Company and agents forgot to renew license and must pat $26,000 but is the FSCO to blame?

Published: November 22, 2017

Updated: July 24, 2018

Author: Luke Jones



Ontario’s Financial Services Tribunal (FST) has decided to insurance agents and an insurance company must pay a combined $26,000 in administrative penalties. The decision comes as the tribunal rejected the argument that the agents’ forgetting to renew their licenses is not worthy of blame.

It is a stark lesson for insurers and agents to make sure their license is valid. The decision was confirmed on Nov. 15. FST chair Ian McSweeney did not agree with the not “blameworthy argument” and said the administrative monetary penalty (AMP) will be split between $13,500 for The North Kent Mutual Fire Insurance Company and AMPs of $7,000 and $5,956 respectively against Brian Ennett and Gregg Tuckwell.

Both Ennett and Tuckwell represent North Kent as general insurance agents. Their licenses at expired in July 2014 and they later renewed their licenses. However, they did not do it until too late, ignoring FSCO notices.

FSCO had been sending notices “to agents whose licences are near the date of expiry,” but those notices are a courtesy “and not a statutory requirement,” McSweeney wrote.

Under its standard procedure, North Kent would ensure agents renewed when they received the FSCO reminders. However, the company did not see the reminders in 2014 and did not realize Ennett and Tuckwell were operating on expired licenses until 2015.

This means both agents operated without a license during a time when Ennett wrote 93 policies worth $9,905 in commissions and Tuckwell wrote 56 policies for $5,956 in commissions. Once all parties realized the error, Ennett and Tuckwell stopped working until their licenses were renewed.

Both also denied culpability, with North Kent arguing the FSCO “cannot promote compliance where there is no ‘blameworthy’ conduct to deter.” Also, the company said it “ought to have been able to rely” on FSCO’s reminder notices.

McSweeney did not agree with the argument, pointing to Subsection 441.2(1) of the Ontario Insurance Act “does not speak of deterring ‘blameworthy conduct,’ but rather simply refers to the promotion of compliance with the requirements” of the province’s Insurance Act and its regulations.

“Being licensed goes to the very core of an agent’s qualifications to conduct insurance business activities and agents who continue to conduct such activities must bear the risk of any lapse that occurs as a result of their failure to complete the licence renewal process on time,” wrote McSweeney. “I may have considered a due diligence submission in a more favourable light in the circumstances had the lapse been discovered within a more reasonable time period.”