A formerly licensed life insurance and accident and sickness agent who sold his book of business in June 2021, is being sanctioned by the Financial Services Regulatory Authority of Ontario (FSRA) for failing to maintain errors and omissions (E&O) insurance and for providing FSRA with false and misleading information on multiple renewal applications in the past.
Mark Dennis Carter was ordered to pay two administrative penalties totalling $8,500. This included $2,500 for the insurance lapse and $6,000 for misleading the regulator.
Licensed since December 2001, Carter was under contract with managing general agency, The Gryphin Advantage Inc., from May 2008 until April 2021, providing both insurance products and financial advice to clients. Carter sold his book in June 2021 but allowed his E&O insurance to expire in October 2020.
Carter has not applied to surrender his license, but has not renewed it since December 2021.
When his E&O insurance expired, the agent was sent multiple automated messages which all went to Carter’s assistant’s email. “Agents are required to keep their email addresses current with FSRA to ensure they receive timely updates,” FSRA’s notice of proposal states. “The renewal application makes it clear that the email address provided should be that of the agent.”
They add that Carter did not submit any new insurance business after the expiry of his own insurance policy, but did receive trailer fees and continued to send emails to clients providing them with advice and financial statements. On his last renewal application to FSRA he declared that he would maintain the coverage as required.
Carter’s transgressions came to light after FSRA received a complaint about another agent who referred the complainant to Carter for an investment opportunity that resulted in the loss of the entire $55,000 investment made by the client.
It was discovered that Carter was the director, president and secretary of Earthink Inc. since March 2014. He is also the company’s sole shareholder.
“Carter was the primary person to solicit individuals to make loans to Earthlink or Earthink Germany. Carter solicited at least 32 lenders,” they write. This included at least three of his insurance clients who made loans totalling $340,000. None of the clients in question have received any interest or principal repayment on their loans. Carter’s 2017 and 2019 renewal applications indicate that Carter had no other employment than as an insurance agent.
Broken down further, FSRA’s penalties in the case were $5,000 for not disclosing his outside employment or occupation and $1,000 for not providing appropriate contact information.
