Insurance Council of British Columbia

In the Matter of the FINANCIAL INSTITUTIONS ACT, RSBC 1996, c.141 (the “Act”)

and the

INSURANCE COUNCIL OF BRITISH COLUMBIA (“Council”)

and

AMANPRIT SINGH GHAUG (the “Licensee”)

ORDER

As Council made an intended decision on September 19, 2023, pursuant to sections 231, 236, and 241.1 of the Act; and

As Council, in accordance with section 237 of the Act, provided the Licensee with written reasons and notice of the intended decision dated February 10, 2025; 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 that: 1) The Licensee is fined $2,000, to be paid by June 23, 2025;

2) The Licensee is required to be supervised by a Level 3 general insurance agent, as approved by Council, for a period of 12 months of active licensing, commencing, at the latest, on April 24, 2025;

3) The Licensee is required to complete the following courses, or equivalent courses as acceptable to Council, by September 22, 2025:

i.

ii. iii.

the Insurance Council Rules Course for General Insurance Agents, Salespersons and Adjusters;

the Insurance Institute’s “Ethics and the Insurance Professional” course; and an errors and omissions insurance course;

(Collectively, the “Courses”)

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4) The Licensee is assessed Council’s investigation costs of $734.37, to be paid by June 23, 2025; and

5) A condition is imposed on the Licensee’s general insurance licence that failure to pay the fine and investigation costs, complete the Courses, and to obtain a Level 3 general insurance agent supervisor by their deadlines will result in the automatic suspension of the Licensee’s general insurance licence, and the Licensee will not be permitted to complete the Licensee’s 2026 annual licence renewal until such time as the Licensee has complied with the conditions listed herein.

This order takes effect on the 24

th

day of March, 2025

______________________________ Janet Sinclair, Executive Director Insurance Council of British Columbia

INTENDED DECISION

of the

INSURANCE COUNCIL OF BRITISH COLUMBIA (“Council”)

respecting

AMANPRIT SINGH GHAUG (the “Licensee”)

1. Pursuant to section 232 of the Financial Institutions Act (the “Act”), Council conducted an investigation to determine whether the Licensee and/or Alteri Insurance Brokers Inc. (the “Agency”), which he worked for at the time, breached the Council Rules and/or the Code of Conduct relating to allegations that the Licensee and/or Agency issued falsified documents, including a summary of coverage document, a policy document and an invoice. It was also alleged that the Licensee and/or Agency collected premiums from a client for an insurance renewal but failed to renew the policy and failed to disclose to the client in a timely manner that the renewal was missed.

2. On July 11, 2023, as part of Council’s investigation, a Review Committee (the “Committee”) comprised of Council members met via video conference to discuss the investigation. An investigation report prepared by Council staff was distributed to the Committee, the Licensee and the Agency prior to the meeting, and the Licensee and Agency were given an opportunity to make submissions and provide further information. The Licensee attended the meeting; representatives of the Agency were given the option of attending but did not. A discussion of the investigation report took place at the meeting.

3. Having reviewed the investigation materials and discussed the matter at the July 11, 2023, meeting, the Committee prepared a report for Council that was reviewed by Council at its September 19, 2023, meeting. Council determined that the matter should be disposed of in the manner set out below.

4. At its September 19, 2023, meeting, Council directed that the former nominee of the Agency and another involved licensee should also be investigated. The issuance of this Intended Decision was delayed as those investigations proceeded, in case additional evidence was received in the course of the new investigations that could impact Council’s intended disciplinary action against the Licensee.

PROCESS 5. Pursuant to section 237 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 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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FACTS 6. The Licensee has held a general insurance licence with Council since April 11, 2001. The Licensee was first licensed as a Level 1 general insurance salesperson (“Level 1 Salesperson”) on April 11, 2001, and upgraded to a Level 2 general insurance agent (“Level 2 Agent”) on October 12, 2010. The Licensee was licensed as a Level 3 general insurance agent and was the nominee (“Level 3 Nominee”) at Marquis Underwriting Managers Ltd. (“Marquis”) from September 20, 2016, to May 1, 2021. He is currently licensed as a Level 2 Agent.

7. On December 2, 2021, Council received an email from the strata council of a strata property (the “Strata”), which alleged that the Licensee was not responding to the Strata’s property manager’s (the “Property Manager”) requests to provide proof of insurance coverage. The renewal was to have taken place on April 4, 2021. It was alleged that in September 2021 the Strata had suffered a water damage claim and the Property Manager was having difficulty opening the claim through the insurer (“Insurer One”) that had provided their previous year’s insurance, although the Agency had stated that the Strata’s policy had been renewed.

8. The Strata stated that the Licensee eventually informed them that there had been a problem with transferring their policy to the Agency and that it would open a claim through their errors and omissions insurance (“E&O”) policy.

9.

Council received a document from the Strata that the Agency had provided to the Strata in April 2021, which purports to show insurance coverage effective from April 4, 2021, to April 4, 2022 (the “Insurer One Document”). The document displays a policy number; however, there are no insurance companies named in the document.

10. On December 6, 2021, the Strata sent Council a document that consists of declaration pages that appear to have been produced by another insurer (“Insurer Two”). This document (the “Insurer Two Document”) was sent to the Strata on December 6, 2021, by Joshua Krenus (“Krenus”), an insurance licensee who was also the sole director, major shareholder and CEO of the Agency at the time. The policy number on this document is different from that on the Insurer One Document; the coverage dates, however, are the same, and indicate that coverage is effective from April 4, 2021, to April 4, 2022.

11. On January 17, 2022, Insurer Two provided Council with a copy of the authentic declaration pages. Insurer Two noted that the policy effective date is November 26, 2021, not April 4, 2021, and also noted several inconsistencies in the formatting and information in the Insurer Two Document.

12. Between February 10, 2021, and October 28, 2021, Insurer One made multiple requests for underwriting details pertaining to the Strata from the Licensee and the Agency.

13. Commencing on June 4, 2021, the Property Manager began asking the Licensee and/or Agency to provide the policy documentation and invoice in relation to the Insurer One Document. Subsequently,

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an invoice dated August 10, 2021, in the amount of $58,591 was sent to the Strata. A renewal payment agreement dated August 18, 2021, which referenced the premium owed, was also provided.

14. On September 8, 2021, the Licensee sent to the Property Manager a financing agreement dated August 18, 2021, on the Agency’s letterhead. The agreement stated that the total premium was $58,591, the initial payment was $5,059.33, the plan cost was $2,779.64, and that there were 11 monthly payments of $5,119.21.

15. On January 28, 2022, Council received a letter from the Property Manager, which indicated that although there had been a miscommunication between all involved, the Agency had taken responsibility and repairs for the water damage claim had been completed, and their relationship remained in good standing.

The Licensee’s and Agency’s Submissions to Council 16. In a letter to Council dated February 7, 2022, Krenus explained that the Agency had purchased Marquis on February 1, 2021, that there had been hundreds of files involved in the acquisition, and that the Strata’s renewal was missed due to a data entry error that resulted in the Agency’s broker management system showing the policy as renewed when it was not.

17. Krenus stated that it was not until July 2021, when the Property Manager sent an email to the Agency requesting policy documentation, that the error was brought to the Agency’s attention. In October 2021, Insurer One advised they were no longer willing to provide coverage because of the water claim.

18. Krenus also stated that he had demanded that the Agency’s E&O provider be notified, and in November 2021, while its E&O provider was investigating, the Agency managed to retain full coverage and terms from Insurer Two, which the Agency paid for with the premiums it had been paid by the Strata.

19. In a follow-up letter dated March 22, 2022, Krenus stated that the Agency had implemented a new three-tier approach for insurance renewals: the creation of a production report for the agents’ transactions, the creation of an expiry report to cross-reference any policies that might have been missed, and the review of billed accounts by the Agency’s accounting department.

20. On July 7, 2022, Council conducted an interview with the Licensee. The Licensee admitted that there had been negligence on his and the Agency’s part, and that he could have been more diligent in responding to inquiries from the Property Manager and from Insurer One. The Licensee went on to say that because of this situation, he had been reprimanded by the Agency and was now a Level 2 Agent working “9 to 5,” which had “professionally hindered” his growth in the insurance industry.

21. In relation to the several requests made by Insurer One for the underwriting details and why they were not provided, the Licensee responded that the Strata building had been built in 2019 and that Insurer

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One had been provided with appraisals at that time. He further stated that the information being requested would not have changed since the appraisal, and that this information had therefore already been provided to them.

22. The Licensee stated that Insurer Two had investigated this matter and had conducted an audit. Subsequently, Insurer Two terminated its contract with the Agency a er concluding that its declaration pages had been manipulated at the Agency before they were sent to the Strata.

Review Committee Meeting 23. The Licensee stated that he was first involved in the file in or around June 2021. At the time, the Licensee stated that the Agency’s broker management system initially showed the Strata had an active policy and the renewal was effective from April 2021 to April 2022. He claimed he was not actively involved with strata matters at the time

24. The Licensee stated that he later realized that the policies in the Agency’s system were for the previous year, prior to the April 2021 to April 2022 term. He claimed that the policies were incorrectly uploaded by another employee at the Agency. The Licensee stated that the Agency was responsible for entering the Marquis files, which were primarily paper based, into its broker management system.

25. He told the Committee that an underwriter at Insurer One confirmed that they were holding coverage in or around August 2021, which he interpreted to mean that there was coverage in place, albeit at an unknown percentage. The Licensee said the Agency considered that it had arranged sufficient coverage for the Strata and proceeded to issue the invoice and the payment agreement.

26. When the Strata submitted its water damage claim, the Licensee stated that he realized that there was no coverage in place. At this time, the Licensee told the Committee that he “shut down” a er receiving a flood of inquiries from various stakeholders. He stated that he stopped going to the office, turned off his phone and did not respond to inquiries.

27. The Licensee stated that he did not create the Insurer Two Document. He said that he could not confirm who had created and issued the document, as he was not involved. The Licensee told the Committee that the E&O policy would act as a partial insurer and provide interim coverage for the Strata. He reiterated the emotional and physical toll that the incident had on himself and other Agency employees. The Licensee also explained that the Agency had changed to a new broker management system and had begun to conduct monthly training sessions with its staff and monthly audits of its files.

ANALYSIS 28. Council considered the impact of Council’s Code of Conduct (the “Code”) on the Licensee’s conduct, including section 3 (“Trustworthiness”), section 4 (“Good Faith”), section 5 (“Competence”), section 6

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(“Financial Reliability”), section 7 (“Usual Practice: Dealing with Clients”) and section 8 (“Usual Practice: Dealing with Insurers”). Council concluded that the Licensee’s conduct amounted to clear breaches of the aforementioned sections of the Code and professional standards set by the Code. In addition, Council concluded that the Licensee breached Council Rule 7(2), which requires licensees to not use funds collected or received on behalf of an insurer for reasons other than as described in their agreement with the insurer, and Council Rule 7(9), which requires that licensees keep proper books, records and other documents. Further, licensees are required by Council Rule 7(8) to comply with the Code.

29. Council found that the Licensee’s decision to ignore questions from the Strata, the Property Manager and Insurer One reflected adversely on his trustworthiness. In addition, the Licensee did not display professionalism and reliability when he stepped away from the incident. Council found that the Licensee intentionally misled the Strata and the Property Manager by failing to disclose that the Strata was uninsured and that documents were falsified.

30. Following the above, Council concluded that the Licensee breached the principle of good faith. Council found the Licensee to be credible in his responses to the Committee. However, the Licensee was the lead broker of the Strata’s file and would be expected to respond to client inquiries. By failing to respond honestly and in a timely manner, the Licensee did not act in good faith to the Strata and the Property Manager.

31. Council concluded that the Licensee had failed to engage in the usual practice of the business of insurance and had displayed an overall lack of care. Council found that the Licensee breached Council Rule 7(9). Council was also concerned that the Licensee had failed to understand that E&O coverage only applies to individual claim incidents.

32. Council concluded that the Licensee was not financially reliable as premiums were collected from the Strata when the policy had not been bound. Further, there was no evidence to suggest that Insurer One consented to the issuing of the invoice and subsequent collection of premiums. In that regard, Council found that the Licensee breached Council Rule 7(2).

33. Council found that the Licensee breached the “Usual Practice: Dealing with Clients” principles, as required by section 7 of the Code of Conduct. The Strata was not notified that its policy renewal had been missed and that it was uninsured. Council believed that a reasonable and prudent licensee would disclose the same with no delay. While Council acknowledged the Licensee’s efforts to address the missed renewal, Council noted that the Licensee failed to keep the Strata informed and updated throughout the negotiations with the insurers.

34. Council determined that the Licensee breached the “Usual Practice: Dealing with Insurers” principle, as required by section 8 of the Code of Conduct, by failing to provide full and accurate information regarding the underwriting details to Insurer One. Council was troubled at the Licensee’s assertion that the underwriter was holding cover. Nevertheless, the Licensee did not know the amount of cover that was being held. By issuing false documentation which named the insurers, the Licensee did not

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adhere to the authority granted by the insurer and failed to represent the insurers’ products fairly and accurately.

PRECEDENTS 35. Prior to making its intended decision, Council took into consideration the following precedent cases. While Council is not bound by precedent and that each matter is decided on its own facts and merits, Council found that these decisions were instructive in terms of providing a range of sanctions for similar types of misconduct.

36. Accost Insurance & Financial Centre Inc. and Nagdip Dhindsa (June 2022): concerned a failure by an agency to provide adequate notice to a client of a policy cancellation, and a failure to properly document communications and instructions from a client. The client had a homeowner insurance policy that contained a roof exclusion. The client became upset with the agency when he was denied a roof claim due to the roof exclusion clause in the policy and stated that he would not conduct further business with the agency; however, the agency was unable to provide any documentation that referenced the client’s verbal statement. The agency failed to provide information received from the insurer pertaining to renewal terms. Instead, the agency provided the client with notification of the cancellation of coverage 14 days before the coverage ended. The policy eventually lapsed. Council found that the agency had failed to provide adequate notice to the client of the policy cancellation and had failed to properly document communications and instructions from the client. Council concluded that there was an inadequate level of supervisory oversight by the agency as well as the nominee. However, Council found the breaches to be unintentional. The nominee and agency were reprimanded. Council required the nominee to complete the Council Rules Course and assessed the agency investigation costs.

37. Troy Wotherspoon Insurance Services Ltd. and Lung Hwa (Andy) Tan and Troy John Wotherspoon (May 2020): concerned a failure by an agency to bind a storage insurance policy for a client. The client had submitted an application for a storage insurance policy to the agency and a er receiving a quote from an insurer, the client had instructed the licensee handling the file to move forward with the policy. The licensee placed the application with the client’s credit card information on a colleague’s desk with instructions to bind the quote and process the payment. A er the client contacted the licensee to file an insurance claim, the licensee discovered that the policy had never been bound or had its payment processed. The nominee took action and was successful in convincing another insurer to reinstate and backdate the homeowner’s coverage that the client previously had. The client was paid the policy limit on the homeowner’s coverage. Council concluded that both the licensee and the nominee had failed to notify the client that the agency had failed to bind the storage insurance policy. Council was troubled by the inappropriately casual approach of the agency towards the handling of client information, and in particular, the client’s credit card information. Further, Council had concerns that the agency lacked appropriate procedures and a commitment to best practices, as it did not appear that the incident with the client had resulted in the development of new policies at the agency or had induced changes to work practices. Council fined the licensee and nominee $1,500 each, fined the

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agency $2,000, required the licensee and nominee to complete the Council Rules Course and an errors and omissions course, and assessed the agency investigation costs.

38. The Whistler Shoppe Ltd. dba The Whistler Insurance Shoppe and Peggy Kathleen Johannson / Tina Suzanne Jang (April 2016): concerned an error occurring at an agency that resulted in a client’s insurance policy not being renewed upon expiration. Due to a change in a program, the agency had a list of policies that had to be re-marketed with a new insurer and manually renewed. The licensee responsible for processing the renewals failed to complete the renewal for a client who subsequently suffered a loss. Council concluded that the licensee’s failure was an administrative error that did not reflect on her overall ability to act competently and in accordance with the usual practice of the business of insurance. Council was more concerned by a lack of proper administrative and financial procedures being in place at the agency and with the nominee’s failure to provide appropriate oversight. Council required the licensee to complete an errors and omissions course. Council fined the nominee $2,500, required her to complete the Level 3 seminar, and put a condition on her licence limiting her to being the nominee for a maximum of two agencies, unless there is a full-time Level 3 general insurance agent in regular attendance at every agency for which she is a nominee. Finally, Council fined the agency $5,000, assessed it investigation costs and required the agency to have a full-time Level 3 general insurance agent in regular attendance.

39. Tarlok Singh Chandi (December 2016): concerned a Level 2 Agent licensee who altered insurance documents on two occasions and provided them to a client in an attempt to prevent the client from moving its insurance business elsewhere. The licensee altered an insurance document by changing the policy number and altered the interim cover note for another policy. The client’s insurance coverage was not affected. Council found that the licensee had failed to act in good faith and in accordance with the usual practice of the business of insurance by creating false insurance documents. Council accepted that the licensee was remorseful and that he did not intend to harm the client. However, Council noted that the licensee had extensive experience as an insurance agent. Council determined that the principles of general and specific deterrence could be better served through the assessment of a significant fine, a period of supervision and a requirement to complete specific education. Council fined the licensee $10,000, required the licensee to be supervised by a Level 3 general insurance agent for two years, required the licensee to complete an ethics course and the Council Rules Course, and assessed the licensee investigation costs.