Case #70914
General Insurance Council
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 Lisa Munro (the "Agent")
DECISION OF The General Insurance Council (the “Council”)
This case involves allegations pursuant to s. 480(1)(a) of the Act or, in the alternative, s. 509(1)(a) of the Act. Specifically, it is alleged that the Agent falsely declared the completion of continuing education (“CE”) hours, when, in fact, the CE hours had not been completed. In so doing, it is alleged that the Agent acted in a, deceitful, dishonest or untrustworthy manner in violation of s. 480(1)(a). In the alternative, it was alleged that the Agent made false or misleading statements as contemplated in s. 509(1)(a) of the Act when the Agent reported that the required CE hours had been completed to renew the general certificate of authority for the 2020/2021 certificate term (July 1, 2020, to June 30, 2021) when, in fact, they were not completed and subsequently violated s. 480(1)(b) of the Act.
Facts and Evidence This case proceeded by way of written Report to Council dated October 19, 2021 (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 is the holder of a General Insurance – Level 2 Agency certificate of authority. The Agent held this certificate from April 26, 2003, to September 24, 2021, and again from October 12, 2021 to present.
As part of the AIC’s annual CE audit, an “Alberta Insurance Council Continuing Education (CE) Audit” request was sent to the Agent by way of email correspondence dated August 23, 2021 (the “Demand”). The formal Demand was provided in accordance with s. 481(2) of the Act and required the Agent to produce CE certificates regarding all declared CE within the 2020/2021 certificate term. The Demand provided for a response within 30 days of receiving the Demand, being September 21, 2021.
Case #70914 2 General Insurance Council By way of email dated the same, the Agent requested a deferral to respond to the audit based on circumstances outside of their control. On August 24, 2021, the AIC Compliance Department rejected the deferral request, explaining that “Based on legislation, no exceptions can be made.”
On September 8, 2021, the Agent sent an email to the AIC Compliance Department, providing CE certificates and the following explanation: […] I have attached all the certificates for my 12.75 hours and I had 2.5 carry forward from last term. But it appears that the [Agency] [redacted] system, where we complete our education hours, printed a copy of a test for #49*** [redacted] Telephone Etiquette, which I completed in 2019, not the copy from June 17, 2021. I only noticed that at this moment. I have reached out to a supervisor for a reprinted copy. […] I do not have access to my work email or training materials/ certificates from [Agency] [redacted]. […]
On September 9, 2021, the AIC Compliance Department responded with the following: We will still require certificate #49*** [redacted] dated May 13, 2021. We will also require the prior year carry forward certificates #52*** [redacted] (Jan 28, 2020) and 54*** [redacted] (May 12, 2020). […]
On September 12, 2021, the Agent replied to the AIC Compliance Department with the following information: I […] [redacted] do not have access to my [Agency] [redacted] training modules or my work email. I have reached out to my immediate manager and I’m hopeful that I can request he email me the files and I provide you with the copies.
This is totally my error, I have certificates from 2005. Why not now? It was when Covid hit I was working from home right away, like February 2020. I didn’t even think of what I had filed at my desk until now. I’m not making excuses whatsoever. I clearly should have had emailed or printed my copies of these certificates, but it doesn’t appear I have copies to provide to you.
Once I get the copies I will forward ASAP. […]
On September 19, 2021, the Agent provided the following information to the AIC Compliant Department: Here is a copy of 52*** [redacted] as part of the forwarding credits from last term. I have reached out to my manager to assist me with the copy of 54*** [redacted] from [Course Provider] [redacted] dated May 12, 2020. A copy of that should be arriving shortly.
The attached certificate for Telephone Etiquette from [Agency] for course 49*** [redacted] is actually from 2019, not 2021 as I thought. I’m certain I completed this course and the test associated with it in the last week on [sic] June 2021. I was under the impression that it was that certificate I had PDF’d and added to my file. My supervisor is looking to see if there is any evidence of this on our training system.
I’m terribly sorry for being so disorganized. […] [Redacted] I am willing to make amends for my error, pay a fine, redo the last certificate once again, I am at your mercy.
On September 20, 2021, the AIC Compliance Department requested the following:
Case #70914
3
General Insurance Council
Please note that the audit has not been satisfied yet. We still require certificate #49*** [redacted]-May 13,2021 and the carry forward certificate #54*** [redacted]-May 12, 2020. […]
By way of email dated the same, the Agent replied with the following information: […] I am sorry to advise that I am not able to provide either of the two pending certificates at this time.
[…] I am willing to comply with your request but unable to follow through as my employer advised they do not have certificates in their system for me specifically for these two courses.
I feel just horrible failing an audit and considering how many years I have been doing this, I should know better, and do better.
My apologies. I will wait to hear back from you on what happens next. […]
On September 21, 2021, the AIC Compliance Department provided the Agent with the following information: We still require the following certificates you reported in your licensing profile: 49*** [redacted] – May 13, 2021 54*** [redacted] – May 12, 2020
You indicated that you did not have these certificates to produce. Without these certificates you are short 3.25 for your General License.
If you have additional continuing education certificates for the 2020-2021 renewal period to meet the CE requirements, please provide them ASAP. Alternatively, you may wish to contact the course providers fo copies of your certificates.
On the same date, the Agent sent the AIC Compliance Department the following explanation, which stated: […] I understand that I am being held to the rules of the province when it comes to not being able to substantiate my hours.
My employer has confirmed with [Course Provider] [redacted] that they did not offer educational hours for that listed course 54*** [redacted] – May 12, 2020. My supervisor also supplied a copy of my certificates from our in house training system and there is no certificate for the course 49*** [redacted] - May 13, 2021, only the copy of the completed course in 2019.
The circumstances of the last few years of my life has [sic] left me as a different person than I was in early 2017. […]I have made some mistakes and I am willing to own them and make retribution. I’m present and eager to do what has to be done to reverse the pending suspension and continue with my career.
My apologies to the compliance team and please share that this has definitely been a lesson learned on being more organized and detailed going forward. […]
Discussion In order for the Council to conclude that the Agent has committed an offence pursuant to s. 480(1)(a) of the Act, the Report must prove, on the basis of clear and cogent evidence, that it is more likely than not that the Agent
Case #70914 4 General Insurance Council committed the act as alleged. The requirement of clear and cogent evidence reflects that the findings of the Council can dramatically impact an insurance agent’s ability to remain in the industry. Therefore, the Council carefully weighs all evidence before it prior to reaching its Decision.
The applicable legal test to determine the Agent’s guilt in violating s. 480(1)(a) of the Act is set out in the Court of Queens’s Bench of Alberta Decision, Roy v. Alberta (Insurance Councils Appeal Board), 2008 ABQB 572 (hereinafter “Roy”). In Roy, the Life Insurance Council found that an agent violated s. 480(1)(a) of the Act by attesting to completing the required continuing education hours when they did not, in fact, complete the required continuing education hours. The Insurance Councils Appeal Board also found the agent guilty on appeal. The agent advanced the decision to the Court of Queen’s Bench of Alberta.
In his reasons for judgment dismissing the appeal, Mr. Justice Marceau wrote as follows at paragraphs 24 to 26: [24] The Long case, albeit a charge under the Criminal Code of Canada where the onus of proof is beyond a reasonable doubt (not on a preponderance of evidence as in this case), correctly sets out the two step approach, namely the court or tribunal must first decide whether objectively one or more of the disjunctive elements have been proven. If so, the tribunal should then consider whether the mental element required has been proved. While the Appeal Board said it was applying the Long decision, it did not make a finding as to whether step 1 had been proved with respect to each of the disjunctive elements. Rather it immediately went into a step 2 analysis and found that the mental element required for untrustworthiness might be less than the mental element required for fraud (as a given example).
[25] I am of the view that statement was in error if it was made to convey a sliding scale of mens rea or intent depending on which of the constituent elements was being considered. In my view, the difference between the disjunctive elements may be found in an objective analysis of the definition of each and certainly, as demonstrated by the Long case, what constitutes fraud objectively may be somewhat different from untrustworthiness. However once the objective test has been met, one must turn to the mental element. Here to decide the mental element the Appeal Board was entitled, as it did, to find the mental element was satisfied by the recklessness of the Applicant.
[26] While the language used by the Appeal Board may be characterized as unfortunate, on this review on the motion of the Applicant I need not decide whether the Appeal Board reasonably could acquit the Applicant on four of the disjunctive elements. Rather, the only matter I must decide is whether the Appeal Board acting reasonably could conclude, as they did, that the Applicant’s false answer together with his recklessness justified a finding of "untrustworthiness". [Emphasis added]
With respect to the Report, the Council was satisfied that the Agent did not possess the CE certificates by the Regulation for the 2020/2021 certificate term. However, the Council did not conclude that the Agent made deliberate misrepresentations with the intent to deceive the AIC during this audit process. To do so, the Council would need to prove on the balance of probabilities that it is more likely than not that the Agent provided the information to the AIC intentionally, knowing that the information was false. The Council did not find the Agent guilty of such a violation and, as such, the Council turned to the alternative allegation of a s. 509(1)(a) offence under the Act.
Case #70914 5 General Insurance Council Section 509(1)(a) of the Act provides that “[n]o insurer, insurance agent or adjuster may make a false or misleading statement, representation or advertisement.” Offences such as those considered under s. 509(1)(a) of the Act are strict liability offences. As such, the AIC only has the onus to prove that the Agent’s statement that the required CE hours had been completed was false. Once this occurs, the onus then shifts to the Agent to establish a defence of due diligence. To establish this, the Agent must prove that all reasonable measures were taken to avoid making the false statement.
The Council considered all the evidence before it, in particular the information shared by the Agent that showed circumstances that were beyond their control. Once the Agent realized the mistake, the Agent took full responsibility of their mistake which was best summarized from their September 21, 2021, email that stated: “I have made some mistakes and I am willing to own them and make retribution. I’m present and eager to do what has to be done to reverse the pending suspension and continue with my career.”
However, with insurance agents working for clients and completing their applications, it is the responsibility of the insurance agent to ensure a high level of due diligence and accuracy when completing their own applications. Insurance agents work in a profession which necessitates the accurate completion of forms and insurance documents. Clients can experience severe difficulties when documents are inaccurately and improperly completed. Therefore, the Council finds that the Agent made a false or misleading statement as contemplated by s. 509(1)(a) of the Act and therefore has breached s. 480(1)(b) of the Act.
As to the appropriate sanction for this conduct, the Council may levy civil penalties in an amount up to $1,000.00 for an offence pursuant to s. 13(1)(b) of the Certificate Expiry, Penalties and Fees Regulation, AR 125/2001. The Council considered that there were circumstances in the Agent’s life beyond their control. Based on these factors and the evidence before the Council, the Council orders that a civil penalty of $250.00 be levied against the Agent.
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: February 18, 2022
[Original Signed By] Ross Bucsis, Vice-Chairperson General Insurance Council
Case #70914 6 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.
Contact Information and Useful Links for Appeal: Email: tbf.insurance@gov.ab.ca Phone: 780-643-2237 Fax: 780-420-0752 Toll-free in Alberta: Dial 310-0000, then the number Mailing Address: 402 Terrace Building, 9515 – 107 Street Edmonton, AB T5K 2C3 Link: Bulletins, notices, enforcement activities | Alberta.ca – Interpretation Bulletin 02-2021 – Submitting Notices of Appeal of Insurance Council Decisions