transitional measure is insufficient, the company adds. Requiring a manager who was previously certified to maintain a licence after moving into a management role “would introduce unnecessary rigidity and administrative burden that do not appear necessary to achieve the objective of protecting the public.” As a result, iA suggests allowing the competence of a responsible officer to be demonstrated through means other than certification.

Another concern for iA Financial Group is section 4 of the regulation. As part of the responsible officer’s duties, the AMF requires the submission of an annual compliance report. That requirement “could result in more than 250 annual reports for a firm like ours,” the company says.

The Insurance Bureau of Canada (IBC), meanwhile, recommends clarifying the Authority’s proposal to better reflect different operating models. “The responsible officer should remain accountable for the oversight function without being required to personally perform all of the operational tasks associated with it,” the organization adds.

The CLHIA recommends that the Authority’s proposal “recognize that the competence of a responsible officer may be demonstrated through means other than certification, including experience, professional qualifications and access to specialized compliance, risk management or legal support functions.” The framework should allow non-certified individuals to act as responsible officers where the registrant can demonstrate, through objective competency criteria, that the individual possesses the required qualifications.

At the same time, while supporting the objective of ensuring the independence of the responsible officer, the CLHIA says that “a rigid requirement for structural or organizational independence would be difficult to implement and could be incompatible with the integrated structures of financial institutions.”

According to CAMGA, designated responsible officers already recognized by the AMF should be grandfathered. Recognition of prior qualifications for holders of the Fellow, Chartered Insurance Professional (FCIP) designation should also be provided. Like several other groups, CAMGA notes that the proposed rules governing the activities of registrants outside Quebec, particularly the requirement to obtain written client consent, are overly burdensome.

Cloutier Financial Group believes an exemption from the examination requirement should be granted to individuals who have served as responsible officers for a significant period, for example more than 12 months.

For its part, WFG writes that “the skills and experience required to perform the role of responsible officer differ from those needed to ensure business continuity and information security.” As a result, WFG questions whether it is appropriate for those responsibilities to automatically fall to the responsible officer, as proposed by the AMF.

At British Columbia-based Square One Insurance, the company believes the AMF should “exempt responsible officers of extra-provincial firms from local examination and continuing education requirements” if the firm maintains certified representatives in Quebec to handle client interactions. Equivalent licences and continuing education overseen by another provincial regulator should be recognized by the Authority, the company adds.