ALBERTA INSURANCE COUNCIL
(the “AIC”)
In the Matter of the Insurance Act, R.S.A. 2000 Chapter I-3
(the “Act”)
And
In the Matter of Kortney Paris Hillar Jmaeff
(the "Agent")
DECISION
OF
The Life Insurance Council
(the “Council”)
This case involved an allegation pursuant to 467(1)(c) of the Act. Specifically, it is alleged that the Agent failed to disclose any other occupation or employment other than as an insurance agent on his Form 1 Applications For Agents Certificate of Authority, for life and accident and sickness (“A&S”) insurance both dated June 17, 2014. In so doing, it is alleged that this constitutes an offence pursuant to s. 467(1)(c) of the Act.
Facts and Evidence
This matter proceeded by way of a written Report to Council dated August 17, 2015 (the “Report”). The Report was forwarded to the Agent for his review and to allow the Agent to provide the Council with any further evidence or submissions by way of Addendum. The Agent submitted an addendum by way of a one page letter.
1. The Former Agent was licensed from January 8, 2013 to June 30, 2015 for life and A&S insurance. The Former Agent’s certificates of authority for life and A&S insurance were not renewed and automatically expired on June 30, 2015. Attached hereto and marked as “Exhibit A” is a copy of the Former Agent’s License History.
(pp. 5-6)
2. Attached hereto and marked as “Exhibit B” are copies of the Former Agent’s Form 1 Applications For Agents Certificate of Authority for life and A&S insurance both dated June 17, 2014. In section 10 of each application, the Former Agent answered “No” to the question, “Do you have any other occupation or employment other than as an insurance agent?”
(pp. 7-10)
3. The AIC received an e-mail dated April 21, 2015 from Alessandro Tocco (“AT”) with the ASC. AT advised that the ASC opened an investigation against the Former Agent and David Ryan Bellamy (“DB”). AT further advised that they believe the Former Agent and DB are involved with Caprice Financial and Gateway Financial Concepts and that no parties were registered to sell securities. Attached hereto and marked as “Exhibit C” is a copy of the e-mail.
(pp. 11-13)
4. The Investigator reviewed the website for Caprice Financial on April 29, 2015 and printed information which included a “Company Overview” and information on “Our Services”. Also included was information in regard to an “Event” dated March 18, 2015, which included a presentation by the Former Agent and DB as listed under the “Event Schedule”. The presentation was titled “International Financial Planning” and the Former Agent and DB were referred to as “International Financial Planners.” Attached hereto and marked as “Exhibit D” is a copy of the information described above.
(pp. 14-17)
5. The Investigator wrote to the Former Agent by letter dated April 30, 2015 and requested information and documentation. Attached hereto and marked as “Exhibit E” are copies of the e-mail and letter.
(pp. 18-20)
6. The Investigator received a letter dated May 7, 2015 from the Former Agent in response to his request for information. The Former Agent advised that he had not represented the solicitation of any registered or non-registered securities and that what he represented was “International Financial Planning”. The Former Agent further advised that he is a “subcontractor” to Caprice Financial and that he entered into the relationship on May 12, 2014. The Former Agent also advised that he is compensated through financial planning fees, retainers and finders fees. Attached hereto and marked as “Exhibit F” is a copy of the letter.
(pp. 21-23)
7. The Investigator wrote to the Former Agent by letter dated May 14, 2015 and requested additional information and documentation. Attached hereto and marked as “Exhibit G” are copies of the e-mail and letter.
(pp. 24-26)
8. The Investigator received an e-mail dated May 20, 2015 with attachments from the Former Agent.
Included with the e–mail were the following attachments:
• A letter from the Former Agent dated May 15, 2015, in response to the Investigator’s additional request for information.
(see pp. 28-29)
• A copy of a “Referral Agency Agreement” between the Former Agent and “Caprice Financial Inc., SA” with an effective date of May 12, 2014. Section 1(a) of the agreement indicates, “Principal is a referring agent and desires to appoint Agent as general referral Agent for the sale of Principal’s services in the following territory: Alberta, Canada.”
Section 5(a) of the agreement indicates, “Agent, during the term of the agreement, shall receive a financial planning fee, finder’s fee and/or retainer from the sale of Principal’s services sold for use in Agent’s territory, whether sold by Agent or by Principal, or others, except as provided in this agreement.”
(see pp. 30-34)
• A copy of the Former Agent’s two-sided business card. One side of the business card contains the Former Agent’s name with reference to Caprice Financial and indicating “International Financial Planner” and “Gateway Financial Concepts Limited” on the other side of the business card.
(see pp. 35)
Attached hereto and marked as “Exhibit H” are copies of the e-mail and attachments described above.
(pp. 27-35)
9. The Investigator wrote to the Former Agent by letter dated May 21, 2015 and requested additional information. Attached hereto and marked as “Exhibit I” are copies of the e-mail and letter.
(pp. 36-38)
10. The Investigator received an e-mail dated May 26, 2015 with attachments from the Former Agent.
Included with the e-mail were the following attachments:
• A letter from the Former Agent dated May 26, 2015 in response to the Investigator’s request for additional information. The Former Agent advised that the “fees” are only related to the financial plan and that if a plan was done, payment would have been sent to Gateway Financial Concepts Limited, who would have paid Caprice Financial Inc., who then would have paid Maverick Wealth Management Inc.
(see pp. 40-41)
• A sample copy of a “Gateway Financial Concepts Limited Financial Planning Agreement”. The agreement is between the “Client” and the “Planner” and sets out the “Services of Planner” in section 1.
(see pp. 42-44)
Attached hereto and marked as “Exhibit J” are copies of the e-mail and attachments described above.
(pp. 39-44)
Decision of the Council
Guilty x 2, $300 x 2
___________ Therefore, in relation to this finding, we levy a civil penalty in the amount of ______ pursuant to ss. 480(1)(_) of the Act and 13(1)(_) of the Certificate Expiry, Penalties and Fees Regulation, A.R. 125/2001. The Penalty must be paid within thirty (30) days of receiving this notice. In the event that the penalty is not paid within thirty (30) days, the Agent’s certificate of authority will be automatically suspended pursuant to s. 480(4) of the Act. Pursuant to s. 482 of the Act (copy enclosed), the Agent has thirty (30) days in which to appeal this decision by filing a notice of appeal with the Office of the Superintendent of Insurance.
This Decision was made by way of a motion made and carried at a properly conducted meeting of the Life Insurance Council. The motion was duly recorded in the minutes of that meeting.
Date:___________________________
________________________________
Kenneth Doll, Chair
Life Insurance Council
Extract from the Insurance Act, Chapter I-3
Appeal
482 A decision of the Minister under this Part to refuse to issue, renew or reinstate a certificate of authority, to impose terms and conditions on a certificate of authority, to revoke or suspend a certificate of authority or to impose a penalty on the holder or former holder of a certificate of authority may be appealed in accordance with the regulations.
Extract from the Insurance Councils Regulation, Alberta Regulation 126/2001
Notice of appeal
16(1) A person who is adversely affected by a decision of a council may appeal the decision by submitting a notice of appeal to the Superintendent within 30 days after the council has mailed the written notice of the decision to the person.
(2) The notice of appeal must contain the following:
a) a copy of the written notice of the decision being appealed;
b) a description of the relief requested by the appellant;
c) the signature of the appellant or the appellant's lawyer;
d) an address for service in Alberta for the appellant;
e) an appeal fee of $200 payable to the Provincial Treasurer.
(3) The Superintendent must notify the Minister and provide a copy of the notice of appeal to the council whose decision is being appealed when a notice of appeal has been submitted.
(4) If the appeal involves a suspension or revocation of a certificate of authority or a levy of a penalty, the council's decision is suspended until after the disposition of the appeal by a panel of the Appeal Board.
Address for Superintendent of Insurance:
Superintendent of Insurance
Alberta Finance
402 Terrace Building
9515-107 Street
Edmonton, Alberta T5K 2C3