A life insurance company has been ordered to stop selling policies through two payday lenders and provide refunds after an investigation by British Columbia regulators.
The Financial Institutions Commission (FICOM) says it has issued a cease and desist order against Winnipeg-based Western Life Assurance Co. to stop the sale of creditor group insurance through Venue Financial Ltd. and Cashco Financial Inc.
It says the payday lenders aggressively and deceptively sold Western Life's insurance products and are prohibited from such sales involving any insurer in B.C. until the commission is satisfied their practices are conducted properly.
The commission, which partnered on an investigation with Consumer Protection BC, says legally required disclosures are not being made to consumers who aren't told they've bought the insurance or that it's a voluntary product.
The joint investigation also found consumers are not given enough information, or an opportunity, to make an informed decision about whether they want or need insurance that may be sold to people who aren't eligible for coverage.
The commission says Western Life must contact everyone who's been insured through payday lenders and provide details of the insurance they bought, confirm eligibility and offer to cancel the insurance and give refunds to affected consumers.
Western Life has reviewed the FICOM order and is fully complying with its terms, the company says in announcement published late Wednesday.
"The fair treatment of our customers and compliance with our regulatory obligations are our top priorities," says Louise Mitchell, president of Western Life, in a statement.. "We are concerned by what we read in the order and are launching an investigation so that we can ensure complete compliance by our distribution partners in the future."