Two B.C. brokers have been fined in separate, unrelated incidents for proceeding with insurance transactions without obtaining written authorization from their clients.
In one case, a 22-year life insurance veteran, Shenglin Xian, had procured two participating whole-life insurance policies for a married couple in 2009. He told council that:
• he had reviewed the initial applications in full with the couple;
• each person in the couple understood that, once their medical reviews were complete, he or she would select the appropriate policy structure.
The life agent believed he had obtained a verbal authorization from the client to have the client’s sister sign documents on her behalf. According to the broker, the client said she would then follow up with her own written authorization after her sister signed the document….
But the brokerage’s office never received the client’s authorization.
“Both the [broker] and the complainants have disputed the ownership of the signatures related to the female client's Policy Change Application and Use of Funds forms,” the council wrote in its decision. “lt is, however, not disputed that the female client did not sign the insurance documents in question.”
Council fined the life insurance broker $2,000.
In a second, unrelated case, a general broker, Maxine Janice LeFlour, processed an auto insurance policy without proper authority, while the registered driver of the car was outside the country.
LeFlour renewed the car owner’s policy while the owner was outside the country and could not attend a brokerage office herself. The broker did not have any power of attorney from the owner.
The broker said she processed renewal changes for the owner at the request of a third party, with whom she was familiar and trusted because the person did a lot of business with the brokerage.
Basically, the broker declared the third party as the car’s principal owner. The bank account premiums were changed to come out of the third party’s bank account instead of the car owner’s account.
After the broker prepared the renewal documents, the third party signed them and the broker remitted them to the agency. Council found no evidence that the car’s owner objected to the arrangement, but the broker was nevertheless fined $1,000 for carrying out the transaction without obtaining the client’s authorization.
The agency fired the broker when they found out.
