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  Walmart Canada Bank

(the “Restricted Agent”)

 

As represented by

Designated Individual Kevin Pearce

(the “DI”)

 

DECISION

OF

The Life Insurance Council

(the “Council”)

 

 

This case involved an allegation pursuant to s. 452(1) of the Act.  Specifically, it is alleged that the Restricted Agent acted as an insurance agent for sales of credit related (“CR”) insurance during a period of time in which it did not hold a valid and subsisting certificate of authority to do so. In so doing, it is alleged that this constitutes an offence pursuant to s. 452(1) of the Act.

 

Facts and Evidence

This matter proceeded by way of a written Report to Council dated October 12, 2015 (the “Report”). The Report was forwarded to the DR for review and to allow the Agency to provide the Council with any further evidence or submissions by way of Addendum. The DI signed the Report on October 27, 2015 and did not adduce any further evidence.  The Restricted Agent is the holder of a restricted insurance agent’s certificate of authority for the sale of credit-related insurance and it first obtained a certificate on June 11, 2010. KP has been the Restricted Agent’s DI since February 24, 2015.

 

By letter and accompanying application form dated February 6, 2015, KP advised that the Restricted Agent had recently discovered that its certificate of authority expired in February, 2013. KP further advised that the Restricted Agent was compensated for acting as an insurance agent between February 16, 2013 and January 27, 2015. KP indicated that the certificate was not renewed as a result of an “accidental oversight.”   He apologized for this oversight and advised the AIC that the Restricted Agent had since implemented stricter controls to ensure that the renewal of its certificate of authority would be attended to with greater vigilance.

 

KP also later confirmed that the Restricted Agent processed 11,078 insurance with Alberta residents during the time period in question and that it was compensated through an arrangement with Canada Life.  This compensation amounted to hundreds of thousands of dollars.  Canada Life also confirmed that the Agent acted in the capacity of an insurance agent during the period in which it did not hold a valid certificate of authority.

 

Decision of the Council

From the evidence in the Report, it is clear that the Restricted Agent’s certificates of authority to act in the capacity of a credit-related and group travel agent expired on February 16, 2013.  It is equally clear that the Restricted Agent continued to accept and process applications despite the fact that its certificate of authority expired and this is admitted by the Restricted Agent.  Therefore, we find that the Restricted Agent breached s. 452(1) of the Act and that it contravened a section of the Act as contemplated in s. 480(1)(b).

 

As to the applicable sanctions, we have the ability to levy a civil penalty in an amount not exceeding $1,000.00 pursuant to ss. 480(1)(b) of the Act and 13(1)(b) of the Certificate Expiry, Penalties and Fees Regulation, A.R. 125/2001 per offence.  We could also order that the Restricted Agent’s certificate of authority be suspended or revoked.  Were we to treat each of the policies sold as an individual offence we would have the jurisdiction to levy civil penalties against the Restricted Agent in an amount exceeding $11 million.  However, given the fact that this is the Restricted Agent’s first contravention of the Act (and, hopefully, its last) we are prepared to find the Restricted Agent guilty of only three offences and these correspond to the unlicensed activity that spanned three different licensing terms.  We further order that a civil penalty in the amount of $1,000.00 be levied against the Restricted Agent for each of the three offences ($3,000.00 total).  The civil penalties must be paid within thirty (30) days of receiving this notice. In the event that the penalties are not paid within thirty (30) days, the Restricted 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 Restricted 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.

 

 

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:  January 19, 2016

_______Original Signed By_____

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