Saskatchewan licensee receives small fine for failing to maintain liability insurance

The Life Insurance Council of Saskatchewan’s market practices committee has fined Fit Financial Inc. $300 for not having sufficient errors and omissions (E&O) insurance coverage for 19 days in April 2023. Despite the firm’s designated representative presenting repeated arguments countering the decision, the council also assessed costs in the amount $440.

According to the council, firms must notify the regulator immediately if they fail to maintain certain financial security requirements – either a bond or E&O insurance coverage.

Obtained separate entity coverage 

Fit Financials’ designated representative, Deah Block, first argued that there was no lapse in the firm’s insurance coverage, as there was vicarious liability coverage in place under a policy issued in her name. “When she was advised by council that separate entity coverage was required for the licensee, she obtained separate entity coverage, effective April 19, 2023. Then, when the gap in coverage from April 1 to 19, 2023 was brought to her attention, she obtained backdated coverage effective April 1.” 

Block also argued that the backdated policy meant there was no lapse in coverage. The council, on the other hand, argued that the coverage wasn’t in place for nearly three months, as she only arranged for the policy to be backdated later that year, in July.

Signed non-claim disclosure agreement 

More, the council states that the coverage was only backdated after Block signed a non-claim disclosure agreement confirming that she had no knowledge of any existing or potential claims. “The committee finds that the requirement for the designated representative to execute such an agreement on behalf of the licensee indicated that any claims made during the period April 1 to 19, 2023 would not have been covered.” 

“The legislation in place in Saskatchewan provides that coverage must be maintained by all individuals and businesses which hold a license to act as an insurance intermediary in Saskatchewan,” the decision states. “It is a license holder’s responsibility to ensure that all legislative requirements have been satisfied in order to obtain and retain an insurance license in Saskatchewan.”