The Insurance Council of British Columbia has fined the BCAA Insurance Agency Ltd. $10,000, citing multiple occasions when the large Western agency did not give required notice to the regulator that broker licensees no longer represented the agency.
BCAA has more than 400 insurance licensees and approximately 600 employees in B.C. It has been continuously licensed with council since July 2010. The agency operated under a previous licence, BCAA Holdings Ltd. (BHL), between 1983 and July 2010.
Council sent BHL five reminder letters between February 2006 and June 2007 regarding BHL’s failure to notify the regulator within five business days that a licensee no longer had authority to represent it. Furthermore, between December 2011 and May 2012, the BCAA had failed to notify Council of 12 other occasions when licensees no longer had the authority to represent the agency.
“Despite these reminders, council found no evidence to suggest the agency took any steps to implement sufficient procedural or system changes to ensure its compliance with this requirement,” the council wrote in its intended decision. “Council determined that the agency's failure to address this matter represented a blatant disregard for its obligations under council rules.”
BCAA could not be contacted prior to press deadline. It is unknown whether the decision has been appealed.
Council’s decision observed that the agency had two different nominees since the beginning of its licence in July 2010.
BCAA’s current nominee told council that the agency's individual branch offices were responsible for notifying council when a licensee ceased to represent the agency.
After the nominee identified an issue with this system of notification, she issued a recommendation to the agency's senior managers outlining how to address the agency's failures to notify council. This recommendation came approximately two months after she became the agency's nominee.
“Based on the agency's submissions, council believes [BCAA] appears to be in the process of implementing changes to prevent similar situations from arising in future,” council wrote. “However, it did not find that this mitigated the agency's past notification failures.”
Council considered fines in the range 0f $2,000 to $5,000, and ultimately decided that a $10,000 fine would be appropriate.
“The extent of the [BCAA’s] failure to meet the notification requirement and the absence of any corrective measures being implemented by the agency, despite having numerous opportunities to do so, was concerning to council, particularly given the agency's size,” Council ruled.
“As a consequence, council determined that a significant penalty was required [that] would be meaningful to the agency and would stress to all licensees the importance of compliance with the requirements under council rules.”
