Former agent fined $6k for failing to remit client premiums

Under a decision made by the general insurance council of the Alberta Insurance Council, former general agent, Kenneth Moland will pay civil penalties totalling $6,000 after he failed to remit premiums to an insurer, despite advising his client that the funds were transferred.  

The insurance council commenced its investigation into Moland’s conduct in response to a complaint received from his client in April 2019. At the time, the client explained that his policies had been cancelled for nonpayment, despite the fact he made payment several months prior. Calls to his broker went unanswered, while calls to the broker’s office were met with the message that the number was no longer in service.  

During its investigation, the council served the agent with a demand for information, including an explanation of where the funds were held and what they were being used for. Moland did not respond to the demand, or to the council’s demand with an extended deadline. Moland later claimed that he did not receive the email, or the registered letter sent by investigators. “With the passage of time and the winding up of (my former agency), I am without a memory of (the client) or this policy,” Moland wrote in response to reports prepared during the investigation. “Perhaps I could have been of assistance had I been contacted earlier,” he adds, saying that his records are with the firm that purchased his former agency before terminating him in early 2020. Part of Moland’s $6,000 fine included $1,000 for refusing to answer the council’s demands for information.  

“The council finds that the agent was, at the very least, willfully reckless or negligent in failing to remit the client’s premiums to the insurer. Moreover, the Act is clear that premium funds are to be held in trust until remitted to the insurer. As the insurer has attested, the client’s premiums were never located,” the insurance commission writes in its decision, adding that it would have exercised its authority to revoke the agent’s certificates of authority were he still licensed in the industry. “The council is satisfied that in absence of evidence to the contrary, the agent has used or applied the premiums for a purpose other than delivering the funds to the insurer. The council believes this demonstrates fraud, dishonesty, untrustworthy and deceitful conduct.”