The Insurance Council of British Columbia has come out with three more decisions concerning agents who regularly and repeatedly processed Insurance Corporation of British Columbia (ICBC) one-year vehicle insurance policies for companies engaged in exporting vehicles out of Canada. In all cases, the policies were cancelled within days, with refunds generally being requested by cheque. Many of the agents involved are also being caught processing Autoplan transactions for vehicles in their own name – another noted contravention of the ICBC’s policies.
In the first case, Yinghui (Shelley) Shao, first licensed in October 2014, has had her license suspended for one year. Upon returning to the industry, her level 2 license will then be downgraded to a level 1 license for a period of one year. She is also required to complete remedial education, pay a fine of $7,500 and costs in the amount of $2,000.
According to the intended decision in Shao’s case, the agent processed six one-year policies in her own name, issued 29 one-year policies in circumstances where she should’ve known they were not appropriate and herself processed 18 of the 29 policy cancellations. All associated vehicles were mostly transferred to two subsequent owners. In 17 of the 29 transactions, there were five common principal operators whose names differed from the policy owners. In four cases, the purchaser on the vehicle registration was the same name used in the signature of the subsequent owner. Later in the decision, that owner is also identified as an officer of one of the export companies.
Banned from conducting Autoplan business
In the case where she was noted as the temporary owner of six vehicles, these were also transferred to one of the export companies discussed. She is also being sanctioned for conducting three of her own Autoplan policy transactions. As part of its investigation, the ICBC banned Shao from conducting Autoplan business for one year.
The intended decision goes on to state that Shao thought she was simply insuring a car and did not see her role as facilitating the export of vehicles. “She stated that she had seen her co-workers in different dealerships performing similar transactions and this made her think that these actions were acceptable,” they write. “The licensee was aware that some of her transactions involved the same purchaser of the vehicle. Although the licensee knew that some purchasers received compensation for their role, she did not know the exact compensation they had received.”
Finally, Shao is being sanctioned for being one of these purchasers, admitting that on two or three occasions she would be given a bank draft from one of the export companies discussed to purchase a vehicle and transfer it back to the company. She denied doing this on six occasions, as alleged, pointing out that her handwriting and signatures on several applications appeared to be forged.
As a result of the investigation by the ICBC, the agency Shao worked for withheld all of her commissions, worth about $9,000. “The licensee further stated that she left the agency shortly after the ICBC investigation because she was embarrassed about the situation.”
The second case mirrors earlier cases from the regulator, describing the same patterns of behaviour and naming companies and supervisors by the same initials throughout.
In this case, Muyan (Laura) Li was fined $1,500, must complete coursework, and was assessed costs in the amount of $1,000. The agent, first licensed in August 2016, had her license terminated in February 2024 at her own request. Li is accused of processing 15 transactions – eight submissions and seven cancellations, which they say she should’ve noticed were suspicious, as the policies were both issued and cancelled within days. She also processed repeated transactions for the same vehicle, processed two cancellations within two months for one vehicle and issued another Autoplan policy twice for the same vehicle within seven months. “Additionally, for two vehicles, the former licensee cancelled the Autoplan policy then subsequently issued an Autoplan policy for the same vehicles.”
Elements of tax evasion and potential money laundering
They write: “ICBC concluded that these transactions were not in the best interest of ICBC and elements of tax evasion and potential money laundering were also discovered during the investigation. The transactions had not been reported to the ICBC, contravening the Autoplan Procedures Manual,” the intended decision states. Four common policy owners accounted for 13 of the 15 transactions.
Similar to previous cases published by the regulator, the premiums paid were also inflated and the refunds were requested by cheque – the eight policies she issued herself had an average premium per policy that was seven times higher than the average premiums paid in the province, according to the Insurance Bureau of Canada (IBC).
“There was no substantive evidence that the former licensee knew of or was involved in the vehicle export grey market,” her intended decision states. “While council questioned the former licensee’s decision to proceed with the transactions, council took into consideration that she was a level 1 salesperson at the time, and that she was following instructions from the agency’s management.”
In the final case, this time involving Ada Chung Man Tang, licensed since August 2017, the former agent was fined $7,000, required to complete coursework and assessed investigation cost in the amount of $2,137.50.
Both her level 2 general insurance agent’s license and her life accident and sickness insurance agent’s license were cancelled in August 2023 for non-renewal. If she returns to the general insurance industry – the council said it will not consider an application for licensing until January 2026, at which time her level 2 license will be downgraded for a period of one year.
Processed 42 transactions
The sanctions come after it was discovered that Tang processed 42 transactions, all involving new vehicles. In every case, the former licensee issued then cancelled the policies before facilitating the transfer of ownership to one subsequent owner. It was also determined that Tang processed seven ICBC Autoplan transactions for vehicles that she owned or leased herself. “The investigation revealed that 16 of the 42 policies in question involved six common owners,” the intended decision states. “Of the 24 one-year Autoplan transactions in question, the former licensee processed 40 transfers of ownership to the company, Company ABC Trading.”
More, 11 different named purchasers all used the same credit card, while four different purchasers used a different card to purchase one-year policies. “All of the vehicles were subsequently transferred to LX Trading.”
All of the cases refer back to ICBC Broker News Bulletins, issued in July 2018 and again in February 2020, which remind brokers that when a vehicle is licensed, it must be for the purpose of operation on a British Columbia highway. “If a licensee is aware that the only reason a policy is being sold is to facilitate the export of the vehicle, and the intention of the customer is to cancel the policy within days of issuance, the customer should only be sold a temporary operation permit (TOP),” they write.
In Tang’s case, the agent admitted to not paying attention to the broker bulletins, which the regulator says demonstrates a lack of competence, “and would not be in line with the usual practice.”
“Given all of the indicators, the former licensee should have made appropriate inquiries about whether a TOP was required instead of continuously issuing one-year Autoplan policies and then cancelling them shortly thereafter,” the intended decision in Tang’s case states. “The former licensee should have known that issuing these 42 one-year Autoplan policies were contrary to the procedures and interests of the ICBC and she cannot rely on her willful blindness to the circumstances as a defense.”
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