Quebec’s insurance regulator, insurers team up to simplify province’s auto policies

Quebec’s insurance regulator is teaming up with the province’s auto insurance companies to simplify the province’s auto insurance policies.
Autorité des marchés financiers (AMF) and Groupement des assureurs automobiles du Québec (GAA) announced on Dec. 16 that they have begun the task of simplifying automobile insurance policies Q.P.F. 1 and 5, as well as their endorsements, so that all Quebecers can read them.
In a joint statement, the two groups cited the result of a SOM poll of 1,000 Quebecers, carried out at the end of October 2011. The poll revealed that 58% of respondents surveyed found it hard to understand the terms used in the insurance policies.
AMF and GAA said studies indicate the legal language used in insurance policies is not easy to understand and that 16 years of education were required to do so, which corresponds to university level in Quebec.
AMF spokesperson Danielle Boulet said the initiative falls within the regulator’s mandate to promote financial education.
“It is essential that consumers be able to understand their actions, learn to be vigilant and improve their knowledge of finance,” she said. “With this project, Quebec has taken a leadership role in Canada, and also in the rest of the world.”
As it stands, only those versed in legalese and insurance can understand the automobile insurance policy as it is currently worded, noted Patricia St-Jean, chairwoman of GAA’s board of directors.
“Studies revealed that it was difficult for the average reader to get past the second paragraph of the first page of the text,” she said. “It consists of two sentences, one of which is 103 words long, while no sentence should be longer than 20 words!”
GAA has entrusted the revision of the automobile insurance policy to Éducaloi, a non-profit organization with a mandate to inform Quebecers of their rights and obligations by providing quality legal information in everyday language.