The Life Insurance Council of Manitoba has fined 54-year industry veteran, Grant Edmond Wilson $1,250 plus investigation costs of $1,000, after Wilson completed a life insurance application for replacement life insurance, on behalf of a client he’d never met.
After receiving information from an insurer alleging that Wilson had never met with the insured, the council found that Wilson failed to complete two separate replacement documents for the client, including a Life Insurance Replacement Declaration (LIRD) and a written explanation of the advantages and disadvantages of replacing the existing policy – also known as a Written Comparative Analysis (WCA) – prior to selling the policy. Although Wilson completed a LIRD for the client, it was completed more than two months after the application was made.
During the course of the council’s investigation, Wilson admitted that he never met with the insured, that he does not know the insured, he did not complete a full needs analysis or discuss the replacement of her life insurance, and did not meet with the insured to ask questions about the application. To complete the LIRD, Wilson relied on personal and policy file information collected by her husband and another agent. He also relied on the LIRD as a policy comparison and never met with the insured to complete a WCA.
Among its list of concerns, council points out that underwriting information on the application could be incorrect or incomplete, which could lead to a denial of a future claim, possibly leaving the client’s beneficiary in a vulnerable position.
“The notion that the licensee positively affirmed that the application was correct and complete and that the owner/life insured understood the questions asked on the application is antithetical to the logical circumstances of this case, as he does not know, has never met, and did not speak with the client,” say the decision’s authors.
According to the decision, in doing so, Wilson violated several sections of the Insurance Act, including sections pertaining to unfair or deceptive acts or practices, misrepresentation, incompetence, untrustworthiness and sections of the agent’s code of conduct pertaining to the interest and needs of the client, professionalism and general information disclosure.
“The licensee acknowledged that it was unethical to replace a consumer’s life insurance without ever speaking with the consumer; he failed to provide adequate disclosure to (the insured) at the time of the application, as the LIRD was completed months subsequent to the application. An agent has the responsibility to ensure that the client is fully informed of all relevant information before the client makes a decision, and this disclosure must be properly documented.”
