The Alberta Insurance Council is sanctioning Joseph F Murdoch Matheson, fining Matheson $1,000 for letting his errors and omissions (E&O) insurance lapse after resigning from his sponsoring company.
Licensed since October 2017, the insurance council received a life agent reporting form (LARF) stating that the advisor did not have E&O coverage from April 2021 to March 2022.
In the heavily redacted decision, the council reviews Matheson’s correspondences with the various companies involved (unnamed sponsoring company, managing general agency, E&O coverage provider and E&O underwriter), wherein he repeats that the lapse was because his sponsoring company terminated his coverage in error. He also asserts that he never received the mailed letter or any email documentation indicating that his coverage was terminated, as he no longer has access to the address that companies had on file for him. Matheson also repeats that attempts to have his coverage reinstated were declined by the E&O underwriter, “after lengthy discussion.”
Matheson has since obtained E&O coverage and has provided proof of its existence.
In levying the fine, the insurance council also considered the sponsor’s cancellation letter which explicitly states that E&O coverage provided by the sponsoring company ended on the date the agent and advisor terminated his sales agreement. It also considered documentation from the E&O providers, including a list naming the agent as a terminated advisor and an email from the sponsoring company confirming his resignation. They add that the reimbursement sent when the policy was terminated was a clear indication that a policy was no longer in place.
“Council is satisfied that the agent failed to maintain his E&O insurance coverage once it was terminated,” they write. “It is the responsibility of the agent to ensure that he held valid and proper E&O insurance.”
