CONSENSUAL AGREEMENT AND UNDERTAKING (“Agreement”)
Between
THE MARKET PRACTICES COMMITTEE (“Committee”) of THE LIFE INSURANCE COUNCIL OF SASKATCHEWAN (“Council”)
And Kim Safronetz Financial Services Ltd. (“Agency”)
The Agency, through its designated representative Kim Safronetz (“DR”), acknowledges and agrees that it received the Notice regarding a proposed action pursuant to Section 10-11 of The Insurance Act (the “Act”), and the reasons therefor, from Council, dated October 4, 2021. The Agency acknowledges and agrees that it is guilty of misconduct by violating the Act and Council Bylaws as follows: The Act, Section 5-26 Financial security required for insurance intermediaries
(1) Every business and individual that applies for or holds an insurance intermediary’s licence shall meet and maintain the prescribed financial security requirements.
Regulation 5-10 Financial security – insurance intermediaries and adjusters
(1) For the purposes of subsections 5-26(1) and 5-47(1) of the Act: (a) every business that applies for or holds an insurance agent’s license for life, accident and sickness, or life and accident and sickness insurance shall maintain and provide annually proof of a valid policy of errors and omissions insurance that:
(i) provides a minimum of: (A) $1,000,000 coverage with respect to any one occurrence and a minimum aggregate limit of $1,000,000 with respect to all occurrences within a year; and
Consensual Agreement and Undertaking Kim Safronetz Financial Services Ltd.
(B) (ii) covers the insurance activities of the licensee; and (iii) is underwritten by an insurance company licensed to do business in Canada;
$1,000,000 extended coverage for loss resulting from fraudulent or dishonest acts;
Bylaw 3-1 Licences and obligations
(4) A licence imposes on the licensee, and if a business, the designated representative, obligations including but not limited to, the following:
(c) to immediately notify [Council] of: (i) the failure to maintain the prescribed financial security requirements (errors and omissions insurance or the bond), pursuant to sections 5-10 and 5-23 of the regulations;
Bylaw 4-1 Professional misconduct
(1) For the purposes of the Act, the regulations and these bylaws, professional misconduct is a question of fact but includes any matter, conduct or thing, whether or not disgraceful or dishonorable that: (c) is a breach of the Act, the regulations or these bylaws.
(2) Without limiting the generality of subsection 4-1(1), a licensee may be guilty of misconduct if the licensee: (k) makes a material misstatement in an application for license or report to continue a license, pursuant to clauses 5-39(1)(a) and 5-64(1)(a) of the Act;
The DR of the Agency made a material mis-statement when she Declared on the March 6, 2021 ARF that the Agency maintained a valid policy of E&O insurance when in 2020 the Agency had a gap in coverage for 16 days, from June 1 to June 17, 2020.
The DR of the Agency acknowledges and agrees that: a. The Agency’s right to make a written submission to, or appear before the Committee at an oral hearing to make representations, as to why this action should not be taken, has been explained to her and that she fully understands the Agency’s rights and/or obligations. b. The Agency waives its right to make a written submission to the Committee or to appear before the Committee at an oral hearing and chooses to resolve this matter by way of this Agreement and accordingly waives any right of appeal with respect to this action.
2
Consensual Agreement and Undertaking Kim Safronetz Financial Services Ltd.
c. This Agreement does not preclude Council from pursuing any other investigation and/or sanctions against the Agency for activities not identified in this Agreement that may be in violation of the Act, The Insurance Regulations (“the regulations”) or Council Bylaws. d. The Agency has been advised that it is in its best interest to obtain independent legal advice before entering into this Agreement. The DR of the Agency has either: i. obtained such independent legal advice prior to executing this Agreement; or, ii. has willingly chosen not to obtain such advice prior to executing this Agreement. e. The DR hereby affirms that she has read and understands the terms of this Agreement and that she is signing it voluntarily on behalf of the Agency. The Agency having waived its rights, accepts and undertakes to fulfill the sanctions imposed by the Committee as follows: 1. Pay the following: a. a fine in the amount of $1250.00 and b. costs of investigation (5 hours x $110) in the amount of $550.00.
2. To pay the fine and costs of $1800.00 within 30 days from the date of this Agreement.
The Committee’s Agreement: 1. Upon fulfillment of the sanctions imposed, the Committee agrees this to be the full and final resolution of the violations of Council’s Bylaws by the Agency as outlined in this Consensual Agreement and Undertaking
Originally signed by Kim Safronetz October 6, 2021 ________________________________________________________ _______________________________________ Signature of DR or authorized official for Kim Date Safronetz Financial Services Ltd.
Originally signed by Grant Laube for: October 6, 2021 _______________________________________________________ _______________________________________ THE MARKET PRACTICES COMMITTEE Date Life Insurance Council of Saskatchewan
Consensual Agreement and Undertaking Kim Safronetz Financial Services Ltd.
Penalties affecting insurance intermediary’s licence
5-39(3) If a penalty imposed against a holder of an insurance intermediary’s licence pursuant to subsection (2) is not paid within 30 days after the holder is served with the written notice of the penalty and the decision of the Superintendent is not appealed, the licence is automatically suspended immediately following the last date for paying the penalty or appealing the decision, whichever is later, and remains suspended until the penalty is paid or the licence expires.