The Canadian Association of Insurance and Financial Advisors plans legal action against Toronto-based Barber Stewart McVittie & Wallace, the former broker for its errors and omissions insurance plan.
The dispute involves the plan, CAIFA’s decision to end its relationship with BSMW, and the recent decision by St. Paul Fire and Marine Insurance Company to terminate E&O coverage for 7,500 CAIFA members and non-members.
CAIFA executives later argued that they had signed a better, though more expensive deal with Employers Reinsurance Corp.
At an information session, BSMW chief executive officer Glenn Wallace argued that St. Paul’s would have renewed CAIFA’s coverage with an increase of “10% or less”, an assertion CAIFA says remains unproven.
“The statements and subsequent comments have called CAIFA’s reputation into question and have even degenerated into questions about the integrity of CAIFA’s senior staff,” said Steve Howard, CAIFA chief executive officer at a press conference held this afternoon to announce the decision.
The parties disagreed on access to claims records, an argument that became another trigger, as CAIFA alleges that Wallace’s refusal to provide records became a breach of fiduciary duty.
The announcement marks the strongest language to date in this dispute. “Having lost the account, he (Wallace) now attempts to besmirch the integrity and character of CAIFA by making false and unsubstantiated assertions,” argued CAIFA Treasurer Brian Mallard in a prepared statement read by Howard.