A decision of the General Insurance Council with the Alberta Insurance Council has found that an Alberta car dealership, Car Farmers, intentionally failed to remit premium payments it collected on behalf of a warranty provider, despite being contacted 22 times by the warranty provider in an attempt to collect the outstanding premium amounts.
The 17 warranties in question were sold by Car Farmers between June and October 2021. In November, the warranty provider suspended the dealership’s ability to sell. In January 2022 it advised the complainant who first reported the car dealership, that all warranties sold by the dealer would be honoured regardless of payment status.
In reviewing the insurer’s efforts to collect the missing payments, the council states that materials presented demonstrated that the agent acted in a dishonest, deceitful, fraudulent and untrustworthy manner. “Despite the knowledge that the dealership did eventually make full payment of the outstanding premium amount to the warranty provider, it is the council’s opinion that the dealership knowingly and intentionally failed to remit premium payments.”
In this case the insurance council levied the highest possible penalty – $5,000 per demonstrated offense. All told, the dealership was ordered to pay a civil penalty of $85,000.
