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Insurance council fines agent for failing to maintain E&O

By The IJ Staff | August 05 2020 04:00PM

The Insurance Council of British Columbia has ordered Varinder Kaur to pay $1,500 and complete the Council Rules Course, for failing to maintain her errors and omissions (E&O) insurance coverage and for conducting business while she was without E&O.

The council says Kaur also breached council rules when she failed to notify the regulator within five business days that her authorization to represent an agency had been withdrawn.

The part-time agent had her insurance company contract terminated May 29, 2019, after her agency wrote to Kaur to advise her that she was no longer authorized to represent the agency. June 25, 2019 the agency’s E&O broker then emailed Kaur to let her know that her E&O coverage was also cancelled. Kaur says the June 25 email was the first time she learned about her contract cancellation. June 27, her agency confirmed by email that her authorization to represent had been terminated. It then advised the insurance council of the fact on July 12, 2019.

Kaur then wrote two policies for super visa insurance, before receiving an August 1, 2019 letter from council staff advising her that her license status had been changed from active to inactive. Upon receiving the council’s letter, Kaur telephoned the council to self-report that she had written the two policies.

Kaur told council that she uses a relative’s address and had been relying on that relative to deliver her mail. She says she did not know she was required by council rules to notify council when her authority to represent the agency had been cancelled or that her E&O coverage had been terminated.

“The licensee had a responsibility and obligation to be familiar with the council rules and govern herself accordingly, even if insurance was only a part-time endeavor,” the council writes in its intended decision. “Misunderstanding or ignorance of the rules does not justify a failure to comply.”

Although a total fine of $2,000 is appropriate, they add, in consideration of the fact that her breach was unintentional and that she immediately contacted council when she realized her error in selling the two polices without a license, council agreed that a $500 reduction for a total fine of $1,500 was appropriate. The council also gave Kaur 180 days to pay the fine, rather than the usual 90 days, due to undisclosed personal circumstances that have her on leave from her regular employment.

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