D-9.2, r. 2 - Regulation respecting firms, independent representatives and independent partnerships

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29. Except regarding the category of claims adjuster employed by an insurer, the insurance contract covering the liability of an independent representative, firm or independent partnership must satisfy the following conditions:
(1)  The coverage amount must not be less than $500,000 per claim and, for each 12-month period, not less than
(a)  $1,000,000 for an independent representative;
(b)  $1,000,000 for a firm or an independent partnership having 3 representatives or fewer acting on behalf of the firm or the independent partnership; and
(c)  $2,000,000 for a firm or an independent partnership having more than 3 representatives acting on behalf of the firm or the independent partnership;
(2)  The insurance contract may stipulate a deductible not exceeding;
(a)  $10,000 for an independent representative;
(b)  $10,000 for a firm or an independent partnership having 3 representatives or fewer acting on behalf of the firm or the independent partnership; or
(c)  $25,000 for a firm or an independent partnership having more than 3 representatives acting on behalf of the firm or the independent partnership;
(3)  The insurance contract must also contain provisions to the following effect:
(a)  in the case of a firm, that the coverage shall extend to the liability arising from the fault, errors, negligence, or omissions committed in the pursuit of the firm’s activities and from those committed by its mandataries, its employees or the trainees of its representatives, in the performance of their duties, regardless of whether or not such persons are still so engaged on the date of the claim;
(b)  in the case of an independent representative, that the coverage shall extend to the liability arising from the fault, errors, negligence, or omissions committed in the performance of his duties and those committed by his mandataries, his employees or his trainees in the performance of their duties, regardless of whether or not such persons are still so engaged on the date of the claim;
(c)  in the case of an independent partnership, that the coverage shall extend to the liability arising from the fault, errors, negligence, or omissions committed in the pursuit of activities of his partners and the representatives in his employ and from those committed by their mandataries, their employees or the trainees of the partners and representatives in his employ, currently or in the past, in the performance of their duties, regardless of whether or not such persons are still so engaged on the date of the claim;
(d)  that the coverage provided in respect of the activities of a firm, an independent representative or the partners or representatives employed by an independent partnership for the period during which the contract is in effect will continue to apply beyond the insurance period provided for in the contract in respect of the activities contemplated by such coverage for a further term of 5 years from the time the firm, independent representative or independent partnership was struck off or suspended from the Authority’s roll;
(e)  that the time within which an insurer must notify the Authority of its intention not to renew or its intention to cancel the contract is 30 days prior to the date of non-renewal or cancellation;
(f)  that the insurer must notify the Authority upon receiving notice of cancellation of an insurance contract from a firm, an independent representative or an independent partnership;
(g)  that the insurer must give notice to the Authority of the receipt of any claim, irrespective of whether or not the insurer decides to honour the claim.
The amount of the deductible stipulated in the insurance contract may nevertheless be greater than the amount set out in subparagraphs a to c of subparagraph 2 of the first paragraph, provided that the insured maintains at all times liquid assets at least equal to the amount stipulated in the contract. “Liquid assets” means the total of cash and securities immediately convertible into cash.
O.C. 832-99, s. 29; O.C. 1014-2003, s. 1.