In the Matter of The FINANCIAL INSTITUTIONS ACT (RSBC 1996, c.141) (the "Act")
and The INSURANCE COUNCIL OF BRITISH COLUMBIA ("Council")
and GERALD DOUGLAS SPIELMACHER (the "Licensee")
ORDER As Council made an intended decision on April 12, 2016, pursuant to sections 231, 236, and 241.1 of the Act; and
As Council, in accordance with section 23 7 of the Act, provided the Licensee with written reasons and notice of the intended decision dated May 17, 2016; and
As the Licensee has not requested a hearing of Council's intended decision within the time period provided by the Act;
Under authority of sections 231, 236, and 241.1 of the Act, Council orders: 1. A condition is imposed on the Licensee's life and accident and sickness insurance licence that requires the Licensee to successfully complete the Advocis ARMED seminar at the time of its next availability in British Columbia, or an equivalent course or seminar approved by Council.
2. A condition is imposed on the Licensee's life and accident and sickness insurance licence that if the Licensee does not successfully complete the Advocis ARMED seminar when it is next available in British Columbia, or fails to notify Council that the Advocis ARMED seminar has been successfully completed, the Licensee's life and accident and sickness insurance licence is suspended as of the 14th business day after the Advocis ARMED seminar was available in British Columbia; or, if an equivalent course or seminar is approved by Council, the Licensee must successfully complete the equivalent course or seminar on or before September 7, 2016 or the Licensee's life and accident and sickness insurance licence is suspended as of September 8, 2016, without further action from Council.
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Order Gerald Douglas Spielmacher 14496-Il907 June 7, 2016 Page 2 of2
3. The Licensee is fined $2,500.00. 4. The Licensee is assessed Council's investigative costs of $525.00. 5. A condition is imposed on the Licensee's life and accident and sickness insurance licence that requires the Licensee to pay the above-ordered fine and investigative costs no later than September 7, 2016. If the Licensee does not pay the ordered fine and investigative costs in full by this date, the Licensee's life and accident and sickness insurance licence is suspended as of September 8, 2016, without further action from Council and the Licensee will not be permitted to complete any subsequent annual filings until such time as the ordered fine and investigative costs are paid in full.
This order takes effect on the 7th day of June, 2016.
Chairperson, Insurance Council of British Columbia
Brett Thibault
INTENDED DECISION of the INSURANCE COUNCIL OF BRITISH COLUMBIA ("Council")
respecting GERALD DOUGLAS SPIELMACHER (the "Licensee")
Pursuant to section 232 of the Financial Institutions Act (the "Act"), Council conducted an investigation to determine whether the Licensee acted in compliance with the requirements of the Act.
As part of Council's investigation, on February 15, 2016, a Review Committee (the "Committee") met with the Licensee to discuss an allegation that the Licensee processed the insurance business of another life insurance agent (the "Agent") in an inappropriate manner.
The Committee was comprised of one voting member and three non-voting members of Council. Prior to the Committee's meeting with the Licensee, an investigation report was distributed to the Committee and the Licensee for review. A discussion of this report took place at the meeting and the Licensee was provided an opportunity to make further submissions. Having reviewed the investigation materials, and after discussing this matter with the Licensee, the Committee prepared a report of its meeting for Council.
The Committee's report, along with the aforementioned investigation report, were reviewed by Council at its April 12, 2016 meeting, where it was determined the matter should be disposed of in the manner set out below.
PROCESS Pursuant to section 23 7 of the Act, Council must provide written notice to the Licensee of the action it intends to take under sections 231, 236, and 241.1 of the Act before taking any such action. The Licensee may then accept Council's decision or request a formal hearing. This intended decision operates as written notice of the action Council intends to take against the Licensee.
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Intended Decision Gerald Douglas Spielmacher 14496-11907 May 17, 2016 Page 2of4
FACTS The Licensee has been a life and accident and sickness insurance agent ("life agent") in British Columbia for over 30 years and is currently the nominee of a life insurance agency.
A client (the "Client") complained to her insurer (the "Insurer") that the Licensee had signed two . of the Client's insurance applications, as the agent, without meeting the Client. The Client's applications were actually completed by the Agent, who was a member of the Licensee's insurance team.
After the Client met with the Agent, and based on his recommendations, the Client, on two separate occasions, completed insurance applications under the Agent's direction. The Client's insurance applications were then brought to the Licensee, who signed and remitted the applications using his Insurer code.
The Client stated that she was surprised when she was informed by the Insurer that the Licensee had processed her applications, and not the Agent.
The Licensee stated that he had recruited the Agent and trusted in his abilities. He explained that he was seeking to assist the Agent in placing the insurance. With regard to the Client's insurance application of November 2013, the Licensee stated that the Agent did not have a contract with the Insurer, and he was trying to help the Agent. With regard to the Client's insurance application of September 2014, the Agent had a contract with the Insurer, but it was through a different managing general agent ("MGA"). By signing and submitting the insurance application under his name, his MGA benefited from the business.
The Licensee stated that this only occurred on these two occasions and that he was only trying to assist the Agent. The Licensee stated that before signing and submitting the Client's insurance applications, he reviewed the applications and discussed each with the Agent. The Licensee acknowledged that he never met with or talked to the Client before signing and submitting either of the insurance applications, and was aware that this practice was inappropriate.
ANALYSIS Council found that the Licensee's actions in signing an insurance application, when he had not first met with the Client, was inappropriate and not the sort of conduct expected of a life agent with the Licensee's experience.
Intended Decision Gerald Douglas Spielmacher 14496-11907 May 17, 2016 Page 3of4
Council found that the Licensee knew it was improper to sign an insurance application as the agent when he had no involvement with the client. Furthermore, the Licensee knew that he had a responsibility to inform the Insurer that, when he was signing the insurance application, he had not met with the Client or confirmed that the information contained in the insurance applications was correct and accurate.
Council accepted that the Licensee did not act with any intention to mislead either the Client or the Insurer, but was troubled that the Licensee did so, despite admitting that he was aware the practice was unacceptable.
Council concluded that, by failing to disclose to the Insurer that he had not met with the Client, the Licensee failed to act in accordance with the usual practice of the business of insurance.
Council considered C. Canavan, as well as general and specific deterrence principles, and determined a fine and assessment of investigation costs would be appropriate to address the Licensee's conduct. In light of his failure to grasp the importance of full disclosure to both the Client and the Insurer, Council determined that the Licensee would also benefit from completing additional education.
INTENDED DECISION Pursuant to sections 231, 23 6, and 241.1 of the Act, Council made an intended decision to: 1. Impose a condition on the Licensee's life and accident and sickness insurance licence that requires him to successfully complete Advocis' ARMED seminar at the time of its next availability in British Columbia.
2. Fine the Licensee $2,500.00. 3. Assess the Licensee Council's investigative costs of $525.00. The Licensee is advised that should the intended decision become final, the fine and investigative costs will be due and payable within 90 days of the date of the order. In addition, failure to pay the fine and investigative costs within the 90 days will result in the automatic suspension of the Licensee's life and accident and sickness insurance licence and the Licensee will not be permitted to complete any annual filing until such time as the fine and investigative costs are paid in full.
Furthermore, the Licensee is advised that failure to take the ARMED seminar when it is next available in British Columbia or failure to notify Council that the ARMED seminar has been taken, will result in the automatic suspension of the Licensee's life and accident and sickness insurance licence on the 14th business day after the ARMED seminar was available in British Columbia.
Intended Decision Gerald Douglas Spielmacher 14496-11907 May 17, 2016 Page 4of4
The intended decision will take effect on June 7, 2016, subject to the Licensee's right to request a hearing before Council pursuant to section 23 7 of the Act.
RIGHT TO A HEARING If the Licensee wishes to dispute Council's findings or its intended decision, the Licensee may have legal representation and present a case at a hearing before Council. Pursuant to section 237(3) of the Act, to require Council to hold a hearing, the Licensee must give notice to Council by delivering to its office written notice of this intention by June 6, 2016. A hearing will then be scheduled for a date within a reasonable period of time from receipt of the notice. Please direct written notice to the attention of the Executive Director.
If the Licensee does not request a hearing by June 6, 2016, the intended decision of Council will take effect.
Even if this decision is accepted by the Licensee, pursuant to section 242(3) of the Act, the Financial Institutions Commission still has a right to appeal this decision of Council to the Financial Services Tribunal ("FST"). The Financial Institutions Commission has 30 days to file a Notice of Appeal, once Council's decision takes effect. For more information respecting appeals to the FST, please visit their website at fst.gov.bc.ca or contact them directly at:
Financial Services Tribunal PO Box 9425 Stn Prov Govt Victoria, British Columbia V8W9Vl
Reception: 250-387-3464 Fax: 250-356-9923 Email: FinancialServicesTribunal@gov.bc.ca
Dated in Vancouver, British Columbia, on the 17th day of May, 2016. For the Insurance Council of British Columbia
Gena!d1M atier Executive Director
604-695-2001 gmatier@insurancecouncilofbc.com
GM/yw