In February 2022, the Autorité des marchés financiers announced that it would soon hold a consultation to re-examine the regulation of insurers’ obligations related to insurance products offered by student associations. Its launch is imminent. 

In response to the concerns raised by its proposal, the AMF announced at the same time that it was suspending the measures that were to apply in September 2022. It then asked insurers not to make any decisions until the consultation is completed. 

AMF Spokesperson Sylvain Théberge told Insurance Portal that the consultation has not yet begun. “We are finalizing the details of the consultation, which we will be announcing shortly,” he says, adding that the consultation will be very broad, and all stakeholders interested in this issue will be given a chance to voice their opinions. 

Insurance provided by student associations is often referred to as association or affinity group insurance. Life and health and P&C insurers that serve this market can offer competitive pricing by pooling risks.

Informed consent... 

The measures suspended by the AMF require insurers that provide student insurance to ascertain that each student “consents in an informed manner, at the appropriate time and through simple affirmative action, to the payment of a premium in consideration of his or her voluntary participation in the insurance plan,” Théberge explains. 

These measures also stipulated that each student be informed in a timely manner, prior to or no later than the time of enrollment, of the information they need to make an informed decision. 

... an obligation not always fulfilled 

With these measures, the AMF wanted to close the loopholes in the industry regarding the obligation to ensure that the clients of these groups give informed consent when they sign up for a group insurance product.

“This obligation is not adequately met in the case of supplementary health insurance offered by student associations. The AMF has been working for several years, in conjunction with the industry, to improve practices in this area to ensure that they comply with the legislation,” the regulator ruled. 

By suspending the measures despite its concerns, the AMF wanted to avoid cases where students are deprived of insurance. 

“There are two valid objectives here that collide, namely the protection of students who must not be enrolled without their knowledge or against their will in insurance products that they do not know exist or that they do not need, and the accessibility of insurance products that meet the real needs of students who wish to continue to benefit from them,” says Louis Morisset, President and CEO of the AMF. 

Now that it has published its consultation document, the regulator wants to quickly bring stakeholders together to identify “possible solutions to optimally reconcile these two objectives.” The AMF will present the findings of the consultation in a report to the Minister of Finance. 

The obligation to provide informed consent for group insurance has caused a stir in the industry. For one, Desjardins Financial Security and the Fédération des caisses Desjardins was slapped with a class action suit initiated by Option consommateurs. The consumer rights group accused Desjardins of enrolling students in loan insurance without their knowledge. Under the settlement reached by the two parties, a claims process for reimbursement of all premiums collected ran from May 14 to August 12, 2021.