Former agent fined for processing business without client authorization

Former life and accident & sickness insurance agent, Ronnaellee Vestby is being fined by the Life Insurance Council of Manitoba after transferring ownership of a client’s policy to herself, and for submitting applications for life insurance and critical illness insurance on behalf of the consumer without obtaining proper signatures.

On the agent’s licensing renewal application, Vestby falsely indicated that she was being investigated by her insurer for transferring a policy unwillingly to a client who’d paid for the policy for two years. Within four days of submitting the renewal application, Vestby resigned. It was then determined that the insurer had conducted a review of Vestby’s business after receiving a complaint from the consumer in January 2023.

In the complaint, the consumer alleged that she had not signed transfer of ownership forms, changing the ownership of her policy to the former licensee, change forms reducing coverage for her life and critical illness policies, or the new applications for life insurance and critical illness insurance.

During the course of the investigation, the council’s investigators provided Vestby with examples of the client’s signature and asked why they did not match the signatures found on the forms. Vestby did not respond to the inquiry. Her position on questioning was that she received an email from the insurer indicating that the consumer’s policies were going to lapse due to non-sufficient funds (NSF.) In truth, only the client’s critical illness policy was due to lapse.

“Concerned that the policies would lapse, she transferred the ownership of the consumer’s policies into her name, then reduced the face value of the critical illness policy,” the decision states, “so that the consumer ‘would not lose everything.’” She then submitted the new applications to ensure the client would have sufficient funds to pay off debt and changed the consumers’ four policies to ensure the policies would be affordable, “as it was her intention to pay all the premiums on behalf of the consumer.” 

Upon learning the consumer wanted her policies returned, the former licensee reportedly contacted the insurer immediately and the coverage was reinstated. The consumer was also offered compensation by the insurer.

The former agent was fined $500 and ordered to pay investigation costs in the amount of $3,600. In addition, Vestby must successfully complete an ethics course approved by the council.