The Insurance Council of B.C. has placed a 15-year veteran life insurance agent under mandatory supervision for two years, after she improperly arranged RRSP loans for her clients to assist them in paying off their bills, high-interest debts and personal travel costs.
“The licensee's failure to fully understand the terms of the loans and RRSPs, which she facilitated for the nine clients, was concerning to Council, particularly given her level of experience in the financial services industry,” the regulator said in its decision.
“Further, considering the fact she was provided with information on the terms of the loans in the training material from the life [insurance] company and in the loan applications, the licensee should have known that her clients could not access the loan proceeds in the manner she suggested.”
Angelina Magsarili Aranton has been licensed as a life agent in Canada since 1998, when she immigrated to Canada from the Philippines. She operates a life insurance business from her residency in Surrey, B.C. She has a list of more than 1,000 clients, consisting mainly of new or past immigrants from the Philippines met through church, the Philippine community, referrals, and local advertising.
Aranton arranged RRSP loans for nine of her clients for unnamed amounts. (continued)#pb#
Within a month, each of the clients had withdrawn all but $250 from the RRSP accounts. “It was established that, in some cases, the funds were used by clients to pay bills or debts,” a Council investigation found. “In one instance, the funds were used to pay for a trip to the Philippines.”
Loan agreements required each of the nine clients to invest money in an RRSP, purchased through the life insurance company, until the loan was repaid. The agreements also prohibited clients from redeeming, liquidating, selling, or otherwise transferring funds out of the RRSP without the bank's prior consent. These conditions were not met.
The life agent said she did not review these particular terms with her clients, even though they were written in the life insurance company’s advisor guide for the loan and the loan applications she co-signed.
“Council found this to be a case in which the licensee genuinely believed she had found a way for her clients to legitimately access borrowed money at terms which were much more favourable than borrowing money through a credit card,” the Council wrote in its decision. “In determining an appropriate disposition, Council considered it was not the licensee's intention to harm any party, she derived little financial benefit from her actions, and she had not been the subject of any previous review by Council.”
