The Insurance Council of British Columbia (ICoBC) is sanctioning Richard Neil Martens, fining Martens $3,000 for selling an unsuitable policy. He was also ordered to complete remedial education – six courses including the Council Rules Course, fact-finding and suitability compliance courses and three on ethics. He is prohibited from being a supervisor for six months and was also ordered to pay the council’s investigation costs totalling $1,650.

First licensed as a life and accident & sickness insurance agent in May 2015, Martens was reported by an insurer in July 2024 for policies sold in December 2020. At the time, he sold the complaining client a $250,000 universal life (UL) policy, a $250,000 term 20 life policy and an $80,000 critical illness policy.

In December 2022, when she was in between employment, the client stated that she began to have questions about the UL policy. In a January 2023 meeting, she says her questions were not answered and that the agent was focused on the policy’s cash value. She also had questions about why her premiums were set for $200 a month and claimed she did not realize that she was over contributing when she purchased her policy.

Insurer issued full refund 

The insurer determined that the product was unsuitable, the contract was terminated, a full refund was issued to the complainant and Martens’ commissions were revoked, although the agent was able to keep close to $1,000 in commissions. This was later noted as an aggravating factor in the case. 

During the course of the investigation, Martens was asked why he indicated that the client had advanced-level knowledge about investments when she had not purchased any investments prior to the application for the UL policy. It was found that the licensee believed that the financial information he provides in general education meetings lasting between four and six hours with clients, “so clients can make an informed decision,” was sufficient for the agent to indicate that the complainant had advanced investment knowledge.

The sales presentations in question included information about insurers that have not been in business since 2015 and additionally promised 15 per cent returns, which the council found to be misleading. 

“Additionally, when questioned about the complainant’s ability to afford the recommended $200 premium, the licensee stated that the funding of the policy was based on a combination of the complainant’s savings and income,” the intended decision in the case states. The insurable need was based on the client’s desire to buy a house in the future, despite the fact that the client had negative monthly cash flow resulting in a monthly shortfall of $1,030. “Council did not believe that adding a $200 monthly expense to an already negative monthly cash flow was appropriate,” they write. Similarly, they add that “using the complainant’s goal of homeownership and value of that dream home as a way to measure insurability is not the correct method to calculate an insurance need.” 

They continue saying based on an affordability analysis alone, the agent was not acting in the best interest of the client or in a competent manner when he recommended the policy in question. More, they add that an aggravating factor in the case is the fact that Martens maintains that the product was suitable and did not agree with the insurers’ decision to refund and cancel the policies.