Regulator ends aspiring broker's plan

Should a government inspector be able to sell agricultural insurance? The Insurance Council of Alberta weighs in...

An inspector for Alberta’s Natural Resources Conservation Board has been denied a license to sell agricultural insurance based on a conflict of interest, the Insurance Council of Alberta has ruled.
Lynn M. Stewart, a conservation board inspector, went to the council seeking a certificate of authority to act as a livestock insurance agent. 
Council decided that her job description did not square with the licensing regulations. 
The job description of the conservation board inspector includes responding to and investigating “public complaints associated with livestock facilities, CFOs (confined feeding operations) and manure management.” 
It also involves recommending and taking enforcement actions when AOPA (Agricultural Operations Practices Act) infractions have been discovered. 
This includes conducting environmental risk screenings of CFO facilities, recording evidence and taking samples to support decisions, following up on permit conditions, and testifying at board reviews regarding compliance actions.
Licensing regulations state that: “the individual must not be in a position to use coercion or undue influence in order to control, direct or secure insurance business.” Also, “the individual must not be engaged in another occupation or business that would place the individual in a conflict of interest position when acting as an insurance agent.”
A conflict of interest exists when an insurance agent has a reason act in a way that may not necessarily be in the best interests of the client.
“In reviewing [Stewart’s] duties, responsibilities and authority, it is clear that she is involved in a compliance role that is directly related to the customer base she would solicit when acting as an insurance agent, namely, livestock producers,” the council ruled. “Given this, an insurance agent in the applicant’s position could pressure livestock producers to purchase insurance so as to avoid board enforcement orders or compliance directives.  
“Similar pressure could also be exerted in terms of linking the outcome of an inspection to whether a producer purchased insurance from the applicant.”
Council emphasized that it was “in no way saying that we believe that the applicant would take such actions.” 
It simply said that the regulations “speak to potential situations in which undue influence or coercion could be used and this is clearly the case here.”
Council also raised the possibility of Stewart becoming aware of compliance issues in the course of her dealings with clients as an insurance agent. Her duty of confidentiality to her clients would put her in a conflict with her duties as a board inspector to report any breaches to the board.

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