In a recent decision and reasons published by the Registered Insurance Brokers of Ontario (RIBO), the regulator announced it has fined Mark Norris Lau and Overseas Insurance Brokers Corporation $350 for failing to process change requests in a timely manner and for charging impermissible service fees.
In the agreed statement of facts, it is noted that the complaining client delivered a signed request to delete coverage for its fleet of tour buses the following day in November 2019. “The subject policy was provided through a Facility Association fleet policy,” the decision and reasons in the case states. “The Facility Association is a nonprofit association of insurers that operate in various provinces and territories in Canada. The Facility Association is not an insurance company and instead works with specific insurance companies that issue policies, collect premiums and handle claims on behalf of the association.”
The reasons go on to explain that the association provides coverage to those who cannot obtain insurance in the voluntary market. “They are considered the insurer of last resort. This is a residual market mechanism designed to ensure that all customers have access to automobile insurance, but the premiums are generally much higher than the voluntary market given the risk profile.”
In this case, Lau failed to deliver the request to delete the coverage to the insurer in November 2019, instead discovering the error and processing the request in August 2020. “The licensees (Lau and the brokerage) sought to have the insurer retroactively cancel the policy as of November 2019, but that request was denied at the first instance and again on appeal,” the decision document states.
During the case it was also discovered that Lau previously held the mistaken belief that the firm could charge association clients a service fee in the amount of $200 on renewal of each and any vehicle with liability coverage and on the addition of coverage to vehicles during a policy term, provided the service fees were disclosed to clients prior to their being charged. “The licensees charge the complainant such service fees each time he requested to deactivate or reactivate his commercial auto insurance coverage.” Lau and the firm have since ceased the practice.
“Charging more than the published commission or charging additional service fees to clients is prohibited by the Facility Association’s Manual of Rules and Rates,” they state.
