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AMF launches proceedings against unlicensed firms distributing policies on behalf of “non-existent” insurer


October 26, 2010   by Canadian Underwriter


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The Autorité des marchés financiers (AMF) launched penal proceedings against Water Safety Services (WSS), International Water Safety Foundation (IWSF) and Alexandre Beaudoin Bonotto, president of WSS, for allegedly issuing insurance certificates without being licensed.
An AMF investigation found that IWSF, a company incorporated in England, was issuing insurance certificates to U.S. clients through WSS, a company constituted in Quebec that is neither licensed nor registered as an insurer, firm or claims adjuster in Quebec.
The master policy issued by WSS and IWSF was allegedly underwritten by North American Marine General Insurance Company, a Panamanian insurer. According to the AMF investigation, this insurer does not exist.
A Québec Superior Court judge appointed a representative from PricewaterhouseCoopers as receiver over the property of the firms. As well, the judge:
• ordered WSS, IWSF and their directors or officers to repatriate all funds and property of WSS and IWSF, as well as all funds and property held on behalf of third parties to the receiver;
• requested the receiver take any necessary measures to ensure that illicit activities are ceased;
• requested that any Internet site operated by the firms in connection with the businesses be discontinued; and
• requested that the receiver contract the “insureds” to inform them their insurance policies issued by IWSF and/or WSS are part of a judicial discussion regarding their validity and the insureds may need to take out new policies.
Regulators in at least 11 U.S. states issued cease and desist orders against IWSF and WSS prohibiting them from transacting insurance business in their respective jurisdictions.