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 Udayarjan Subbaiya Vasu
(the "Agent")
DECISION
OF
The Life Insurance Council
(the “Council”)
This case involved an allegation pursuant to s. 481(2) of the Act. Specifically, it is alleged that the Agent failed or refused to provide information and documentation requested by the AIC through a Demand for Information (the “Demand”). In so doing, it is alleged that the Agent contravened a provision of the Act as contemplated in s. 480(1)(b).
Facts and Evidence
This matter proceeded by way of a written Report to Council dated September 20, 2018 (the “Report”). The Report was forwarded to the Agent for review and to allow the Agent to provide the Council with any further evidence or submissions by way of Addendum. The Agent did not provide additional materials by way of Addendum.
In July 2018 the AIC commenced audits to verify the Continuing Education credits (“CE”) claimed on licensees’ renewal applications. Auditees were randomly selected from a pool of agents who renewed their certificates of authority during the final weeks of the renewal period. Particularly, the Agent, herein, was asked to provide proof of his CE credits for the past licensed period, being 2017-2018, to the AIC within thirty (30) days.
The Agent was the former holder of life and accident & sickness (“A&S”) certificates of authority and held the certificates from December 31, 2014 to March 16, 2015 and again during the period of January 17, 2018 to August 29, 2018. The Agent’s certificates of authority remained in effect until August 29, 2018 when the Agent’s certificates were suspended due to his failure to provide proof of CE credits.
On July 25, 2018 the AIC emailed the Demand letter to the Agent and provided him with thirty (30) days to respond. The Agent was contacted by telephone on August 8, 2018 and cautioned to respond to the Demand within the thirty (30) day deadline. Having received no response, the AIC emailed the Agent, on August 9, 2018 and prompted him to respond to the Demand. The Agent responded to the AIC on October 16, 2018 and advised that he was facing significant difficulties retrieving the certificates requested, as the Agent was no longer practicing the sale of insurance, and the materials held by his previous employer were essentially inaccessible to him.
Discussion
As we have noted previously, the AIC operates under a delegation from the Minister of Treasury Board and Finance that authorizes the AIC to investigate complaints against holders and former holders of insurance agent certificates of authority. Pursuant to the Minister of Finance Directive No. 05/01, the Minister also delegated his powers under s. 481 to the AIC. Section 481 states that “[t]he Minister may direct the holder or former holder of a certificate of authority to provide to the Minister within a reasonable period of time specified in the direction any information specified by the Minister relating to the matters in s. 480(1).” Subsection 2 states that “… A person served with a direction … who has the information must provide the information in accordance with the direction.”
The offence of failing to respond to a demand for information is one of strict liability. This means that in order to be found guilty, the AIC only needs to prove that the Demand was properly made and delivered. There is no requirement that the AIC prove that the Agent’s failure to respond was intentional. Once the AIC proves that the Demand was made, the onus shifts to the Agent to demonstrate that he took all reasonable efforts to avoid committing the offence. From the evidence in the Report, the Council is satisfied that the AIC’s Demand meets the requirements of s. 481 of the Act. The investigation arose out of matters found in s. 480 of the Act and the Agent was given a reasonable opportunity to respond. Given the facts in their entirety, it is clear that the Agent did not act with due diligence and the Council finds him guilty.
In terms of the applicable sanction, the Act requires that holders and former holders of licenses provide information when called upon to do so. Therefore, in light of all of these circumstances we order that a civil penalty in the amount of $300.00 be levied against the Agent pursuant to s. 13(1)(b) of the Certificate Expiry, Penalties and Fees Regulation, A.R. 125/2001. The civil penalty must be paid within thirty (30) days of receiving this notice.
In the event that the civil penalty is not paid within thirty (30) days interest will begin to accrue at the applicable prescribed rate. Pursuant to s. 482 of the Act (excerpt 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.
Dated: January 9, 2019 [Original signed by]
Michael Bibby, 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
Email: tbf.insurance@gov.ab.ca