FSRA enforces penalties on former insurance agents

According to the FSRA, the three misused the personal information collected from students to apply for insurance policies – often without the students’ knowledge. The three also claimed to the students that purchasing life insurance was a mandatory condition for employment. It was noted that the agents made no effort to determine if the insurance policies were suited to the needs of the students, who had no stable income and were living in Canada temporarily through study permits.

“What the three former insurance agents did to these students is egregious and completely unacceptable and our enforcement action should send a clear message that this kind of activity will not be tolerated,” said FSRA director of litigation & enforcement, legal enforcement Elissa Sinha. “FSRA is committed to protecting consumers purchasing insurance and ensuring that regulated individuals and companies uphold the required standard of conduct.”

A release said that the FSRA issued this order following a settlement with the three, who are no longer licensed under the Insurance Act. Each of the agents has been imposed administrative penalties between $15,000 and $55,000.

In October, the FSRA proposed to impose a compliance order on the life insurance managing general agent Greatway Financial, for training its agents to sell universal life insurance policies as of they were “insured retirement plans.”

According to the regulator, IRPs can be successful through continued and retained contributions, but are only suited for higher net-worth individuals who can make those regular contributions. FSRA went on to accuse Greatway of misrepresenting universal life policies and IRP strategies as “savings” instead of insurance.