The Insurance Council of British Columbia has ordered Xiaohua (Ava) Tian and Viking Financial Solutions Inc. to pay fines and costs, and Tian must complete remedial education after it was found that the agent sold unsuitable products, failed to disclose a referral arrangement, and failed to maintain proper books and records of the client’s needs. Although it was simply dubbed “suspicious” by the regulator, the agent was also initially accused of rebating premiums through a third party.
Licensed since September 2017 as a life accident and sickness agent with a corporate license with council as well, Tian voluntarily cancelled both licenses in July 2024.
The two complaining clients in question purchased two participating life insurance policies owned by one client’s business. The two individuals were introduced to the licensee by “JT” who had a consultant agreement with Viking such that the consultant would receive 50 per cent of the policy’s first year commissions if the policies sold met certain conditions.
Immediate financing arrangement
“The licensee states that the complainants had expressed interest in an immediate financing arrangement (IFA) strategy. The licensee was under the impression that the complainants had heard of the IFA strategy from other individuals, as they seemed to have knowledge of and expressed interest in pursuing it,” the regulator’s intended decision states.
The policies were sold to the company which had variable income, usually well below the premiums required to maintain the policies, and which had considerable debts. Several banks declined to finance the strategy. No affordability analysis, know your client or reasons why letter were submitted as evidence as to why the products were suitable.
In July 2020 the relationship between Tian and her clients broke down, at which point the agent’s lawyer presented the pair with an invoice stating they owed the agency $938,000 for services rendered. When asked to prove that she disclosed the $750 hourly rate, two documents dated the same day – one with the hourly rate stipulated and another without the stipulation – were submitted to the regulator without explanation as to why the two different forms were in existence.
Insurer rescinded two policies
Notably, JT received a total of $500,000 in referral commissions from the agency. “However, shortly after each commission was paid to JT, there was a transfer of funds from JT to the complainants,” the intended decision adds. Ultimately the insurer rescinded the two participating policies and returned the premiums paid. In a legal settlement between JT, the complainants, the licensee and the agency, the complainants repaid the $500,000 to JT who in turn returned it to the agency.
The agency and licensee did not pursue the invoice against the complainants after the settlement. The licensee and the agency were also unable to provide any written documentation that shows the complaining clients were aware of the referral arrangement.
All told, Tian was fined $10,000. She is required to be supervised for two years of active licensing if she is licensed in the future. The agency was fined $5,000 and both Tian and the agency were jointly and severally assessed investigation costs in the amount of $1,312.50. In addition, Tian must complete four remedial Advocis courses prior to being re-licensed again in the future.