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Regulator continues to sanction agents linked to vehicle export market

By Kate McCaffery | March 21, 2025, 10:55 a.m.

Photo: Adobe Stock

The Insurance Council of British Columbia is continuing to hand out sanctions related to a May 2021 production order, wherein it ordered the Insurance Corporation of British Columbia (ICBC) to produce records from July 2018 until May 2021 in cases were agencies or licensees placed more than 40 one-year policies on newer vehicles that were subsequently cancelled and transferred within 30 days.

As in previous cases, the decisions are related to the issuance of ICBC vehicle insurance policies, contrary to ICBC-issued broker news bulletins about licensing vehicles appropriately, published in July 2018 and again in February 2020.

Tremendous pressure

Despite these orders (agents in some cases were aware of them, while others were not), in the various decisions, agents describe tremendous pressure to sell the one-year policies in lieu of Temporary Operation Permits (TOPs), which are required when licensees are aware that coverage is being purchased for reasons that don’t include operating the vehicle on a British Columbia highway.

“The dealerships require full coverage for one full year term for any single new or newer-model vehicles, especially luxury vehicles. Any agent will be banned by the dealership if didn’t follow this rule or issue a TOP for a brand-new car, especially luxury vehicles,” Yuanfeng (Jack) Ju, one of the sanctioned agents told investigators. “This was strongly demanded by the financial department of the dealerships and had been approved by the president and manager of my brokerage.”

Ju later described a situation in which an agent who issued more than one TOP policy was banned from attending the dealerships and was instead made an in-office agent at the agency.

In another case, the intended decision states that the agent processed one-year policies because the customers preferred them. “The former licensee also stated that as he processed more of these transactions, he eventually became aware that the policies would be cancelled shortly after being placed,” the intended decision in Derek William Fung’s case states. “After a while, yes I did know, but did not think too much of it as it just became normal,” he says.

Recently sanctioned agents include: Fung and Ju, along with Dawei (David) Diao and Megistefi Gjine. Sanctions in the cases vary. The Insurance Council of British Columbia’s representatives say matters related to this particular topic area are not yet fully resolved at this time.

“There are a range of options for sanctions available to the insurance council under the authority of the Financial Institutions Act, and these are determined as appropriate to the circumstances,” said Melinda Lau, manager of communications with the council.

In Diao’s case, the agent, licensed since March 2011, was accused of selling and cancelling policies and also falsifying information on ICBC forms, using editing software, to indicate the vehicles were leased when they were not. Diao was suspended 18 months, his license then being downgraded to a level 1 salesperson’s license for a period of one year. He must also complete remedial course work, including an ethics course. Diao was also ordered to pay investigation costs in the amount of $2,375 and fined $10,000.

Processed 137 transactions

The production order found that between June 2019 and December 2020 he processed 137 transactions involving newer and luxury vehicles, issuing one-year insurance policies before cancelling them within seven days. They also say 31 common policy owners were identified and it was noted that the same credit card was used to purchase multiple policies. He then facilitated the transfer of the vehicles to one company in 92 instances and another company 35 times.

As in past cases, it was noted that the clients in question required refunds by cheque in order to collect points on their credit card.

In the case against Ju, meanwhile, it was found that the former agent issued 23 one-year policies which were all cancelled within 30 days. Although Ju only cancelled two of the policies himself, the regulator still fined the former agent $7,000, assessed investigation costs in the amount of $2,450, ordered remedial course work, suspended the agent for one year and downgraded his license to a level 1 salesperson’s license for one year.

Ju was also found to have unwittingly aided the fraudulent sale and transfer of vehicles on multiple occasions, involving three individuals who all denied buying the cars. One was later found and seized by police before being shipped back to the manufacturer. “There was insufficient evidence to suggest the former licensee was aware that the registrations to GL, YL and YT were fraudulent,” the intended decision in the case states.

Due to an unspecified health condition, the regulator declined to financially penalize Gjine, instead banning Gjine from being licensed for 10 years. In this case the former agent, first licensed in February 2019, processed and cancelled 25 transactions before facilitating the transfer of ownership. It was found that 22 of the 25 one-year policies were issued to a numbered company belonging to her relative.

Despite the fact that Gjine was not forthcoming about this relationship or her relationship as president of another company that she inappropriately transacted business for, due to a serious medical condition, council concluded that issuing a fine or assessing costs would have a detrimental impact on the former agent’s health condition.

Finally Fung is being fined $2,000. He is ordered to complete an ethics course and was assessed investigation costs in the amount of $2,312.50. Council will also not consider an application for his licensure until February 2026.

Licensed from May 2015 until August 2022, Fung processed 55 transactions, cancelling all of the policies himself, before transferring the vehicle’s ownership to subsequent owners, all within three days or less. Of the 55 transactions, 32 were transferred to one dealership, while 23 policies were transferred to another. Seven cancellations involved different named purchasers using the same credit card. “He stated that when he realized that the transactions he was processing were not permitted, he stopped processing the transactions for Company ABC and Company DEF and informed them about his decision,” the intended decision in Fung’s case states.