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 Desiree Legada
(the "Agent")
DECISION
OF
The General Insurance Council
(the “Council”)
This case involved an allegation pursuant to s. 480(1)(e) of the Act. Specifically, it is alleged that the Agent issued a liability card to a consumer that confirmed coverage for an automobile, without completing or collecting the premium information. As a result of this instance, it is alleged that the Agent demonstrated incompetence pursuant to s. 480(1)(e) of the Act.
Facts and Evidence
This matter proceeded by way of a written Report to Council (the “Report”) dated January 8, 2018 and was reviewed at the March 7th and April 4th, 2018 Council meetings. The Report also contained documentation about the Agency’s processes and copies of internal communications. The Report was forwarded to the Agent for her 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 for the Council’s consideration in the form of a written explanation of the events leading up to the alleged activity.
The Agent is the former holder of a general insurance agent certificate of authority. The Agent held the Certificate continuously from July 6, 2010 through to July 10, 2017 when the AIC received information that the Agent’s employer (the “Agency”) had terminated her employment.
The Agent’s Manager (“MM”) notified the AIC on July 10, 2017 that the Agency had terminated the Agent’s employment. The AIC contacted MM on July 26, 2017 by way of email and requested that he provide details regarding the Agent’s termination. In a response email dated August 2, 2017, MM indicated the Agent failed to properly document a request from a consumer to add an automobile to the consumer’s policy and that she issued a liability card to that consumer for that automobile. As a result, they terminated her employment. MM appended an email from the Director, Sales and Service of the Agency (“RM”) which set out the sequence of events. By way of summary, the Agent processed a new policy for a client on May 13, 2017. On May 17, 2017 the client emailed the Agent to say that he wanted to add a relative as a driver on the policy.
On May 20, 2017 the relative attended the Agent’s office and informed her that he needed insurance for one day. The reason for this was that he could not make a change on his existing insurance because his agency was closed. In response, the Agent gave the relative a hand-written Nordic temporary pink card, however, she used a wrong date. When the relative returned and pointed out that the dates were wrong on the Nordic pink card the Agent provided him with an AMA Insurance Company temporary pink card. However, the Agent did not have him complete an application in this regard.
The AIC contacted the Agent on August 15, 2017 and requested that she provide a response to the allegations. On August 30, 2017 the Agent emailed the AIC and outlined a number of health issues that she said contributed to the situation.
Discussion
In order to conclude that the Agent demonstrated incompetence to act as insurance agent pursuant to s. 480(1)(e) of the Act, we believe that we must be satisfied that the Agent’s behaviour was a marked and pronounced departure from the level of competence expected of similar agents in similar circumstances. Making reference to “similar agents in similar circumstances” recognizes that agents with many years of experience will most often have more knowledge and experience than an agent with much less experience. Likewise, agents who work exclusively in one area of insurance would exhibit more expert skills than the typical agent without the same experience. In this respect, the standard by which we judge an agent’s competence has both objective and subjective elements.
We also note that s. 480(1)(e) of the Act speaks to conduct that goes to the essence of an agent’s competence and it is our view that making an error or mistake does not necessarily equate to incompetence. Were this to be otherwise, it is unlikely that any individual could hold a license for long. Therefore, incompetence will generally be characterized by a pattern of conduct or one or more repeated errors. In this regard we say “generally” because there are some mistakes that are so egregious in nature that we could conclude that an agent is incompetent notwithstanding the fact that it only occurred once.
In this case, the Agent clearly breached agency guidelines. However, she attempted to rectify her oversight by contacting Nordic insurance to confirm the protocol with respect to issuing a policy in the described circumstances and, there seems to have been some confusion in the Agent’s mind as to what the Agency’s policies were with respect to records and receipting. It appears that the Agent believed that the policy would be in force retroactively once signatures were collected. In retrospect the Agent concluded “in hindsight that I did not have all the documents to complete the endorsement”.
As noted previously, isolated errors may be evidence of negligence but we believe that the Agent’s actions in this case do not amount to incompetence. Therefore, we find the Agent not guilty of the allegations as set out in the Report.
This Decision was made by way of a motion made and carried at a properly conducted meeting of the General Insurance Council. The motion was duly recorded in the minutes of that meeting.
Date: May 2, 2018 Original signed by
Lorrie King, Chair
General 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