TORONTO, May 30, 2024 /CNW/ - Ontario's financial services regulator, FSRA, has taken enforcement action with respect to Industrial Alliance Insurance and Financial Services Inc. ("IA"), World Financial Group Insurance Agency of Canada Inc. ("WFGIA Canada"), and Gurpreet Singh Ghuman ("Ghuman").
Between October 8, 2021, and July 14, 2022, Ghuman, while unlicensed, acted as an insurance agent and advisor for Industrial Alliance and arranged 58 life insurance policies for clients. Ghuman was contracted with WFGIA Canada, a Managing General Agency. IA relied on WFGIA Canada to ensure that Ghuman was licenced.
"Consumer protection is a collaborative effort and we expect industry to do their part," said Elissa Sinha, Director of Litigation and Enforcement at FSRA. "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. We appreciate IA and WFG's cooperation in immediately resolving this matter."
FSRA is proposing to impose an administrative penalty in the total amount of $80,000 on Ghuman for acting as a life insurance agent while not being duly licensed, contrary to 392.2(6) of the Insurance Act, R.S.O. 1990, c.I.8, as amended (the "Act"). Ghuman has requested a hearing before the Financial Services Tribunal about this proposal.
IA and FSRA have entered into a settlement to resolve the enforcement action. As part of the settlement, FSRA has imposed administrative penalties in the total amount of $115,000 against IA:
a. $65,000 for contravening section 403(1) of the Act for paying commissions, indirectly through WFGIA Canada, to Ghuman for the solicitation and/or placement of insurance policies while he was not licensed as an insurance agent; and
b. $50,000 for contravening section 12(1) of Ontario Regulation 347/04 by 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 license.
FSRA has also imposed an administrative penalty in the total amount of $50,000 on WFGIA Canada for paying compensation to Ghuman 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(1) of the Act. WFGIA Canada did not request a hearing in respect of FSRA's proposal.
Access our enforcement database to see how FSRA is working to protect consumers through its monitoring and enforcement activities.
Ashley Legassic
Acting Sr. Manager, Media Relations
Financial Services Regulatory Authority
C: 647-719-8426
Email: [email protected]
SOURCE Financial Services Regulatory Authority of Ontario
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