22. Representatives, financial institutions, firms and enterprises that offer financing for the purchase of goods or services and that require the debtor to subscribe for insurance to guarantee the reimbursement of the loan must give the debtor a notice, drawn up in the manner prescribed by regulation of the Authority, stating that the debtor may subscribe for insurance with the insurer and representative of the debtor’s choice provided that the insurance is considered satisfactory by the creditor, who may not refuse it without reasonable grounds. They may not subordinate the making of the contract of credit to the making of an insurance contract with the insurer they specify.
No contract of credit may stipulate that it is made subject to the condition that an insurance contract made with such an insurer remain in force until the expiry of the term, or subject to the condition that the expiry of an insurance contract will entail forfeiture of term.
The rights of the debtor under the contract of credit shall not be forfeited when the debtor rescinds, cancels or withdraws from the insurance contract, provided that the debtor subscribes for insurance with another insurer that is considered satisfactory by the creditor, who may not refuse it without reasonable grounds.
1998, c. 37, s. 22; 2002, c. 45, s. 499; 2004, c. 37, s. 90; 2009, c. 25, s. 106.