No similar orders have been placed in BC, where the company has five offices.
A life insurance agency that operates five offices in BC has been sanctioned by Ontario’s financial regulator for potentially deceptive sales tactics.
Greatway Financial Inc. agents can be located at offices in Abbotsford, Kelowna, Surrey, Burnaby and Victoria. While their counterparts in Ontario face mandatory retraining, no such orders have been placed in BC.
However, the BC Insurance Board told Glacier Media that it is conducting a “compliance review related to the subject matter referenced in the Order issued by the Ontario Financial Services Regulatory Authority” but offered few details. .
Greatway contracts with life insurance companies and acts as an intermediary between the insurers and their agents. Such agencies are regulated by the council.
ontario accusations
Last month, Ontario’s regulator, the Ontario Financial Services Regulatory Authority (FSRA), ordered Greatway to retrain its Ontario agents and send information to existing Ontario policyholders who used Greatway agents, to re-evaluate your policy.
The Ontario Authority’s December 16, 2022 order also requires the company to take additional steps “to ensure that consumers who purchase Universal Life policies in Ontario receive appropriate and accurate information and advice.”
The Ontario authority had alleged that “Greatway-trained agents may provide consumers with information and advice that is inappropriate, inaccurate or misleading regarding the terms, benefits or advantages of certain insurance policies, including universal life policies sold under a secured retirement plan strategy.
The problem was a universal life insurance product that agents were selling (Insured Retirement Plan, or IRP for short) that required additional money to be set aside as a tax-deferred fund for when the cost of insurance increases as the insured gets old
The IRP is suitable for higher net worth individuals, such as those who have maxed out their RRSP; however, the FSRA found that the company was training agents to oversell the product to all customers, regardless of their financial circumstances.
Agents were found framing the IRP as a savings account, not an insurance cost.
The FSRA’s notice of proposal (NOP) stated: “For example, the training instructs agents: ‘Rule of thumb: Do not mention the amount of insurance’; “don’t focus on life insurance”; “eliminate the insurance mentality and make the client concentrate on saving/investing”; and “Don’t mention the nominal amount yet. Use this as a ‘jackpot’ moment.”
The compliance order states: “Greatway disagrees with some of the allegations in the NOP but wishes to cooperate with the FSRA to address the alleged deficiencies in the Training.”
Greatway issued a statement after the order: “As leaders in our industry, Greatway Financial is committed to continuous improvement and providing high-quality service to our clients. All Greatway agents licensed in Ontario must complete the revised training by March 31, 2023.”
The Ontario Authority noted that Greatway has “grown rapidly” in recent years: In 2018, Greatway had 1,400 authorized agents across Canada and sold approximately 13,000 policies. In 2021, Greatway had 3,490 agents across Canada and sold approximately 25,000 policies.
Conduct under review in BC
What is unclear is how many Greatway agents operate in BC and how many policies have potentially been sold in this province in the circumstances described by the FSRA.
Glacier Media sought answers on what is being done to protect BC consumers.
British Columbia’s primary financial regulator, the British Columbia Financial Services Authority (BFSA) is the provincial sister to the FSRA billing itself as the “single integrated regulator of the British Columbia financial services sector.” British Columbia which oversees credit unions, trust and insurance companies, mortgage brokers, pension plans, and real estate.” real estate services.”
However, in this circumstance, BCFSA told Glacier Media that it only regulates insurance companies and not agencies, such as Greatway; that task remains with the BC Insurance Board.
As such, BCFSA has not issued any similar enforcement action, to date, nor issued a statement that would alert BC consumers to the potential issue raised by the Ontario authority.
The board informed Glacier Media that its compliance review began on October 22, 2022, following the FSRA notice of proposal.
“This type of review looks at whether licensees’ insurance conduct and practices meet the requirements of the Insurance Council Regulations, Code of Conduct and Financial Institutions Act,” spokesperson Melinda Lau stated.
Lau also noted that the Canadian Council of Insurance Regulators (CCIR) conducted a joint review of Greatway and three other agencies, which took place in the first half of 2022.
But the council is not a member of the CCIR; rather, the BCFSA is, and the FSRA conducted that review and published its findings on its website on September 28, 2022. The findings formed the basis of Greatway’s notice the following month. The BCFSA is said to have been a “passive participating authority”.
Glacier Media reached out to Greatway for comment but did not receive a response.
gwood@glaciermedia.ca
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