The Life Insurance Council of Manitoba has issued a decision in a case regarding the Canadian Imperial Bank of Commerce (CIBC), after the bank successfully challenged the regulator’s earlier intended decision finding the company incompetent when it failed to forward 10 business and farm loan insurance applications to an insurer over the course of 13 months.

“CIBC acknowledged through counsel that an error had been made by it. It did not dispute the finding of responsibility, or the intended fine and costs. Its concern was with the basis of the decision, especially the finding of incompetency,” the decision states.

Self-reported to regulator 

The original intended decision stems from the company self-reporting to the regulator and to the Financial Consumer Agency of Canada that a staff transition led to certain reports not being reviewed between January 2019 and February 2020. “The affected consumers did not receive confirmation of approval or denial of insurance and the insurance premiums were not charged,” they write. “It was the accountability of one employee to review and action the daily report.” 

On a monthly basis, a quality assurance team member was also supposed to verify the reporting, with a senior director reviewing the report quarterly. In the initial intended decision, they say council recognized that CIBC had since implemented measures to monitor future oversights, but the council felt that the measures “did not absolve CIBC from the past violations that had occurred.” 

Following a virtual show-cause hearing, the regulator did an about-face, agreeing that “a solitary mistake or failure in communication of a policy requiring the review of a list does not warrant a determination of incompetency,” they state. The regulator then fined CIBC $2,000 and assessed costs in the amount of $2,000.