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The Insurance Council of British Columbia has fined three brokers $500 each for failing to inform the council that their errors and omissions (E&O) coverage had lapsed.
Council bylaws state that brokers “must maintain or be covered by E&O insurance, which extends to all activities as a licensed insurance agent, salesperson or adjuster,” with a minimum limit of $1 million per claim and a minimum aggregate limit of $2 million. Brokers must inform council that they are not insured within five business days of their coverage lapsing.
Council issued fines on December 4 in three separate matters, each of which related to lapsed E&O coverage. In each case, a life and accident insurance broker failed to tell the regulator that their coverage had discontinued.
The reasons for not informing council varied:
• Cher Leonardo Sayuno, who first received her life agent license in 2007, didn’t inform council that her E&O coverage expired on June 1, 2011. “The licensee did not notify council of the termination of her E&O insurance as she had been on vacation and, upon her return, had been busy with preparations to open her own physiotherapy clinic,” council wrote in its intended decision.
• Maria Janet Corporal Dizon, who first received her life agent licence in 2006, did not inform council that her E&O coverage expired on June 1, 2011. “At the time, the licensee had another job and was caring for her father who was ill and hospitalized,” the council found.
• Rajvinder Kaur Pooni, who first received her life agent licence in 2009, did not inform council that her E&O coverage had expired on August 28, 2011. “The licensee indicated the failure to renew her E&O insurance was an oversight on her part,” council found. “The licensee has a young family and was not able to conduct insurance activities. Instead, she had limited herself to administrative work for another licensed agent.”
In all three of the above instances, the brokers had not conducted any insurance activities during the time they were without E&O coverage. The precedent for unintentional breaches of the E&O reporting requirement is a $500 fine.
