Code of Ethics of Claims Adjusters

annotated
FOREWORD
This is the first edition of the annotated Code of Ethics of Claims Adjusters. Designed to make the rules of ethics easier
to understand, this reference tool will serve to guide the claims adjuster in his daily work and maintain the public’s
trust in the integrity and competence of claims adjusters.

Codes of ethics are the centrepiece of professional legislation; they embody the ideals of proper conduct. The rules
found in a code of ethics establish the minimum standards of professional practice. The purpose of this annotated
edition of the Code of Ethics of Claims Adjusters is to help claims adjusters clarify issues related to professionalism and
thus to increase the public’s confidence in their integrity and competence.

The comments in this document are not intended to supplement the regulations currently in force. Rather, their
purpose is to clarify concepts that may seem quite complicated by re-stating them in layman’s terms.

The examples provided are not the only possible cases and should not be taken literally. They are intended solely to
illustrate the concepts under discussion and make them easier to understand. In addition to consulting this document,
readers should not hesitate to contact the Chambre de l’assurance de dommages should they have any questions
whatsoever regarding the scope of their ethical obligations.

CAUTIONARY NOTE
The comments provided herein are not binding on the discipline committee of the Chambre de l’assurance de
dommages, which is an independent, quasi-judicial tribunal uniquely qualified to interpret the Code of Ethics of Claims
Adjusters, the Act respecting the distribution of financial products and services and related regulations.

In the interests of stylistic clarity, the use of the masculine in this document is gender-neutral and refers to both men
and women.

In case of any discrepancy or conflict between the English version and the French version, the French version
shall prevail.

Updated: May 2009

INTRODUCTION
By the Middle Ages, skilled workers had already begun forming their own organizations in order to both protect and
promote the practices of their craft and guarantee their clients the skills they expected. No matter what term was
used — guild, corporation, chamber or professional order — the primary concern of such groups was to train the next
generation, to ensure the quality of work and to maintain client trust in members of the group, be they apprentices,
journeymen or master craftsmen. This was the birth of the self-regulatory body.

This concept of peer-driven professional discipline has stood the test of time. Today, professional supervision is a
meaningful, coherent system whose sole objective is to protect the public. In Quebec, professional orders are governed
by the Professional Code. Many other sectors of activity are governed by legislation or specific regulations designed to
promote professional discipline. In the area of damage insurance, the Quebec government has created the Autorité des
marchés financiers (AMF) and the Chambre de l’assurance de dommages (ChAD).

The ChAD’s duty is to protect the public. This mission has led it to adopt codes of ethics that apply specifically to the
professions its members practice. Like the Code of Ethics of Damage Insurance Representatives, the Code of Ethics of
Claims Adjusters provides a number of rules of proper professional conduct. It is thus similar to the codes of ethics of
many professional orders.

Unlike an act or a regulation, a code of ethics is written in general terms. The word “code” indicates that it contains a
set of rules dealing with a specific topic. The word “ethics” refers to a set of rules and duties that govern a particular
profession, the conduct of those who practice it and the nature of the relationship the professionals have with their
clients and with the public.

The Code of Ethics of Claims Adjusters (referred to herein as the “Code”) is divided into eight (8) Divisions: (I) general
provisions, (II) the various duties and obligations of claims adjusters towards the public, (III) towards their clients, (IV)
towards claimants, (V) towards insurers, (VI) towards representatives, and (VII), towards the Autorité des marchés
financiers and the Chambre de l’assurance de dommages. Division Eight (VIII) lists the most common breaches of the
Code of Ethics. In addition to their ethical obligations, claims adjuster must comply with all the provisions of the Act
respecting the distribution of financial products and services as well as any regulations enacted under that Act.
 SECTION 1 – SECTION 3

DIVISION I

General Provisions
1. The purpose of the provisions of this Code is designed to promote the protection of the public and the honest
and competent practice of the professional activities of claims adjusters, regardless of the structure of their
practice, the nature of their contractual relationship with clients or the class of the claims adjustment sector in
which they practice.

This section states that the Code applies to all claims adjusters (according to the definition of a claims adjuster
in section 10 of the Act respecting the distribution of financial products and services, hereinafter referred to as
the “Act”), regardless of the structure of their practice (independent representative, attached to a firm or
employed by an insurer), the nature of their contractual relationship with their mandator (mandated by a
claimant, mandated by or working for an insurer) or the class of claims adjustment sector in which they
practice (personal lines or business lines damage insurance). Furthermore, as stipulated in section 28 of the
Regulation respecting the pursuit of activities as a representative, this code also applies to damage insurance
representatives when they act as claims adjusters (for example, those whose certificate are marked with the
letter E).

Section 1 reminds the reader that the mission of the Chambre de l’assurance de dommages is to protect the
public. It states the purpose of the Code, which is to promote integrity and competence (i.e., honesty and
compliance with all the rules) in the practice of the profession of claims adjuster.

2. Claims adjusters must ensure that they and their mandataries and employees comply with the provisions of the
Act respecting the distribution of financial products and services (R.S.Q., c. D-9.2) and its regulations.

A claims adjuster’s duty is to ensure that he, his employees and his mandataries (those who represent him or
act for him) comply with the Act and its regulations. It cannot be overstressed how important it is for claims
adjusters to read the Act and its regulations, including this Code, and to refer to them as required.

This means that claims adjusters must implement clear policies and procedures to ensure that staff members
receive proper training and professional oversight. They must also implement measures to continuously
monitor the quality of the services they provide.

Although employees who, under section 547 of the Act have acquired certain rights allowing them to exercise
certain activities, the certified claims adjuster overseeing them remains liable before the discipline committee
for any breaches committed by such employees. An employee’s breach of ethics becomes the personal fault of
the claims adjuster.

3. Claims adjusters must not, directly or indirectly, pay or promise to pay remuneration, compensation or any other
benefit to a person who is not a representative in order for that person to act in that capacity or use that title.

Section 3 is aimed at preventing anyone from acting illegally as a representative (including a claims adjuster)
at the request of a certified representative. Only representatives certified by the Autorité des marchés
financiers may hold themselves out as claims adjusters.

Also see section 12 of the Act.

A claims adjuster is therefore prohibited from paying money or giving an advantage (monetary or otherwise)
to a non-certified person to induce him to act as a claims adjuster, attempt to act as a claims adjuster or use
the title of claims adjuster.

5
section 4 – section 8

4. Claims adjusters must not, directly or indirectly, procure a promise of payment or payment of remuneration,
compensation or any other benefit from a person who is not a representative and who acts or attempts to act in
that capacity.

The rule set forth in this section is the corollary of the rule in section 3. In other words, a claims adjuster cannot
accept a monetary payment or other advantage from a person who is not a representative but is acting as, or
attempting to act as, a representative (including a claims adjuster).

A number of situations come to mind: for instance, a claims adjuster who, in exchange for payment, signs a
report prepared by someone who is not a claims adjuster.

5. Claims adjusters must not, directly or indirectly, procure a promise of payment or payment of remuneration,
compensation or any other benefit not authorized by the Act or its regulations from a person other than the
person who has retained their services.

A claims adjuster may not accept money or any other advantage from someone who has not engaged his
professional services, for example a supplier of goods or services. Only the person who hired the claims
adjuster may pay him compensation or any other benefit.

There are certain exceptions to this rule under the Act. For example, a claims adjuster can require that an
insurer pay for his participation in a compulsory professional development activity.

Certain secondary remunerated occupations are allowed as long as they do not contravene sections 2, 3 and 4
of the Regulation respecting the pursuit of activities as a representative.

6. Claims adjusters must not pay, offer to pay or agree to pay any remuneration, compensation or benefit to a
person who is not a representative, except where permitted by law.

A claims adjuster may not pay anyone who is not a certified representative or offer him other benefits such as
gifts, in order to obtain anything whatsoever, nor may he share his fees with that person.

For example, a claims adjuster may not pay a firefighter, a building contractor, a restoration contractor, or any
other person in exchange for client referrals

7. Claims adjusters must not pay or promise to pay any remuneration, compensation or benefit in order to have
their professional services retained, except as provided by the Act or its regulations.

A claims adjuster may not pay money or any other advantage to a person for the purpose of recruiting clients
or obtaining new mandates.

For example, he cannot offer a client a discount, a rebate or a gift (hockey tickets, cigars, etc.) in order to
obtain a new claims file.

However, this section does allow claims adjusters to pay for advertising or a promotional campaign in order to
build their clientele.

8. Claims adjusters must not accept, other than the remuneration or compensation to which they are entitled,
any benefit relating to their professional activities, except where permitted by law.

This prohibition should be broadly interpreted. Aside from his fees or his commission, a claims adjuster is not
entitled to accept money, gifts or other benefits for his services.

For example, a claims adjuster may not accept commission from a restoration contractor for having been referred
to a claimant. A claims adjuster is considered to have accepted a benefit if he buys at less than its actual value a
vehicle that was recovered after the insured received compensation.

6
 SECTION 9 – SECTION 11(1)

9. Claims adjusters must avoid placing themselves, directly or indirectly, in a situation of conflict of interest. Without
limiting the generality of the foregoing, a claims adjuster would be in a situation of conflict of interest where:

1˚ the interests involved are such that the claims adjuster may tend to favour certain interests over those of
the client, or the claims adjuster’s judgment and loyalty towards the client may be adversely affected; or

2˚ the claims adjuster obtains a current or future personal benefit, directly or indirectly, for a particular act.

The rule regarding the absence of conflict of interest is a fundamental rule of professional ethics.

This section does not spell out all situations where a claims adjuster could be considered to be in a conflict
of interest. Paragraphs 1 and 2 are simply two examples of what constitutes a conflict of interest. When a
professional puts his knowledge and skills to work for a client, he is creating a relationship based on trust.
The duty to settle a claim fairly must be performed without any of the professional’s personal considerations
coming into play. The claims adjuster’s duty is to settle the claim by establishing a fair and reasonable
assessment of the losses based on the provisions of the insurance contract. He must do this without
receiving anything more than his remuneration.

A claims adjuster must never have an interest in the settlement of a claim. Moreover, a claims adjuster should
develop his own personal “early warning system” that alerts him to potential conflicts between his own inter-
ests and those of the insured, the claimant, the supplier of goods or services or the insurer. The conflict need
not necessarily actually exist; the appearance or the potential for a conflict of interest must also be avoided.

For example, a claims adjuster cannot accept a mandate to settle a claim for a building that he owns or may
potentially own in the future, even if he declares his interest to the insurer. Furthermore, a claims adjuster
must not curry favour with his mandatary (the insurer) by always attempting to settle the claim for an
amount lower than that which the insured is entitled to receive.

See section 27 of this Code.

Lastly, it is common practice in the field of claims adjustment to avoid settling the claims of friends or family
members, to avoid the temptation of putting their interests first.

10. Claims adjusters must not neglect professional duties relating to their professional activities and must carry
out such duties with integrity.

A claims adjuster must never neglect his overall professional duties and obligations. He must perform his daily
work as a claims adjuster with integrity and care. Two concepts are paramount: the absence of negligence and
the duty to act with integrity.

Negligence is a lack of care, attention or accuracy in performing one’s obligations. Incomplete notes in the file,
unreturned phone calls, neglecting to take the necessary steps to obtain an evaluation of the cause of the loss
are all signs of negligence. Every professional act performed by a representative — no matter how minor —
must be taken seriously.

Integrity means that the claims adjuster must scrupulously and honestly fulfill his professional obligations, in
other words, in the same manner as anyone would be entitled to expect of any conscientious professional. The
notions underlying this duty are rigour and honourableness.

11. Claims adjusters must not:

1˚ have a personal interest in the settlement of a claim;

This prohibition is even stricter than the one stipulated in section 9 of the Code, since, regardless of whether
or not there is a conflict of interest or the appearance of such a conflict, the simple fact of having an interest
constitutes a breach of the Code.

7
SECTION 11(2) – SECTION 12

2˚ derive or seek to derive personal benefit from a matter entrusted to them, other than their remuneration;

For example, in a claims file that he or someone in his office is handling, he cannot purchase damaged
property for himself or a third party or resell such property.

3˚ ask anyone, except a client or client’s representatives, to inform them of an event giving rise to a claim;

This section goes to the heart of how one obtains a mandate. The section is not aimed at preventing a claims
adjuster from staying abreast of current events. Rather, it is meant to prevent excessive solicitation of clients;
such behaviour would adversely affect the honour and dignity of the profession.

Just as it would be unprofessional of a lawyer to ask an ambulance attendant for the names of the injured in
the event of an accident, it is equally unacceptable for a claims adjuster to ask a firefighter, for example, to
notify him when a fire has occurred.

4˚ obtain or attempt to obtain details concerning an insurance policy from any person other than a client or
client’s representatives, with a view to having the settlement of claim entrusted to them;

According to the same principles set out in paragraph 3 of this section, a claims adjuster is prohibited from
asking a claimant for details of his insurance policy, unless the claimant has given him a mandate.

This also applies to requests made to the claimant’s insurer or any other person who might have such
information.

See also sections 30 and 49 of the Code.

5˚ advise an insured, a claimant, a client or a third party against consulting another representative or
another person of their choice.

This section concerns the client’s freedom to consult anyone he wishes to concerning damage insurance and
claims adjustment and specifically, his right to seek a second opinion. This section is all the more important
because a claims adjuster is often asked to express an opinion and give it to his client when determining the
amount of damages, for example.

Depending upon the specific circumstances of a file, the claims adjuster can even encourage a party to consult
someone else (another claims adjuster, a lawyer, an evaluator, etc.) in order to be sufficiently informed at all
times.

DIVISION II

DUTIES AND OBLIGATIONS TOWARDS THE PUBLIC

12. Claims adjusters must support any measure designed to protect the public.

A claims adjuster must be receptive to any measure designed to protect the public. He is expected to adopt,
understand and be able to explain any measure meant to protect the public.

This section refers not only to the adjuster’s client, but also to the public in general, in other words, anyone who
may need general information on damage insurance and claims adjustment.

8
 SECTION 13 – SECTION 16

13. Claims adjusters must support any measure likely to improve the quality of services in their field of
professional activities.

Since the public’s trust in the profession is at stake, one of the rules of conduct for claims adjusters is that
they must constantly seek to improve their skills and the services they provide.

For example, a claims adjuster must participate in training, as stipulated in the Regulation respecting
compulsory professional development. He must also cooperate in good faith with professional inspections
and comply with the syndic’s requests for corrective measures or undertakings.

Participating in Chambre activities, sitting on committees or being available to give training are also ways to
improve the quality of services offered to the public.

Furthermore, claims adjusters should make it a point to regularly read relevant articles appearing in the
ChADPresse or in industry publications.

14. Claims adjusters must promote measures to provide education and information in their field of professional
activities.

This section encourages claims adjusters to be proactive and anticipate the consumer’s information needs.
For example, claims adjusters should give consumers clear, comprehensive answers to questions concerning
damage insurance and claims adjustment. They can also supply consumers with information brochures
provided by insurers, the Chambre de l’assurance de dommages, the Autorité des marchés financiers, the
Insurance Bureau of Canada, etc.

15. The conduct of claims adjusters must be characterized by objectivity, discretion, moderation and dignity.

In their actions, as well as in their oral and written communication, claims adjusters must display restraint.
They should maintain a neutral tone, an open-minded attitude and conduct themselves in a generally friendly
manner conducive to good interpersonal relations. They should not express themselves in an angry, insulting
or disrespectful manner.

Due to the nature of his activities, claims adjusters must sometimes deal with individuals who are dissatisfied,
anxious or even in a state of crisis. They must make an effort to conduct themselves politely and respectfully,
even under such difficult circumstances.

16. No claims adjuster may, in any manner whatsoever, make any representations that are false, misleading or
likely to be misleading.

The section deals with the general principle that prohibits misleading the public. Claims adjusters must be
frank and sincere with everyone at all times.

See also sections 20, 48, 51 and 58(5) of the Code and section 14 of the Regulation respecting the pursuit of
activities as a representative.

When a claims adjuster makes “representations that are false” this means that he has intentionally lied and
said things that he knows to be false.

A “representation that is misleading or liable to be misleading” is a statement that hides part of the truth or
omits certain important facts or that, while not necessarily false, could lead someone to draw false conclusions.

9
SECTION 17 – SECTION 20

17. In their professional activities, claims adjusters must identify themselves clearly and, where applicable,
identify their client. Claims adjusters must show their certificate upon request.

In the course of his investigation, a claims adjuster may be required to visit the site of the loss and meet with
a number of parties. In addition to the claimant, those parties must be informed that he is the claims adjuster
and that he is acting for a specific company or person.

It is essential that the claimant know the identity of the insurer in order to take legal proceedings, as stipulat-
ed in article 2501 of the Civil Code of Quebec. The claims adjuster must identify his client, even if the insurer
instructs him not to do so.

In addition, a claims adjuster mandated by an insurer must remember that under section 47 of the Act, he is
obliged to inform the claimant that he is acting on behalf of an insurer.

18. Claims adjusters must notify an insured of the approach of a prescription date concerning the insured.

Prescription extinguishes the obligations of the insurer towards the insured. Given the importance of
prescription, the claims adjuster has the duty to inform the insured concerning when a claim is time-barred,
regardless of whether he is mandated by the insurer or the claimant.

The word “approach” (indicating that something is about to happen) must be interpreted broadly. It does not
mean that the claims adjuster must notify the insured of the prescription date as soon as a claim is filed but
neither should he notify the claimant on the eve of the prescription date, for instance, two weeks before the
deadline would not be reasonable notification.

The claims adjuster should notify the insured in a timely manner. For example, he should notify the insured in
writing of the prescription date when it is taking an unusually long time to settle the file.

19. Claims adjusters must notify the parties involved, as well as any person that they know has an interest in the
compensation requested, of any refusals or any measures that the insurer intends to take regarding a claim.

This section deals with the claims adjuster’s duty to inform, which in this case applies not only to the insured,
but to any person with an interest in the compensation, such as another insured, an insurer, a creditor, a tenant,
a co-owner, a third-party claimant, etc.

An insured has the right to know how his claim is being handled and it is the duty of the claims adjuster to
inform him. This is the case, for example, if the insurer refuses a claim, but it also applies if the insurer takes
certain measures such as carrying out an investigation without prejudice. In such a case, the claims adjuster
must inform the insured by asking him to sign a “non-waiver agreement”.

The duty to provide information should not be confused with the obligation to make full disclosure to all
parties involved. Accordingly, though the claims adjuster must notify a third party that the insurer has refused
the claim, he does not have to reveal the reason for the refusal to pay compensation. Only the insured has the
right to know why the insurer refused to compensate him.

20. Claims adjusters must act in a manner that does not mislead or abuse the good faith of the parties involved.

In carrying out his professional activities, a claims adjuster must act with candour and rectitude. He must not
seek to deceive or exploit others.

10
 SECTION 20 – SECTION 23

No matter whose file a claims adjuster is working on, this obligation applies to all parties involved: the insured,
the claimant, the person responsible for the loss or any other person who has an interest in the compensation
arising from the loss.

See also sections 16, 48, 51 and 58(5) of the Code.

21. Claims adjusters must provide the insured with the explanations necessary for them to understand the
settlement of the claim and services rendered to them.

Throughout his mandate, a claims adjuster must explain to the insured all the “whys and wherefores” related
to the settlement of the claim. Though this obligation is especially important at the beginning of the file,
when the insured is generally more vulnerable, it lasts until the claim has been settled.

A claims adjuster must explain to the insured the services he has rendered or will render to the insured:

• the measures that he intends to take regarding damaged property once the insured has given his consent;
• the emergency measures that must be taken;
• identification of the persons that have been hired to carry out the emergency measures;
• authorization to purchase replacement property;
• the taking of statements;
• the delays involved in the settlement;
• the granting of living expenses or business interruption expenses, etc.

The claims adjuster must also explain to the insured how he calculated the amount of the settlement (basis
for calculation, methods for calculating depreciation, etc.).

The explanations given to the insured should allow the insured to understand how his claim is proceeding. It is
the claims adjuster’s duty to ensure that the explanations he provides are properly understood.

22. Claims adjusters must respect the confidentiality of all personal information obtained about a client and
use the information for the purposes for which it was obtained, unless relieved of that obligation by a provision
of a law or an order of a competent court.

23. Claims adjusters must not disclose, other than in accordance with the law, personal or confidential
information obtained nor use such information to the detriment of one of the parties involved or with a
view to obtaining a benefit for themselves or another person.

Pursuant to the Act and the above two sections (22 and 23) of the Code, claims adjusters must respect the
confidentiality of the personal information that they collect and hold. This obligation lasts as long as they
have such information, even if the mandate has ended.

An individual always owns information pertaining to him. This applies to the insured, the claimant, witnesses,
etc. When they disclose such information to the claims adjuster, he becomes its depositary and custodian.
The claims adjuster must therefore obtain the person’s consent before transmitting or using his personal
information. On its website (www.chad.ca), the Chambre de l’assurance de dommages provides claims
adjusters with a procedure and a consent form that they can use in such circumstances when settling a claim.

In certain situations provided for in the Act, a claims adjuster need not ask for the insured’s permission
before disclosing his personal information to another person. For example, if the Chamber’s syndic is
investigating a file, he may ask for and obtain such information without the insured’s consent. Similarly,
in certain circumstances, a court may allow a claims adjuster to testify regarding an insured’s personal
information.

11
SECTION 24 – SECTION 26

24. Claims adjusters must not accept or continue a mandate if it involves or may involve disclosing or using
confidential information or documents obtained from another claimant, unless that claimant consents thereto.

This section refers not only to duty to respect of personal information, but also to the rule concerning the
avoidance of conflicts of interest. Unless he has received the claimant’s written consent, a claims adjuster may
not accept a new mandate if he realizes that in performing the new mandate, he may have to use personal
information given to him by the claimant.

In such circumstances, the form available on the ChAD’s website (www.chad.ca) may not be used to obtain
the insured’s consent, because it applies only regarding the use of an individual’s personal information in the
claims adjuster’s file and not someone else’s file.

25. Claims adjusters must avoid any misrepresentations as to their level of competence or the effectiveness of
their services or those of their firm or independent partnership.

A claims adjuster must know the limits of his skills, knowledge and experience. He must not exaggerate the
value of his work or that of the colleagues in his firm or independent partnership. Furthermore, he must not
promise his clients results that he knows he cannot deliver.

For example, a claims adjuster must not lead an insured to believe that if he does not retain the adjuster’s
services, he will not receive all the compensation to which he is entitled, nor may the adjuster advertise that
can obtain greater compensation than that to which he knows the claimant is entitled.

In addition, the claims adjuster may not lead his client to believe that he has the competence required to
undertake a particular mandate demanding competence or expertise that he does not possess. This could be
the case, for example, in a complex file dealing with soil contamination, damage to a work of art or a fire in
a factory.

DIVISION III

DUTIES AND OBLIGATIONS TOWARDS CLIENTS

26. Before accepting a mandate, claims adjusters must take into account the limits of their abilities and
knowledge and the means available to them. They must not undertake or continue a mandate for which they
are not sufficiently prepared, without obtaining the necessary assistance.

No matter whom he acts for, a claims adjuster must make sure that he has the necessary ability to effectively
deal with the file. Certain types of losses require specific expertise to properly investigate the nature of the
claim or assess the losses incurred. In fact, it is common practice for a new claims adjuster to have his work
supervised by an experienced claims adjuster.

A claims adjuster should be modest in assessing his own professional skills. When in doubt, he must seek help
from qualified claims adjusters, in other words, colleagues who have the requisite skills. If this is impossible, he
should not accept the file. Note that this obligation persists for the life of the mandate.

In order to do his job properly, a claims adjuster must often use the professional services of engineers,
architects, chemists, accountants, forensic accountants, lawyers, actuaries or other professionals. However,
using such services does not exempt the claims adjuster from the obligation stipulated in this section.

This section does not prohibit a claims adjuster from taking on a new type of file, for instance, his first
professional liability case. However, if the claims adjuster does not have the necessary experience he should
seek the assistance of an experienced claims adjuster. Furthermore, a claims adjuster cannot rely upon this
section to refuse to take on a file that his employer has assigned to him provided that he is given the
appropriate assistance.

12
 SECTION 27 – SECTION 30

27. Claims adjusters must act promptly, honestly and fairly in providing their professional services under the
mandates entrusted to them.

The obligations in this section are the basis of a claims adjuster’s work. In all his mandates and respecting all
the parties involved, a claims adjuster must act expeditiously and honestly while respecting the rights each
party. He is expected to apply all the provisions of the insurance contract objectively, diligently and effectively.

It is important to stress the concept of fairness. Acting fairly is a concept that is specific to claims adjusters
and is not mentioned at all regarding other damage insurance professionals. Even though one party mandates
him — often the insurer — the claims adjuster must be fair to the other party.

For example, when settling a claim that is covered under a home insurance policy, it would be unfair to impose
a condition on the insured that is not in the contract, such as requiring the insured to have finished the repairs
before any amount of compensation is paid out.

28. Claims adjusters may not be the mandatary of both the insurer and the insured at the same time.

This rule cannot be ignored and further clarifies the more general rule concerning avoiding of conflicts of
interest (section 9 of the Code). It should be noted that, contrary to section 29 of the Code, the consent of
both parties would still not allow the claims adjuster to contravene this rule.

29. Claims adjusters may not represent opposing interests, except with the consent of their clients.

This section is one of the rare exceptions to the conflicts of interest rule (section 9 of the Code). A claims
adjuster may act for persons or companies with opposing interests as long as they are all aware of this and
they give their consent. Examples of such a situation are a tenant and his landlord, a co-owner and his
condominium corporation or an insured and a third-party claimant.

Holding a dual mandate is, in and of itself, a tricky situation, especially if the clients have opposing interests.
Some aspects of a claims adjuster’s work do not generally lead to a conflict of interest such as fact gathering,
assessments of losses and investigating the objective causes of the claim, etc. However, other situations are
trickier—for instance, giving an opinion on or interpreting the facts, especially if one of the parties involved
has had to disclose confidential information to the claims adjuster. Moreover, if the parties’ versions do not
coincide and the claims adjuster must give his opinion on issues of liability or admissibility, the conflict can
become insurmountable.

Even though it may make more economic sense for the persons involved to use the services of a single claims
adjuster, if an insurmountable conflict occurs between the parties, the claims adjuster will no longer be able
to continue representing them. He will have to completely withdraw from the case in order to avoid any
semblance of a conflict of interest or lack of fairness.

30. Claims adjusters must not under any circumstances undertake appraisal work before receiving a mandate to
that effect.

This rule is designed to prevent a claims adjuster from taking on a file before he has received a mandate to
do so. Obviously, the goal is to protect the public since in the hours immediately following the incident, the
claimant is often shaky and upset by events.

A claims adjuster mandated by the claimant must have the mandate in writing before acting for the client and
undertaking emergency measures. Section 50 of the Act stipulates that the claimant may cancel the contract
in writing within ten days of receiving it. In such a case, the claims adjuster is entitled to claim from the claim-
ant the expenses incurred to prevent further loss.

13
SECTION 31 – SECTION 34

31. Claims adjusters must notify the client promptly of any information in their possession that could affect
decisions regarding the settlement of a claim or reduce or compromise an entitlement to compensation, such as
breaches of contract, fraud, misrepresentations and the forging of evidence.

It is the claims adjuster’s duty to provide information regarding the factors that could influence the settlement
of the claim. To ensure that the client who has retained his services is aware of the overall situation and can
make an informed decision, the claims adjuster must disclose all the information concerning the situation.

Such information may include facts, doubts or indications of breaches of the insurance contract’s conditions of
coverage, questions regarding the very existence of an item or concerns about the cause or the circumstances
surrounding the loss, etc.

32. Claims adjusters must, without delay, act on the instructions received from a client or notify the client that
they are unable to comply with them.

When a claims adjuster accepts a mandate, he must of course follow the instructions of the person who has
retained his services. If this is impossible, the claims adjuster must notify that person as soon as possible.

A number of factors make may it impossible to follow these instructions. Some factors may be of a purely
practical nature: the claims adjuster has had an accident; the site of the loss has become inaccessible; etc.
Other factors may be legal in nature: an issue related to ability or knowledge (section 26 of the Code); a legal
impediment; instructions that violate the Code (section 17 of the Code); a conflict of interest (section 9 of the
Code); and so forth.

It is important to take note of the words “as soon as possible”. They set the tone for the relationship between
the claims adjuster and the person who has engaged his services. That person must be notified quickly in the
event that his requests cannot be carried out so that he can act in full knowledge.

33. Claims adjusters must, upon request, report to the client and show diligence in submitting reports, rendering
accounts and making remittances.

It is common practice for a claims adjuster to report to his insurer-clients every 30 or 60 days, depending
on his level of authority or his agreement with them. Although common practice does not dictate a specific
timeline for reporting, a claims adjuster mandated by an insured should establish such a timeline with the
client. He must also keep in mind the obligations under article 2139 of the Civil Code of Quebec, which
stipulate that the mandatary must inform his client of the stage reached in the performance of the mandate,
where circumstances warrant doing so.

Despite common practice, as soon as the client requests an update on his claims file, the claims adjuster must
promptly provide him with the information.

The best way for a claims adjuster to show diligence in submitting reports is to stay one step ahead of the
client’s wishes and report to him before he has even asked for anything. He thus demonstrates his know-how
and his high level of attention to the client’s needs.

34. Claims adjusters must submit every offer of settlement to the client.

This rule applies to all offers without exception. Even if the offer seems unacceptable, it must be submitted to
the person who has engaged the claim’s adjuster’s services. That person is the only one entitled to accept or
refuse it. Of course, the person is perfectly within his rights to ask the claims adjuster for his opinion on the
offer that has been submitted.

Thus, a claims adjuster who has been mandated by a claimant must submit to his client any offer made to him
by the insurer, whereas a claims adjuster mandated by an insurer must submit to the insurer any offer made
by the insured.

14
 SECTION 35 – SECTION 38

35. In carrying out a mandate, claims adjusters must avoid multiplying professional acts.

The claims adjuster must do whatever is useful and necessary to complete his work. He must avoid taking
any steps that simply “pad the bill” or unnecessarily slow down the settlement of the claim.

For example, a claims adjuster must not repeatedly request further assessments of damages without
ultimately making a decision.

36. Claims adjusters may, for good and reasonable cause, cease to act on behalf of a client after taking the
necessary measures to prevent prejudice to the client.

A claims adjuster who accepts a mandate must carry it out in its entirety unless he has just and reasonable
cause for not doing so. In such a case, the claims adjuster must notify his client so that the client can make
arrangements for his claim to be settled properly. He must notify his client in advance and not after the fact.

When he ceases to act for a client, the claims adjuster must send that client all the information that he
collected while working on the claims settlement file.

Even in situations where the claims adjuster is justified in ending his mandate immediately because he is in a
conflict of interest situation or because he has had an accident, he must notify his client that the mandate has
been terminated and make the necessary arrangements to protect the client from any adverse consequences
until another claims adjuster takes over the mandate.

In addition to this section, claims adjusters should refer to articles 2175 through 2185 of the Civil Code of
Quebec that deal with the termination of a mandate.

37. Claims adjusters must cease to represent a client if their mandate is revoked.

When a claims adjuster is instructed by someone to cease representing him, he must accept these instructions.
After making arrangements for a smooth transition, he must immediately withdraw from the file.

The claims adjuster must then inform the insured that he is no longer in charge of settling his claim. Failure
to do is an ethical breach.

See also section 58(12) of the Code.

38. Claims adjusters must not, through fraud, trickery or other deceitful means, avoid or attempt to avoid
their professional civil liability or that of the firm or independent partnership within which they carry on their
professional activities.

To err is human. Any professional can make a mistake. When a claims adjuster makes a mistake that could
have repercussions, he must not attempt to hide it. He must not attempt to avoid the consequences of his
acts by using:

• fraud (an action done in bad faith that is meant to cause harm);
• trickery (calculated deceit);
• other deceitful means (deceit intended to make a person act against his own best interests).

A claims adjuster must be honest and transparent regarding his mistakes. For example, he must not try to hide
a document that proves he was mistaken. When he makes a mistake that he could be held accountable for in
the future, he must also promptly notify his professional liability (errors and omissions) insurer. This way, the
public will be protected from the possible consequences of his mistake.

15
SECTION 39 – SECTION 41

39. Claims adjusters who have been given a mandate must not require advances that are disproportionate to
the nature and circumstances of the claim and the state of the parties. In addition, they must charge fair and
reasonable remuneration, justified by the circumstances and proportionate to the services rendered. In setting
remuneration, claims adjusters must take particular account of the following factors:

1˚ their experience;
2˚ the time devoted to the matter;
3˚ the difficulty of the problem submitted;
4˚ the importance of the matter;
5˚ the responsibility assumed;
6˚ the provision of unusual services or services requiring exceptional competence of speed; and
7˚ the result obtained.

Under section 48 of the Act, a claims adjuster who is mandated by a claimant must offer him two payment
options: either hourly remuneration or percentage remuneration.

The seven criteria listed in this section are the factors taken into consideration when assessing the fair value of
a professional service. If his invoice is queried, the claims adjuster must be able to show the factors he used in
calculating that service.

A claims adjuster should not ask for an advance except under exceptional circumstances and if reasonable in
the circumstances. An example of exceptional circumstances would be the travel costs incurred by a claims
adjuster in assessing damages to a cottage in an area accessible only by helicopter.

Furthermore, since an advance is paid for services not yet rendered, it is not regarded as belonging to the
claims adjuster and must be deposited in a separate account.

40. Claims adjusters must ensure that a client is informed of the approximate and foreseeable cost for their
services.

A claims adjuster must provide the person who has retained his services with an estimate of how much his
services will cost. This obligation to inform lasts for the duration of the mandate

Thus, as soon as the mandate begins, the claims adjuster paid on an hourly basis must provide his client with
an estimate of the number of hours that will be required to fully carry out his mandate. If, during the course
of the mandate, he realizes that he will have to put in more hours than anticipated, he must immediately
notify his client. The client must confirm that he accepts this increase before the claims adjuster can incur any
further costs.

41. Claims adjusters who have entered into a contract with a client providing for hourly remuneration must pro-
vide all explanations necessary for the client to understand the statement of remuneration and the terms and
conditions of payment.

The billing of a claims adjuster paid on an hourly basis must include a detailed breakdown of services rendered,
showing the time required for each separate act. An invoice that fails to indicate the number of hours spent
carrying out the mandate does not comply with the requirements of this section. Also, the terms of payment
must appear on the invoice for professional fees.

It should be noted that whatever their mode of remuneration, all claims adjusters must keep a log. For claims
adjusters paid by the hour, this log is also used for billing. However, a log is useful not only to determine the
billing for services rendered, but is part of the adjuster’s professional obligation to act with professionalism
(section 16 of the Act) and to keep proper files (sections 10 and 58(1) of the Code.

16
 SECTION 42 – SECTION 45

42. Claims adjusters may not charge interest on overdue accounts unless they have an agreement to that effect
with the client. If there is such an agreement, the interest must be charged at a reasonable rate, which does not
exceed the rate determined pursuant to section 28 of the Act respecting the Ministère du Revenu (R.S.Q., c. M-31).

As a general rule, a claims adjuster cannot charge interest on overdue accounts. An exception is made when
the claims adjuster reaches agreement with his client regarding interest payments when the contract is signed.

The rate of interest charged on a claims adjuster’s overdue accounts may not exceed the rate set by the
Ministère du Revenu du Québec. This rate is set four times a year (January, April, July and October) and is
available on the Revenu Québec website.

43. Upon completion of their mandate, claims adjusters must repay any part of an advance on their remuneration
for which no work was performed.

In a professional context, an “advance” is a deposit made by the client and is used to cover the professional’s
costs, disbursements and fees charged in relation to the file. Until such time as the bill for services (invoice) is
not issued and accepted by the client, the advance has not been earned.

See also section 39 of the Code.

If a claims adjuster receives an advance, it must be deposited in a separate account. He cannot withdraw any
money from this account until one or more invoices for amounts corresponding to the advance(s) have been
submitted and accepted. Once the mandate has been completed, any money that the claims adjuster has not
used remaining in the account must be returned to the client.

DIVISION IV

DUTIES AND OBLIGATIONS TOWARDS THE CLAIMANT

44. Claims adjusters must not withhold a claimant’s money, securities, documents or property unless permitted
under a legislative or regulatory provision.

Practically speaking, a claims adjuster is not considered the custodian of property belonging to others. If, in a
specific situation, he is asked to play this role, he cannot then hold onto property that does not belong to him
to put pressure on someone or for any other reason.

For example, a claims adjuster cannot hold onto photos belonging to insured until the insured agrees to the
final settlement of his claim. Nor can he hold onto a compensation cheque because the insured has not paid
him his fees. Furthermore, he cannot wait until bodily injury claims are settled before taking care of settling
property damages.

45. Claims adjusters must take reasonable care of property entrusted to their care during their mandate.

As indicated above, the basic rule is that a claims adjuster is not the custodian of someone else’s property.

However, when a claims adjuster does act as the custodian of property belonging to others, it is his legal duty
to act with prudence and diligence. He must not abandon such property, use it or decide what to do with it
without the owner’s permission.

For example, if the claims adjuster holds the keys to a damaged building, he cannot enter it or allow anyone
else to enter without the consent of the owner -insured, except in an emergency. Nor is the claims adjuster
allowed to remove property and give it to a third party for restoration without the insured’s permission.

17
SECTION 46 – SECTION 48

46. Claims adjusters must not borrow from a claimant sums of money they have collected for the claimant.
Claims adjusters must not endorse a cheque made out to a claimant or to a client unless authorized by the
claimant or client and provided that the cheque is endorsed for deposit only into a separate account.

A claims adjuster is never entitled to borrow from an insured or from a claimant by “dipping into” the
insurance compensation money. Moreover, the claims adjuster should avoid borrowing money from any
source whatsoever from the claimant as it could risk putting him into a conflict of interest situation.

The claims adjuster requires written authorization from the claimant allowing him to cash a cheque.
Furthermore, even with such authorization, the funds must be deposited in the separate account. The claims
adjuster must promptly remit moneys owing to other beneficiaries and parties whom the insurer wishes to
pay from the proceeds of the cheque. Only when the claimant has accepted his invoice can the claims adjuster
then pay himself his own fees from the separate account and deposit that amount in his operating account.

For example, the mandate between a claimant and a claims adjuster must specifically provide for the claims
adjuster’s right to endorse and cash a compensation cheque. In the absence of a written agreement to this
effect, the compensation cheque cannot be made out to the claims adjuster.

See also section 58(16) of the Code.

DIVISION V

DUTIES AND OBLIGATIONS TOWARDS INSURERS

47. Claims adjusters must notify the insurer of any ties or interests third parties may have in property that is the
subject of a claim.

Rather than using the term “ties”, in civil law, it is more appropriate to use the term “movable and immovable
real rights” For the most part, we are dealing here with hypothecs or other rights that individuals or companies
may hold in property that is the subject of a claim. A “right of user” or a “declaration of family residence” are
two examples that come to mind. The term “interests” is broad and may go beyond a simple financial interest.
For example, if the damaged building has been classified as a heritage building, the claims adjuster must also
flag this fact.

The claims adjuster must obtain and send to the insurer the list of rights registered against a property. He can
verify these rights by consulting the Register of personal and movable real rights (French acronym: RDPRM).
For information concerning rights in buildings and land, go to an office of the Bureau de la publicité des droits
(BPD). There are BPDs throughout Quebec.

48. Claims adjusters must not mislead an insurer, abuse its good faith or use unfair practices in their dealings
with the insurer.

The general principal to remember here is that claims adjusters are prohibited from deceiving the insurer.

This section refers back to sections 16 and 20 of the Code and the duty to act in good faith, honestly and
truthfully — but this time towards insurers. The claims adjuster must be loyal and act with rectitude.

For example, he must not hide important facts from the insurer or disseminate incorrect or incomplete
information regarding the insurer or information that could lead the public to lose confidence in the insurer.

See also sections 51 and 58(5) of the Code.

18
 SECTION 49 – SECTION 52

49. Claims adjusters must not misrepresent to an insurer that they are responsible for settling a claim.

The claims adjuster must have a mandate to act. He cannot intervene with a claimant, an insured or an insurer
before receiving the authorization to act.

See also section 30 of the Code.

DIVISION VI

DUTIES AND OBLIGATIONS TOWARDS REPRESENTATIVES

The duties and obligations that follow apply respecting all representatives contemplated by sections 1 to 11
of the Act.

50. Claims adjusters must not denigrate, depreciate or discredit other representatives.

The credibility of the profession is important to the public. By implying that a fellow representative is
incompetent or makes negative comments about him, the claims adjuster could adversely affect the
public’s trust in the profession in addition to damaging the relationship of trust that exists between the
professional and his clients.

For example, if a claims adjuster queries the competence or actions of another representative (such as another
claims adjuster) in front of a client, is in breach of this section.

51. Claims adjusters must not mislead other representatives, abuse their good faith or use unfair practices in
their dealings with them.

In the course of his work, a claims adjuster often deals with claims adjusters representing other individuals.
The claims adjuster must act fairly towards his colleagues. He may not mislead them. Since all claims adjusters
must comply with this section, a claims adjuster is entitled to expect that a colleague act towards him in a
manner that complies with his professional obligations, in particular the duty to act fairly and honestly.

“Abuse their good faith” means trying to take advantage of another representative. “Unfair practices” refers to
using systems or procedures developed in bad faith to achieve one’s goals.

Contrary to the old saying, when it comes to professional ethics, the end does not justify the means.

See also sections 16, 20, 48 and 58(5) of the Code.

52. Claims adjusters must collaborate with other representatives insofar as they cause no prejudice to their
client or to the parties involved in a claim.

While the claims adjuster’s first duty is to his client, he also has a duty to collaborate with other claims
adjusters involved in the claim so that they too may know the truth. Of course, in so collaborating, the claims
adjuster may not adversely affect his clients or the parties involved in the claim.

For example, a claims adjuster cannot ignore a request from a colleague concerning one of his files. He must
respond, even though his response may be that his client has prohibited him from answering, if this is indeed
the case.

19
SECTION 53 – SECTION 56

53. Claims adjusters must not bring a malicious complaint or make a malicious accusation against other
representatives.

Once again, the purpose of this section is to maintain the public’s trust in the profession by preventing a
claims adjuster from lodging unfounded complaints whose sole purpose is to harm a colleague.

A malicious complaint is a complaint made out of spite, revenge, calculation, etc. in order to harm another
claims adjuster or representative. If, in the course of his investigation, the syndic reaches the conclusion that a
complaint is malicious, he could turn around and lodge a complaint against the claims adjuster who made the
original complaint and investigate him for having breached this section of the Code.

DIVISION VII

DUTIES AND OBLIGATIONS TOWARDS THE AUTORITÉ DES MARCHÉS FINANCIERS

AND THE CHAMBRE DE L’ASSURANCE DE DOMMAGES
54. Claims adjusters must answer without delay any correspondence from the syndic, the co-syndic or an
assistant to the syndic of the Chamber in the performance of the duties devolved upon them by the Act
respecting the distribution of financial products and services and its regulations.

The role of the syndic is to investigate any information indicating that a claims adjuster may have violated
the Act or its regulations, the ultimate purpose being to protect the public. The syndic and his assistants are
the custodians of good professional practice. The golden rule dictates full cooperation with them.

When a member of the syndic’s office contacts a claims adjuster, the adjuster must respond immediately,
whether or not he is personally the subject of the complaint. The “right to remain silent” does not apply in
this context. If a claims adjuster simply does not respond — even he has done nothing wrong — he has
nevertheless committed a breach of the Code that could result in the filing of a disciplinary complaint.

55. Claims adjusters must attend any meeting as required by the syndic, the co-syndic, an assistant to the syndic
or a member of their personnel.

The syndic and his assistants have broad investigative powers that include the right to summon a claims
adjuster to attend a meeting during the course of an investigation. The claims adjuster must attend the
meeting.

For the syndic’s powers, see also sections 327 and following of the Act.

56. Claims adjusters must not, directly or indirectly, obstruct the work of the Autorité des marchés financiers,
the Chamber or one of its committees, the syndic, the co-syndic, an assistant to the syndic or a member of their
personnel.

The claims adjuster must not prevent the Autorité, the Chamber or one of its committees, the syndic or any
of his staff from carrying out the work that they are authorized to do under the Act.

A claims adjuster must act in complete good faith and voluntarily provide any information that could help
those persons and organizations to ascertain the truth. A few examples of obstructing their work include:
misdirecting them, hiding documents or denying them access to the workplace.

20
 SECTION 57 – SECTION 58(2)

57. Claims adjusters who have been informed that they are the subject of an inquiry or a complaint must not
communicate with the complainant or the person who requested the holding of the inquiry, unless required to
do so in the performance of their mandate.

This section is designed to prevent a claims adjuster from interfering with the person who filed the complaint
against him, be it through blackmail, intimidation, or persistent demands. In particular, the purpose of this
section is to avoid the claims adjuster pressuring the person to withdraw his complaint, for example by
threatening to drag out his claim. Furthermore, even if the complainant withdraws his complaint, the syndic
may nevertheless decide to continue his investigation.

A distinction must be made between the prohibition against improper communication with a client in the
event of a complaint and ceasing to serve the client. Thus, although a client may have filed a complaint
against him, the claims adjuster must continue to serve his client with professionalism.

DIVISION VIII

BREACHES OF THE CODE OF ETHICS

58. Acts by claims adjusters that are contrary to the honour and dignity of the profession constitute a breach of
the Code of ethics, including:

This section refers to the claims adjuster’s obligation to protect, through his good conduct, the image of the
profession and the opinion that the public’s opinion of that image. It lists a number of situations where the
claims adjuster is regarded as having acted contrary to the honour and dignity of the profession. The honour
and dignity of the profession may be defined as its respectability.

The word “including” means that the list of breaches is not exhaustive. A complaint concerning acts that are
contrary to the honour and dignity of the profession could be lodged against a claims adjuster even if such
acts are not listed in this section.

1˚ carrying on their professional activities dishonestly or negligently;

Dishonesty refers to guilty intent: the claims adjuster knows that he is acting improperly. The fourth and
eleventh clauses are examples of dishonesty.

Negligence, on the other hand, refers to shoddy practices that stem from a lack of vigilance, care, attention or
accuracy in the performance of one’s professional activities. Sometimes it goes hand in hand with a careless
attitude, Examples of negligence include: failing to note in the client’s file any action that is taken, failing to
provide summaries of meetings and phone calls, failing to record mandates received and carried out, offers
and refusals of compensation, etc.

Furthermore, it would be negligent for a claims adjuster who has been sent to the site of a fire to immediately
state that the fire damage is covered by the policy when in fact, his investigation will reveal that the residence
had been vacant for the past four months—a violation of the contract’s conditions of coverage that would
result in the insurer refusing to provide compensation.

See also section 10 of the Code.

2˚ carrying on their professional activities under conditions or in situations likely to compromise the
quality of services;

A claims adjuster must always be in possession of all his faculties when at work. Any condition likely to
negatively affect the proper provision of professional services is therefore prohibited. Such conditions
include those brought on by substance use (alcohol, drugs, medications that cause mental confusion, etc.) or
illness (depression, burnout, etc.).

21
SECTION 58(2) – SECTION 58(6)

In order to protect the public, when a claims adjuster is not in full possession of his faculties, he must
temporarily cease to practice rather than continuing to work and running the risk of causing harm and
making mistakes.

An example of “conditions” that adversely affect the quality of service would be a claims adjuster who
practices in a cramped, badly insulated and ventilated office lacking a coherent filing system, and equipped
with computer and telephone systems that are so old and out-dated that they have a negative impact on
the quality of communications between the adjuster and his clients.

3˚ taking into account any intervention by a third party that could affect the performance of their
professional duties to the detriment of the client or the insured;

The claims adjuster must deal with the insured, the claimant and their respective mandataries. Throughout
his mandate, he must make sure to avoid allowing a third party to interfere with his client. Examples of such
interference include a parent who gets overly involved in his child’s automobile claim; a building owner who
intervenes in a claim his tenant made for theft and vandalism; or an insurer who asks a claims adjuster to
convince a claimant to delay making a claim for compensation that complies with the conditions of the
insurance contract.

A claims adjuster’s actions should never be guided by a third party. Third party intervention may create a
conflict of interest. The claims adjuster must obtain his instructions from his client and follow them

See also section 9 of the Code.

4˚ knowingly deriving benefit from perjury or false evidence;

Using evidence or testimony that one knows to be false is clearly a breach of the Code of Ethics.

5˚ knowingly making a statement that is false, misleading or likely to be misleading;

A claims adjuster must spontaneously and at all times speak the truth and make the truth known. He must
not intentionally omit information that could shed new light on the situation. This obligation protects not
only the client, the insured and the claimant, but also all everyone involved in the settlement of the claim.

This breach corresponds to non-compliance with the obligation in section 16 of the Code plus the fact that
the claims adjuster has knowingly made a false statement.

For example, a claims adjuster cannot intentionally make an incorrect report to the insurer regarding an
insured’s deposition.

See also sections 16, 20 and 25 of the Code.

6˚ participating in the preparation or preservation of evidence that they know is false;

This section prohibits the preparation or preservation of evidence that the claims adjuster knows to be
false. The expression “that they know to be false” implies guilty intent to make representations that do not
correspond to reality.

For example, a claims adjuster who, at the request of a claimant, pads the claim by adding non-existent
property is participating in the preparation of false evidence.

An example of preserving false evidence would be submitting invoices for the replacement of property when
the claims adjuster knows for a fact that the insured obtained false invoices for non-existent property.

22
 SECTION 58(7) – SECTION 58(10)

7˚ paying or offering to pay a witness compensation conditional on the content of the witness’s testimony
or on the outcome of a case;

In the same vein as the preceding paragraph, paying a person to testify in one’s favour is prohibited. Be careful!
It is important to distinguish between compensating a witness on the one hand, and on the other hand, giving
the witness a financial incentive to say what you would like him to say.

It is prohibited to offer a witness a bonus, a premium, a gift or another advantage to influence him or make
him change his statement. Testimony must be truthful: changing the outcome of a file by shaping someone’s
testimony is totally prohibited.

This prohibition should not be confused with the common practice of compensating a witness for his time in
testifying or paying an expert witness for his expert report.

See also section 6 of the Code.

8˚ unduly withholding, concealing, harbouring, falsifying, mutilating or destroying evidence, whether

directly or indirectly;

In addition to testimonies, objects found at the scene of a loss may also explain why the loss occurred.
Hiding an object that may be important to the settling of the claim is a breach of this section.

Furthermore, when a claims adjuster is responsible for keeping evidence until the case goes before the
courts, he must take all reasonable means within his power to make sure that the evidence is properly kept.
The public is entitled to expect that a claims adjuster will not mutilate any objects or documents in his
safekeeping.

Last but not least, a claims adjuster cannot refuse to give back to the insured the copy of the statement that
he made, read and signed. The insured is considered the owner of the information contained therein.

See also sections 44 and 45 of the Code.

9˚ suppressing evidence that they have or a client has a legal obligation to preserve, disclose or produce;

Intentionally hiding a piece of evidence is another violation of the Code. A piece of evidence is any statement,
fact, object or anything else that is relevant to settling the claim. The claims adjuster may not behave in such
a manner, nor may he encourage his client to do so.

10˚ concealing or knowingly withholding that which a legislative or regulatory provision requires them to
disclose;

Several acts contain provisions that require claims adjusters to disclose what they know. A claims adjuster may
never intentionally suppress this information.

For example, section 47 of the Act requires a claims adjuster to inform a claimant that he is acting for an
insurer.

Here is another example: section 9 of the Regulation respecting hazardous materials requires the claimant to
notify the Ministry of Sustainable Development, the Ministry of the Environment and Parks Quebec that soil
has been contaminated due to a fuel tank leak. The claims adjuster who advises his claimant to not mention
the leak is committing an offense.

11˚ advising or encouraging a client to commit an act that they know is illegal or fraudulent;

23
section 58(11) – section 58(14)

A claims adjuster must not knowingly be a party to an illegal act or intentionally encourage his client to
commit such an act.

For example, a claims adjuster is prohibited from advising a claimant to pad the declared value of his claim in
the wake of a loss or specifically recommending to an insurer that it refuse to pay compensation on a building
even if he knows that the insured made false statements concerning the building’s contents.

See article 2472 of the Civil Code of Quebec

12˚ not informing the client, the insured or the opposing party of any impediment to the continuation of
their mandate;

Many factors can result in an impediment to the continuation of a mandate, as seen in sections 36 and 37 of
the Code. In addition to notifying his client, the claims adjuster also has an obligation to inform all interested
parties when he is unable to continue his mandate.

For example, when a claims file is withdrawn and transferred to the insurer’s litigation department, the claims
adjuster who is acting for an insurer must notify the insured and the third party claimant that his mandate
has ended.

13˚ insistently or repeatedly urging a person to use their professional services;

The claims adjuster has the right to build and increase his clientele, but he must do so with moderation and
dignity, without exaggeration and in a balanced manner.

The claims adjuster must refrain from harassing a client, either through threats, deception or repeated calls
intended to convince the client that he should use the claims adjuster’s services.

In particular, a claims adjuster should not repeatedly visit someone who has had a fire and pressure that
person into signing a representation mandate.

14˚ carrying on their activities with persons not authorized by the Act or its regulations to carry on such
activities or using their services to do so;

Not only is a claims adjuster prohibited from involving persons not legally authorized to do so from
participating in his professional activities, but he could also be held liable for any actions carried out by
those person if they have performed such actions at his request.

This section covers all unauthorized persons, including claims adjusters who have been struck off the
membership roll, suspended or whose certificates have not been renewed. It is in the best interests of a
claims adjustment firm manager to verify that all the members of his team have valid practice certificates.

See also sections 2 to 8 of the Code.

On the other hand, a claims adjuster can surround himself with suppliers of specialized services and entrust
certain specific tasks to third parties. For further information on this topic, please read the ChAD’s Guide to the
sharing of roles and responsibilities between claims adjusters and services providers, available at www.chad.ca.

24
 SECTION 58(15) – SECTION 59

15˚ charging for professional services not rendered or falsely described;

This article reiterates the principles of honesty and integrity. It also refers to the fairness and reasonability of
fees charged as outlined in section 39 of the Code.

16˚ using or appropriating, for personal purposes, money or securities entrusted to them in their
performance of any mandate, whether the activities carried on by them are in the sector of claims
adjustment or in another sector governed by the Act.

A claims adjuster may be called upon to manage a sum of money on behalf of a third party, for example, when
he collects an advance from the insured or the insurer, or when he cashes compensation cheques that must be
paid in part out to a supplier. This money must go through the separate account, as stipulated in the second
paragraph of section 4 of the Regulation respecting the pursuit of activities as a representative.

It is important to remember that it is not his money. A claims adjuster must not succumb to the temptation
to borrow or use this money for his personal expenses. Obviously, he must not steal or appropriate any money.

The definition of appropriating is broad and refers to any sum of money or any property of value that he
may come in contact with during the carrying out of a mandate. Misappropriation of funds is one of the most
serious breaches of professional ethics. A claims adjuster found guilty of this offence is at the very least liable
to be temporarily struck from the membership roll by order of the discipline committee.

See also section 46 of the Code.

59. This Regulation replaces the Code of ethics of claims adjusters (O.C. 1040-99, 99-09-08).

The current code of ethics came into force on January 24, 2008 and applies to all claims adjusters.

The old code, dated Oct 1, 1999, is no longer in force. It ceased to apply as of January 23, 2008.

25
27
999 De Maisonneuve Blvd West, Suite 1200
Montreal, Quebec H3A 3L4
Tel. : 514 842.2591 or 1 800 361.7288
Fax: 514 842.3138
chad.ca