The Autorité des marchés financiers (AMF) is warning consumers about the risks of participating in unregistered, crowd-sourced insurance schemes.
The AMF issued an alert on Tuesday about “the recent emergence of peer-to-peer risk sharing platforms”.
Companies are offering online platforms that allows consumers to form pools to protect similar types of property without using an insurer, the AMF says in a statement.
“Consumers are asked to determine the risks they want to cover, premiums and claims processing, since the pool’s participants decide together on the eligibility of claims,” the statement explains.
The AMF views these sorts of products as similar to insurance products, and it stresses that insurance is a regulated activity, which requires registration and regulatory approval.
The regulator has “yet to decide on the compliance of these products or services and the companies offering them,” the statement says. “In the interim, it is asking consumers to be careful.”
The AMF warns that consumers that participate in these sorts of P2P arrangements “could be exposed to losses, for example if pool participants unreasonably refuse to pay a claim or if the pool has insufficient funds.” As well, any losses due to the insolvency of the firms involved would not be covered under the province’s compensation regimes.
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