The Financial Services Regulatory Authority of Ontario (FSRA) has fined two firms in connection to a man who allegedly acted as a life insurance agent without the necessary licence, the regulator said Thursday.
FSRA said the person was contracted with World Financial Group Insurance Agency of Canada Inc. (WFGIA Canada) and acted as an insurance agent and advisor for Industrial Alliance and Financial Services Inc. (IA) between October 2021 and July 2022.
The person arranged 58 life insurance policies for clients during that period, the regulator said, but was allegedly unlicensed at the time. FSRA added that IA relied on WFGIA Canada to ensure that the individual was licensed.
The allegations have not been proven.
FSRA fined WFGIA Canada and entered a settlement with IA.
FSRA has imposed a penalty of $50,000 on WFGIA Canada for paying compensation to the individual “for the solicitation and/or placement of insurance policies while he was not licensed as an insurance agent, as IA’s agent,” contrary to section 403 of the Insurance Act.
WFGIA Canada withdrew its April 2023 request for a hearing in response to FSRA’s proposal after reaching an agreement with the regulator.
As part of the agreement, WFGIA Canada said it will establish an independent supervision team to conduct reviews to assess agent compliance.
Meanwhile, IA is facing $115,000 in penalties.
This includes $65,000 for contravening section 403 of the Act for “paying commissions, indirectly through WFGIA Canada, to [the individual] for the solicitation and/or placement of insurance policies while he was not licensed as an insurance agent.”
IA must also pay $50,000 for contravening section 12 of Ontario Regulation 347/04 for “failing to establish and maintain a system that is reasonably designated to ensure that each of its agents complies with the Act, the regulations, FSRA rules, and the agent’s licence.”
FSRA is also proposing a penalty of $80,000 on the person who allegedly acted as a life insurance agent while unlicensed. The individual has requested a hearing before the Financial Services Tribunal.
FSRA said it appreciates IA and WFGIA Canada’s co-operation in resolving the matter.
“Consumer protection is a collaborative effort and we expect industry to do their part,” said Elissa Sinha, director of litigation and enforcement at FSRA, in a release. “As such, insurance companies must have a system of compliance to reasonably ensure that agents selling their product are licensed and comply with the Act, the regulations and FSRA rules.”