From the Regulators

Errors and omissions insurance is necessary to protect consumers: FSCO

By James Langton |

Ontario's Superintendent of Financial Services has denied a life insurance agent a licence after the Financial Services Commission of Ontario (FSCO) was advised that her errors and omissions (E&O) insurance expired, and she didn't respond to the regulator's enquiries seeking an explanation.

FSCO issued a decision earlier this week denying a license to Lei Chen. It alleged that Chen failed to comply with the statutory requirement to maintain E&O insurance; that she failed to facilitate an investigation into whether she was in compliance with the insurance requirement; and that, as a result, she is not suitable to hold a life agent licence.

It says that she did not request a hearing to consider those allegations; and that, in the absence of evidence to the contrary, the allegations are considered proven; including the allegation that she is unsuitable to hold an insurance licence.

"Errors and omissions insurance is necessary to protect consumers from negligence by insurance agents," the decision notes. And, it says that "agents must be governable and amenable to being regulated."

"Accordingly considering the lack of suitability as demonstrated by the failure to facilitate an examination, the absence of the necessary insurance to protect the public and lack of any explanation for such behavior ... the appropriate penalty is refusal of the application made by Ms. Chen for a licence as an insurance agent," it ruled.