Ontario’s Financial Services Regulatory Authority (FSRA) has announced that it has initiated enforcement action against a life insurance agent for his purported misleading statements and fraud.
The regulator alleges that Sudeep Sharma made false or misleading statements in soliciting or registering insurance. FSRA additionally alleges that Sharma knowingly procured his clients’ insurance payments. FSRA has proposed revoking the license of Sharma, as well as imposing three administrative penalties on the agent totalling $35,000.
Sharma is licensed as a life, accident, and sickness insurance agent. At the time of his alleged fraud, he was an agent employed by RBC.
RBC began investigating Sharma’s actions in May 2020 after receiving a complaint from a policyholder that a new insurance policy had been opened in her name without her knowledge or consent. As a result of the investigation, the insurer later filed a form on Sharma to the FSRA, and the insurer subsequently terminated Sharma’s employment for cause on September 16, 2020. In the Life Agent Reporting Form it submitted to the FSRA, RBC indicated that it had evidence that Sharma had engaged in forgery, improper paperwork, misrepresentation to the insurer, and lack of trustworthiness.
The FSRA launched its own investigation after reviewing RBC’s evidence, interviewing Sharma and his clients. It found that Sharma was placing both current and former clients for additional life insurance policies without their knowledge and consent. For some clients, the agent placed them with disability insurance policies without explaining that by doing so, it would put existing universal life policies on hold – all while using the premiums his clients paid for universal life policies to pay for the disability insurance.
It was also found by the FSRA that Sharma signed his clients up for new insurance policies while altering the premium payments of their existing insurance policies, without the knowledge or consent of his clients. He placed some of his clients’ existing universal life policies on a premium vacation, which allowed him to use the accumulated savings to pay for the premiums owed on the new policies he “sold” his clients without their knowledge. FSRA suggested that Sharma engaged in these activities for greater variable compensation.
A release from the FSRA stated that Sharma may request a hearing before the Financial Service Tribunal.
