Manitoba the first to sanction agent in pre-authorized payment case

The Life Insurance Council of Manitoba is the first regulator to sanction Kartik Wadhwa, after Wadhwa emailed instructions to an insurer to reinstate pre-authorized checking plan (PAC) payments from 15 clients without their consent. According to the council’s decision, just one of the clients resided in Manitoba.

After Wadhwa’s Manitoba life and accident & sickness agent’s license, which he held for less than a year, expired in August 2022, the council says any future application for licensure in Manitoba will be scrutinized to determine his suitability to hold a license.

Wadhwa expressly declined his right to request a hearing. The decision does not indicate which other jurisdictions the clients resided in.

The sanctions – Wadhwa was fined $500 and assessed partial investigation costs in the amount of $2,500 – come after the council received a compliance department report indicating the agent had been terminated for cause due to unethical behaviour and because he’d been terminated by another provider, as well.

The managing general agency’s (MGA) internal investigation indicated that Wadhwa’s actions caused several clients, including his Manitoba client, to incur non-sufficient funds (NSF) charges from their financial institutions.

“In each instance, the consumers had previously communicated directly with the insurer to stop their PAC,” they state. During the insurer’s investigation, meanwhile, Wadhwa failed to fully respond to questions and the insurer determined that consent had not been collected. Wadhwa maintains that he obtained consent from all of the clients, but failed to keep notes.

All of the clients contacted indicated that they did not provide consent for the agent to reinstate their PACs.

“By way of his own evidence, the former licensee admitted that the Manitoba consumer had advised him that she could not afford the policy and contacted the insurers to stop the payments. After this conversation, the former licensee reinstated the PAC,” the council’s decision states. “By failing to properly document the client file, and without a client signature providing authorization to reinstate the PAC, the former licensee was unable to support his statements.”