The Quebec Autorité des marchés financiers (AMF) has published draft regulations that would stop insurers from charging clients a fee to withdraw or transfer their segregated funds.
Comments are due Jan. 31 on Quebec’s proposed deferred sales charge (DSC) ban, which would only apply to seg fund contracts entered into or after June 1, 2023, the AMF said in a press release on Thursday.
DSCs are already banned for mutual funds.
If approved, the Quebec regulation would, starting June 1, prohibit insurers from charging clients certain fees if they withdraw or transfer seg funds or if they change the purchase option.
The AMF said Thursday it is “counting on insurers to cooperate in offering holders of contracts entered into before June 1, 2023 an alternative so that they may avoid such charges on amounts invested in such contracts after that date.”
Individual and corporate violators in Quebec would be subject to administrative monetary penalties of $1,000 and $5,000 respectively.
A proposed nation-wide ban on seg fund DSCs was announced earlier by the Canadian Council of Insurance Regulators (CCIR) and the Canadian Insurance Services Regulatory Organizations (CISRO), with the Financial Services Regulatory Authority of Ontario (FSRA) releasing its proposal in November.