How Quebec’s language law may affect outside insurance providers

Quebec’s recently enacted language law is creating concerns that smaller insurance providers may consider pulling out of the province.

Bill 96 (Law 14), An Act respecting French, the official and common language of Québec, came into effect June 1. Under the law, written publications and documents — the latter of which includes insurance — must now be in French. There can be a version in English or another language, as long as a French version is available.

Certain types of contracts may be drafted in English only, such as “insurance policies from outside Québec or uncommon in Québec where there is no French equivalent in Québec,” Stikeman Elliott LLP said in a blog posted the day the law came into effect.

“A good [exception] example would be a marine cargo policy,” said Curtis Killen, president and commercial insurance broker at KBD Insurance, a brokerage with offices in Montreal and Ottawa. “If it originates from outside of Quebec, [in] that [specific marine policy example], it would be okay to send it in English only.”

Standard-form contracts, such as those involving “common insurance” like home/auto insurance or regular commercial insurance (like property liability), must now be in French first. “Even if you’re an English-speaking person and you request to have the documents in English, they still need to put the French version first followed by the English version,” Killen told Canadian Underwriter.

Killen said he had one small client who decided to pull out of the market rather than translate their insurance policies into French. “It wasn’t a big impact for us. It’s very, very miniscule.”

But he said other insurance providers, such as small Lloyd’s coverholders or brokers, may be affected by the language law.

“If you’re a coverholder, a lot of times the software to issue the policies, you can only issue the policy in one language. You can’t do it in both,” said Killen, who is also a Lloyd’s coverholder. “And so, it creates a lot of back-end administrative work.”

Buyer beware

Lawyers have raised concerns about the new regulation. During a regulatory panel discussion at the National Insurance Conference of Canada (NICC) in September in Montreal, Dentons LLP partner Laurie LaPalme stressed compliance with the new French-language laws.

“It’s buyer-beware if you’re going to be doing other things than being fully compliant, because the exemptions are very limited,” said LaPalme, Dentons partner and national lead of its corporate and regulatory insurance practice. “You may be in a world of hurt because… there will be really high burdens to meet in order to avoid sanction or compliance.”

The Office québécois de la langue française has indicated they will fine rule-breakers, and penalties increase for subsequent repeat offences. LaPalme said there are “no decisions out there. We haven’t seen enforcement but as lawyers… we can’t tell you what the enforcement regime is going to be like.

“So, our advice to all of you: even though there is a shortage of translators, please translate your policies.”

Killen acknowledged that “a legal contract is very, very difficult to translate. You can get 10 different translators to translate something from English to French and you’re going to get 10 different versions.”

Even a bilingual website, like KBD’s, involves a lot of added costs and administrative work, he said.

Larger companies operating in Quebec will already have French and English wordings, so this law likely won’t have any impact on them. “Something like this is only going to help local markets because they already have all the translations,” Killen said.

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