A life insurance agency operating five offices in sa国际传媒 has been sanctioned by Ontario’s financial regulator for potentially deceptive sales tactics.
Greatway Financial Inc. agents can be located in offices in Abbotsford, Kelowna, Surrey, Burnaby and Victoria. While their counterparts in Ontario face compelled retraining, no such orders have been made in sa国际传媒
However, the Insurance Council of BC told Glacier Media it is conducting a “compliance review related to the subject matter referenced in the Order issued by the Financial Services Regulatory Authority of Ontario” but offered few details.
Greatway contracts with life insurance companies and acts as an intermediary between the insurers and its agents. Such agencies are regulated by the council.
Ontario allegations
Last month, Ontario’s regulator, the Financial Services Regulatory Authority (FSRA) of Ontario, ordered Greatway to retrain its Ontario agents and send existing Ontario policy holders, who used Greatway agents, information to reassess their policy.
The Ontario authority’s Dec. 16, 2022 order also requires the company to take additional measures “to ensure that consumers who purchase Universal Life policies in Ontario are provided with information and advice that is appropriate and accurate.”
The Ontario authority had alleged that “agents trained by Greatway may provide consumers with information and advice which is inappropriate, inaccurate or misleading regarding the terms, benefits or advantages of certain insurance policies, including universal life policies sold under an insured retirement plan strategy.”
At issue was a universal life insurance product the agents were selling (Insured Retirement Plan, or IRP for short) that required additional money be put aside as a tax-deferred fund for when the cost of insurance increases as the insured ages.
The IRP is suitable for higher net-worth individuals, such as those who have maxed out their RRSP; however, FSRA found 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 insurance cost.
The FSRA (NOP) stated: “For example, the Training instructs Agents: “Rule of Thumb: Do Not Mention Insurance Amount”; “don’t focus on life insurance”; “remove the insurance mindset and have the client focused on saving/investment”; and “Do not mention Face Amount yet. Use this as a ‘jackpot’ moment.”
The states, “Greatway disagrees with some of the allegations in the NOP but wishes to cooperate with FSRA to address the alleged deficiencies in the Training.”
Greatway issued a following the order: “As leaders in our industry, Greatway Financial is committed to continuous improvement and to delivering high quality service to our clients. All Greatway agents licensed in Ontario are required to complete the revised training by March 31, 2023.”
The Ontario authority noted Greatway has “grown rapidly” in recent years: in 2018, Greatway had 1,400 licensed agents across sa国际传媒 and sold approximately 13,000 policies. In 2021, Greatway had 3,490 agents across sa国际传媒 and sold approximately 25,000 policies.
Conduct under review in sa国际传媒
What’s unclear is how many Greatway agents operate in sa国际传媒 and how many policies have potentially been sold in this province under the circumstances outlined by the FSRA.
Glacier Media sought answers for what’s being done to protect sa国际传媒 consumers.
British Columbia’s chief financial regulator, the BC Financial Services Authority (BFSA) is the FSRA’s provincial sibling that bills itself as the “single integrated regulator of sa国际传媒’s financial services sector overseeing credit unions, trust and insurance companies, mortgage brokers, pension plans, and real estate services.”
However, in this circumstance, BCFSA told Glacier Media it only regulates insurance companies and not agencies, such as Greatway; that task remains with the Insurance Council of BC.
As such, BCFSA has not issued any likewise enforcement action, to date, nor issued a statement that may flag sa国际传媒 consumers of the potential problem raised by Ontario’s authority.
The council informed Glacier Media its compliance review commenced Oct. 22, 2022, following FSRA’s notice of proposal.
“This type of review looks at whether licensees’ conduct and insurance practices are compliant with the requirements of the Insurance Council’s Rules, Code of Conduct, and the Financial Institutions Act,” stated spokesperson Melinda Lau.
Lau also noted that the Canadian Council of Insurance Regulators (CCIR) conducted a joint review of Greatway and three other agencies, which occurred in the first half of 2022.
But the council is not a member of CCIR; rather, the BCFSA is, and FSRA led that review and its findings on its website on Sept. 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 has reached out to Greatway for comment but did not receive a response.
