The Insurance Council of British Columbia (ICoBC) has fined Dan Zhang $10,000, ordered the agent to complete remedial coursework and pay costs in the amount of $2,750 over allegations that Zhang loaned a client money and misrepresented a client’s financial information.
Licensed since 2009, the insurance council was informed by an insurer in February 2023 that the agent was under investigation for conflicts of interest, fraud and misrepresentation. The insurer, in its investigation, concluded that Zhang loaned a client, identified only as JG, $950,000.
“As a result, the insurer terminated the licensee’s contract on June 1, 2023. Council’s investigation was unable to obtain any evidence to support the allegation that the licensee knew or intentionally submitted false bank statements to the insurer’s bank division,” the intended decision in the case states. “The insurer stated that the licensee admitted to loaning the money to the client to obtain credit.”
Notably, JG did not make a complaint to the insurer or its banking division. It did not speak with JG during its investigation and no official transcript was made from the insurer’s interview with Zhang during its investigation. More, the insurer’s bank division was unable to produce any records showing a transfer of funds from Zhang to JG.
Through Zhang’s legal counsel, the council was informed that Zhang was not asked about the purpose of the loan and did not admit to lending money. It was also stated that Zhang was not offered the assistance of an interpreter, she could not fully understand the insurer’s questions and could not give her answers clearly in English. The lawyer admitted that his client loaned JG the money for one day for “short term personal use.” When asked why she had no contract in place regarding the loan, she stated that “it’s just part of Chinese culture.”
Licensed since 2009, Zhang was not aware of the conflict-of-interest guidelines in the council’s Code of Conduct.
Mitigating factors in the case included that Zhang acknowledged the misconduct, had remorse and participated in the investigation. Council also considered the licensee’s loss of commissions and contracts as a result of the complaint to be mitigating. (Zhang estimates that she is owed $227,000 from the insurer in unpaid commissions. As a result of her termination, she says another insurance company also terminated its contract with her.)
“Regardless of the cultural context or whether the licensee and JG were friends and agreed to the loan, the licensee should not have allowed the loan to occur,” the intended decision continues. “Regardless of the language confusion over the words ‘lender’ and ‘borrower,’ the licensee knew or ought to have known that the insurer’s bank division was assessing JG’s financial assets and trying to ascertain the source of recent deposits and that they required wholesome and truthful answers.”
The council adds that Zhang’s lack of disclosure to the insurer’s bank division about her involvement in the loan and being the actual source of the $950,000 also amounted to a misrepresentation or misleading statement to a financial institution.
In addition to the monetary penalty and costs, Zhang must also complete three ethics courses, the Council Rules Course for Life and/or Accident & Sickness Agents and be supervised for two years of active licensing.
