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A consumer
A future professional
A financial sector participant
Replacement guarantees are currently offered by motor vehicle
dealers at the time of purchase or long-term lease of a new or used
vehicle by the consumer. Although there are different versions of
this product, the most common type of replacement guarantee
warrants that in the event of total loss, the vehicle will be
replaced by an equivalent vehicle from the same dealer.
The dealer is generally the person offering these
guarantees. Some representatives licensed by the AMF also offer
replacement guarantees.
The manufacturer creates the guarantee and assumes
its costs and risks. Currently, a manufacturer may be an
insurer.
The administrator manages the guarantee, deals
with the dealer, provides the dealer with the guarantee contracts,
processes claims, etc.
At present, replacement guarantees are offered in different ways: A
manufacturer may hire an administrator who does business with a
dealer, who, in turn, offers the guarantee to the consumer. Or,
manufacturers may administer guarantees themselves and deal
directly with dealers. Lastly, some dealers occasionally act as
administrators and manufacturers of
replacement guarantees. Dealers who do not administer or
manufacture replacement guarantees are not required to register
with the AMF.
On March 27, 2009, the AMF indicated that a motor vehicle
replacement guarantee is an insurance product subject to the AMF
oversight. A 12-month transition period was provided to enable the
manufacturers and the administrators to make the changes required
while carrying out their daily operations. Taking into
consideration the additional work involved with the implementation
of this new insurance product, the AMF extended the transition
period to September 30, 2010 instead of March27, 2010.
However, only the authorized manufacturers and
administrators listed on the AMF website may continue to
offer the replacement guarantees in their current form throughout
the transition period.
As of October 1, 2010, the manufacturers and administrators will no
longer be authorized to offer the replacement guarantee;
henceforth, the replacement insurance policy takes the place of the
replacement guarantee. This policy will be exclusively offered
through the insurance brokers and agents network as well as through
the car dealers network subject to the Act respecting the
distribution of financial products and services, L.R.Q., c.
D-9.2.
Thereby, when a consumer enters into a replacement insurance
agreement, he will deal with a distributor and an insurer subject
to the AMF oversight. He will also be presented with a standard
product duly approved by the AMF and the GAA (Groupement des
assureurs automobiles). To that effect, the standard automobile
insurance contract must apply: “ Q.P.F. N° 5 Replacement
Insurance”
List of manufacturers and administrators of replacement
guarantees:
Press release:
Notice :
