The General Insurance Council of Manitoba has reversed its decision to fine James McGregor $10,000 and has instead fined the agent only $100 plus partial investigation costs of $5,000 after it found that McGregor allowed an employee to conduct unlicensed activities.
McGregor also submitted inaccurate information to insurers and misrepresented his disciplinary history when renewing his licenses.
The council commenced an investigation to determine whether McGregor’s actions were a violation of that province’s Insurance Act, after he allowed an equipment dealership, an unlicensed Manitoba entity, to act as an agent selling his agency’s Guaranteed Asset Protection (GAP) insurance program, and allowed an employee of that agency, who has never held a Manitoba insurance license, to sign a consumer’s insurance application as the broker.
McGregor also failed to review all relevant information on an application, to ensure that the coverage was sufficient for the financing term stated on the customer’s conditional sales contract. In filling out the application in question, the dealership made an error, noting that financing was in place for a 60-month term when in fact the clients had signed up for a 96-month term.
In January 2019, the vehicle insured under the GAP policy sustained a total loss and the insurer settled the complainant’s claim based on a 60-month coverage term, “which resulted in a zero indemnification and left the complainants with an outstanding balance,” the council’s decision states. “The licensee failed to obtain the conditional sales contract from the dealership and compare the coverage term with the amortization period to ensure the application had been completed accurately by having an equivalent term and period.”
Then, despite having received a letter from another provincial regulator indicating that he and two of his agencies were under investigation, McGregor then submitted new licensing applications which did not disclose that he was being investigated.
Following the hearing, McGregor exercised his right to dispute the council’s intended decision, only to request that the fine and costs imposed in the intended decision be waived on compassionate grounds, “in light of certain health challenges faced by the licensee.” McGregor asserts that the determinations made by council in its decision arose from innocent representations. He also says the compliance failure arose primarily because he relied on incorrect advice from an insurer.
“Only the extraordinary personal circumstances of the licensee – which arose after the intended decision was communicated to him, have caused the fine and costs to be reduced from the originally intended amounts of $10,000 and $5,000 respectively,” the council writes.
