Alberta regulator levies $105,000 fine for taking client funds

A decision handed down by the life insurance council of the Alberta Insurance Council to fine former agent Juan Saavedra $105,000 for redeeming client’s funds into his own personal bank account, indicates that the regulator would have also revoked Saavedra’s certificates of authority if he were still actively authorized to do business in the province.

Licensed periodically between November 2008 and November 2021 when he was terminated by his former agency, Saavedra was first found out when one client indicated that redemptions in their account were not authorized and that the bank account information listed in their account was not their own. An investigation concluded that the banking information on the account, indicating where the funds were to be redeemed, had been changed and that client signatures appeared to be different from those that appeared on the initial application documentation.

In an agency interview, Saavedra reportedly admitted taking the money from the client’s account and admitted to another instance of misappropriating funds from another client’s Tax-Free Savings Account (TFSA). After the firm ran queries to identify other accounts where banking information was updated to show Saavedra’s own banking information, four other clients who were impacted were also identified.

The agent reportedly did not respond to requests for information from the council or to the report issued ahead of the council’s decision.

“As to the amount of the civil penalty, the council is of the view that the agent’s conduct was self-serving, as it was deliberate and without any consideration to the risk he was subjecting his former clients to, and therefore, a significant civil penalty is warranted. As such, the council orders a civil penalty in the amount of $5,000 per offence, resulting in 21 offenses, equaling a total civil penalty of $105,000 be levied against the agent,” the council states in its decision. “If the agent had held active certificates of authority, the council would have exercised their authority to revoke the agent’s certificates of authority.”