Overview
This bulletin reviews the main regulatory developments in insurance and financial services distribution in Québec over the past six months. As discussed below, the Autorité des marchés financiers (the “AMF”) and the government of Québec have been active during this period.[1]
Governance of Registrants and Duties of Responsible Officers
On April 9, 2026, the AMF launched a regulatory consultation on governance and management rules for Registrants, as well as on the duties of responsible officers. The consultation ends on July 8, 2026. Draft regulations have also been published for comment. In its consultation notice, the AMF indicated that it expects these changes to be subject to transitional measures and that it intends to develop tools to support Registrants in implementing them.
The consultation focuses primarily on two draft regulations: the draft Regulation respecting representatives acting as responsible officer and the draft Regulation to amend the Regulation respecting the registration of firms, representatives and independent partnerships. Related amendments are also proposed to certain other regulations made under the Act respecting the distribution of financial products and services (“Distribution Act”) (collectively, the “Regulatory Project”).
The Regulatory Project is primarily intended to incorporate into regulation certain expectations set out by the AMF since 2018 in its Governance and Compliance Guide. It also reflects recent court decisions relating to the governance of Registrants, as well as the evolution of business models in the distribution of financial products and services. The Regulatory Project would provide for the establishment, maintenance and implementation of written policies and procedures governing the activities of Registrants, taking into account the nature, size and complexity of those activities.
These proposed policies and procedures would be intended to set out the standards of conduct adopted by a Registrant, the control and supervision measures established and, where deficiencies are identified, the corrective actions to be taken. They would also seek to ensure that the Registrant, as well as its officers, representatives and employees comply with the Distribution Act and its regulations, as well as with their contractual obligations. Depending on the activities carried on by the Registrant, the policies and procedures should also address, various aspects of governance and compliance, including the proficiency of representatives, recruitment, third-party relationships, conflicts of interest, incentives, gifts and fees charged to clients, business continuity, the carrying on of activities from outside Québec, information security, and the use of artificial intelligence.
The Regulatory Project would also clarify the duties of the responsible officer. As proposed, the responsible officer would be required to ensure the implementation, communication and observance of the policies and procedures established by the Registrant; monitor and assess compliance of the Registrant’s activities and those of its officers, representatives and employees with the Distribution Act and its regulations; document oversight and control measures; conduct periodic reviews of client files; and submit an annual report on the compliance of the Registrant’s activities to the directors, officers or partners, as applicable. The Regulatory Project would also introduce certain requirements for individuals seeking to act as a responsible officer, including the successful completion, prior to appointment, of an examination covering the required competencies, as well as rules governing situations of absence or incapacity.
In its consultation notice, the AMF also addresses the role of certain Registrants carrying on responsibilities related to the distribution of financial products and services, including managing general agents (MGAs), wholesalers and banners. However, the AMF does not propose creating a distinct regulatory status for these participants, on the basis that such formal recognition would not enhance consumer protection and could instead dilute the respective responsibilities of insurers and Registrants. In this regard, the AMF notes that MGAs remain subject to the Distribution Act when acting as Registrants, while insurers that outsource activities to them remain subject to the framework under the Insurers Act. The notice nonetheless states that the Regulatory Project would allow MGAs to play an intermediary role between insurers and other Registrants in respect of the services they provide, particularly in compliance matters . This intermediary role is particularly relevant in the context of the proposed rules on selecting and managing business relationships, as well as the outsourcing of certain duties of the responsible officer, as summarized in this bulletin.
The Regulatory Project would also establish a framework for arrangements entered into by Registrants with third parties and for the outsourcing of tasks. In its consultation notice, the AMF indicates that a Registrant that decides to do business with a third party should, before entering into the arrangement, conduct prior due diligence on that third party and the risks associated with the contemplated relationship. A Registrant could not delegate activities that are reserved or exclusive to it under the Distribution Act, including registration obligations or the offering of financial products and services. The responsible officer’s duties relating to the matters covered by the Regulatory Project could be outsourced, in whole or in part, only to a single third party, except for matters relating to information security, which could be entrusted to a separate third party. The outsourcing agreement would have to prohibit the third party concerned from subcontracting these tasks and require that third party to produce an annual report on the compliance of the relevant activities. The Registrant would also be required to notify the AMF of the identity of the third party or parties and the tasks outsourced.
Use of Artificial Intelligence by Covered Financial Institutions
In April 2026, the AMF published the final version of its Guideline for the Use of Artificial Intelligence, which takes effect on May 1, 2027, and applies to Covered Financial Institutions.
This guideline sets out the AMF’s expectations regarding the measures a Covered Financial Institution should take to manage, on a holistic basis, the risks associated with artificial intelligence systems (“AISs”) and ensure the fair treatment of clients. It applies to any use of an AIS by the institution, whether or not such use relates to the handling of client records.
For the purposes of the guideline, an AIS means a “machine-based system that, for explicit or implicit objectives, infers, from the input it receives, how to generate outputs such as predictions, content, recommendations, or decisions that can influence physical or virtual environments. Different AISs vary in their levels of autonomy and adaptiveness after deployment.”
With respect to the management of risks associated with the use of AISs, the guideline provides that a Covered Financial Institution should identify significant AIS-related risks, document them and maintain an up-to-date list based on a risk-based classification. The institution should regularly inventory all of its models and AISs, record those with non-negligible risk in a centralized inventory, and assign a risk rating to each in order to assess their use in light of the institution’s risk appetite.
The AMF also sets out expectations regarding the AIS lifecycle, including the documentation of organizational needs, the choice of AIS, data quality, explainability requirements, validations performed, as well as applicable controls based on the risk rating. The validations should address, among other things, the explainability of outputs, cybersecurity, the timeliness of methods, tools and procedures, as well as components sourced from a third party. The guideline also identifies several risks to be monitored, including risk of bias, discrimination on prohibited grounds, cybersecurity, hallucination, intellectual property infringement, and misalignment between the institution’s ethical positions and the outcomes generated by the AIS.
With respect to communications with clients, a Covered Financial Institution should inform clients when they are interacting with an AIS and indicate that they may request to speak with an individual acting on behalf of the institution. Any content generated with the help of an AIS should also be accompanied by a notice to that effect. Where an AIS makes a decision concerning a client or recommends a decision to an individual acting on the institution’s behalf, the Covered Financial Institution should explain that decision to the client in plain and easy-to-understand language.
Third-Party Risk Management by Covered Financial Institutions
The Third-Party Risk Management Guideline published in March 2026 will take effect on April 1, 2027. It applies to Covered Financial Institutions, covers all arrangements entered into with third parties, and will replace the April 2009 Outsourcing Risk Management Guideline.
Based on the principle of proportionality—namely an institution’s size, nature, complexity and risk profile, as well as the criticality and level of risk specific to each arrangement—the guideline emphasizes that a Covered Financial Institution retains ultimate responsibility for all activities, functions and services outsourced to a third party.
A third-party arrangement means any arrangement entered into by a Covered Financial Institution with an individual or other legal entity for the provision of goods or services, whether commercial or strategic in nature. This includes: outsourcing arrangements, intragroup arrangements, distribution arrangements, business relationships involving data, partnerships, and cloud services or software arrangements.
The guideline specifically addresses distribution arrangements, namely arrangements between a Covered Financial Institution and a person that distributes financial products and services within the meaning of the Distribution Act. The expectations set out in the guideline are complementary to those set out in other guidelines, including the Sound Commercial Practices Guideline.
The AMF expects a Covered Financial Institution to establish a third-party risk management framework that spans the entire lifecycle of an arrangement, is aligned with the overall operational risk management framework, takes into account the institution’s risk appetite and third-party strategy, and clearly defines roles and responsibilities in this regard.
The guideline also sets out expectations regarding due diligence, entering into arrangements, contractual provisions, monitoring arrangements, incident management, subcontracting, data protection, business continuity, exit strategies, and maintaining an inventory of third-party arrangements.
Replacement Insurance and Distribution Without a Representative
The Act to amend various provisions mainly with respect to the financial sector, assented to on May 9, 2024, amended the Distribution Act to remove the ability of distributors to offer replacement insurance in respect of a vehicle they sell. This amendment was initially scheduled to come into force on July 1, 2026. However, Bill 11, An Act to amend various provisions for the main purpose of reducing regulatory and administrative burden, which is currently under legislative consideration, would defer this coming-into-force date to January 1, 2027. Subject to the passage of this bill, automobile dealers and recreational vehicle dealers could therefore continue to offer Q.P.F. No. 5 replacement insurance under the current framework until that new date.
Updates: Climate Change and Stress Testing
In December 2025, the AMF revised its Climate Risk Management Guideline, originally published in July 2024 and previously amended in March 2025, to provide, among other things, further clarification regarding climate-related disclosures, scenario analysis, and the integration of climate risks into the governance and risk management practices of Covered Financial Institutions.
The AMF also revised its Stress Testing Guideline, first published in June 2012, in December 2025 to clarify, among other things, certain expectations regarding scenario analysis and reverse stress testing.
Other Recent Changes
On May 21, 2026, the AMF published regulatory instruments and targeted guidelines addressing, on the one hand, the Fonds d’indemnisation des services financiers and, on the other hand, the treatment of cryptoasset exposures for regulatory capital purposes.
With respect to distribution, the Regulation to amend the Regulation respecting the eligibility of a claim submitted to the Fonds d’indemnisation des services financiers came into force on June 4, 2026. Among other things, it amends the regulation to add provisions relating to the annual contribution to the fund, clarifies certain terms applicable to claims, and caps at $75 million the total amount of compensation that may be paid for all eligible claims arising from a single event.
With respect to insurance, the AMF published the Guideline on capital treatment of cryptoasset exposures – Insurance, alongside the Guideline on capital and liquidity treatment of cryptoasset exposures – Financial services cooperatives, authorized trust companies and authorized deposit institutions. Following the consultation held from February 12, 2026, to March 12, 2026, these guidelines will come into effect on July 1, 2026, and will replace the framework established in 2023. They complement the AMF’s existing financial management guidelines and set out, depending on the type of Covered Financial Institution concerned, how cryptoasset exposures are treated for regulatory capital or liquidity purposes.
On June 4, 2026, the AMF launched another regulatory consultation on the draft Regulation to amend the Regulation respecting the issuance and renewal of representatives’ certificates. This draft regulation is primarily intended to adapt the certificate issuance regime to the principle of “certificate-to-certificate” recognition under the Act to facilitate the trade of goods and the mobility of labour from the other provinces and the territories of Canada. Subject to certain conditions, applicants from another Canadian province or territory could obtain equivalent professional recognition in Québec and be exempt from completing a probationary period. The draft regulation also introduces an additional pathway to satisfy the minimum training requirement in damage insurance and claims adjustment. The consultation period ends on July 6, 2026.
