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 Alexander Wilson
(the "Agent")
DECISION
OF
The Life Insurance Council
(the “Council”)
This case involved an alleged violation of s. 481(2) of the Act. Specifically, that the Agent failed or refused to provide information requested by the Minister, through the AIC, by way of a formal demand for information (the “Demand”). In so doing, it is alleged that the Agent subsequently violated s. 480(1)(b) of the Act.
Facts and Evidence
This matter proceeded by way of a written Report to Council dated April 21, 2020 (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 provided an addendum response which was considered by the Council.
The AIC conducted an audit in March 2020, which sought to verify that the CE credits claimed on licensees’ 2019 renewal applications were correct. The auditees were selected at random and asked to provide proof of continuing education (“CE”) credits, in accordance with the requirements of s. 30 and 31 of the Insurance Agents and Adjusters Regulation, AR 122/01 (the “Regulation”). The Agent was selected as an auditee and, in this instance, was asked to provide records relating to the 2019 licensed period.
The Agent is the former holder of both life and accident & sickness (“A&S”) certificates of authority. The Agent concurrently held both certificates intermittently between the period of August 5, 2015, to April 3, 2020. the Agent’s certificates of authority were suspended due to his failure to produce continuing education records in accordance with ss. 31(3) of the Insurance Agents and Adjusters Regulation.
Section 31 provides:
(3) If the individual does not provide the records within 30 days after receiving a request from the Minister, the certificate of authority is suspended until the demand is complied with.
On March 2, 2020 the AIC emailed the Demand to the Agent requiring him to provide proof of CE credits on or before April 2, 2020. The AIC spoke with the Agent on March 27, 2020 stressing the statutory requirement to provide the information requested in the Demand. The Agent advised the AIC that he would provide the information as requested within the Demand by the deadline.
On April 2, 2020, the Agent responded by providing copies of various CE certificates. However, the Agent did not provide all of the required information as set out within the Demand by the Deadline provided and the Agent’s certificates were suspended in accordance with s. 31(3) of the Insurance Agents and Adjusters Regulation.
Within the Report is a letter dated May 4, 2020 from the Agent, acknowledging that he did not comply with the Demand and providing an explanation as to why he was not able to comply with the Demand. The Agent provided;
I still to this date have not been able to find the copy's of the certificates that I printed at the time of completing the said courses. Our office here in Lethbridge has been closed due to the COVID-19 pandemic and is now currently packed up and in storage as we are in the process of moving to a new location. This made it difficult for me to search through my files there in a timely manner. I have since had opportunity to look through my files there and was still unable to locate the necessary documentation.
As such, the Agent did not produce the records requested within the Demand.
Discussion
The Minister of Treasury Board and Finance has delegated its’ authority to the AIC to investigate complaints against holders, and former holders, of certificates of authority. Pursuant to Ministerial Directive 01/11 to the AIC“[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” (emphasis added).
The Demand referenced compliance with s. 31 of the Insurance Agents and Adjusters Regulation, AR 122/2001. Specifically, this section provides;
Records
31(1) An individual who holds a certificate of authority must keep a record issued by a continuing education provider respecting the continuing education courses completed by the individual during that certificate term.
(2) The records must be kept for a period of 3 years following the expiry of the certificate term and must be provided to the Minister upon request.
(3) If the individual does not provide the records within 30 days after receiving a request from the Minister, the certificate of authority is suspended until the demand is complied with.
The Demand itself is formed under s. 481(2) of the Act. This section provides, in part;
Demand for information
481(1) The 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 section 480(1).
(2) A person served with a direction under subsection (1) who has the information must provide the information in accordance with the direction.
Section 480 of the Act provides:
Sanctions affecting certificates
480(1) If the Minister is satisfied that the holder or a former holder of a certificate of authority […]
(b) has contravened any provision of this Act or the regulations or similar legislation in another jurisdiction or legislation that is a predecessor of this Act or the regulations,
[…]
Section 780 of the Act stipulates:
Offences
780 A person who contravenes any of the following provisions is guilty of an offence:
[…] (c) in Part 3, sections […] 481(2)
In this regard, the act of failing to provide the CE certificates (or “credits”) in accordance with s. 31(3) of the Insurance Agents and Adjusters Regulation, and the potential violation of s. 481(2) regarding the Demand prompted the AIC’s compliance investigation.
Regulatory offences such as these are strict liability offences. As such, the AIC has the onus to prove that the Demand was properly made upon the Agent, proper in the sense that they meet all of the requirements under the Act, and that the Agent did not comply. Once this occurs, the responsibility then shifts to the Agent to establish that he exercised due diligence in meeting his statutory requirement to respond. To substantiate this due diligence defence, the Agent must prove that he took all reasonable means to avoid making the offence. There is nothing that requires the AIC to prove that the Agent’s failure to respond was intentional. Given the facts in their entirety, it is clear that the Agent did not act with due diligence and we find him guilty of violating ss. 481(2) and 480(1)(b) of the Act, as alleged.
In consideration of the evidence before it, and the appropriateness of the request to confirm CE records under the Insurance Agents and Adjusters Regulation, the Council is satisfied that the Demand met the requirements of s. 481 of the Act. The Council agreed that the Agent was given a reasonable opportunity to respond to the Demand. Given the fact that the Agent failed to respond when called upon, the Agent has not met the burden of proof to establish the due diligence defence. As such, the Council finds the Agent guilty of violating s. 481(2) of the Act, and also finds that the Agent has subsequently violated s. 480(1)(b) of the Act.
In terms of the applicable sanction, the public relies on the AIC to investigate complaints, and the Act requires that licensees provide all the information when called upon to do so. Therefore, the public is not well-served when an agent fails to comply with demands like those made in this case. Pursuant to s. 13(1)(b) of the Certificate Expiry, Penalties and Fees Regulation, A.R. 125/2001, the Council has the discretion to assess a civil penalty in an amount up to $1,000.00. In this case, the Agent did not respond to the Demand. As such, the Council orders a civil penalty in the amount of $750.00.
The civil penalty of $750.00 must be paid within thirty (30) days of the mailing of this Decision. In the event that the civil penalty is not paid within thirty (30) days interest will begin to accrue at the prescribed rate. If the Agent has active certificates of authority at the time that the civil penalty becomes due, and that civil penalty has not been duly satisfied, the Agent’s active certificates of authority will be suspended in accordance with s. 480(4) of the Act. 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: __July 28, 2020__ [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