B.C. broker ordered to pay fine for providing a false insurance document as a favour to a friend

The B.C. Insurance Council has ordered a B.C. broker to pay a fine and legal costs totaling more than $3,000 after finding the broker arranged to create a false insurance cover letter as a favour to his friend, the broker’s commercial insurance client.
The friend, identified as ‘RL,’ a business manager of an import and export company, spoke with Tam in February or March 2010 about an existing insurance policy the company held that was up for renewal.
Over the course of the conversation, RL asked the broker to provide a property insurance quote for four of the company’s U.S. properties. The broker said he could provide a quote, but did not promise that he could bind the coverage.
RL later called the broker on Jan. 18, 2011 and asked him to make a change to the coverage he thought had been in place since April 2010. The broker thought RL had made a mistake, since the coverage did not exist at the brokerage. The broker indicated it was not the first time RL believed he had coverage at the agency when in fact the coverage was provided by a different agency.
RL called back to discuss the quote for the U.S. properties. He stated there was no error: the coverage was placed with that agency.
About a month later, in March 2011, RL called again and asked the broker to provide some sort of paperwork for the coverage that hadn’t actually been in place. He said the company wanted to close its accounting books for 2010.
The broker provided a false cover note, reasoning that there was no harm in providing his friend with a piece of paper so his company could close its books. No claims were made against the claims-made property insurance policy between April 2010 and December 2010.
RL mailed the broker a cheque. At that point, the broker contacted his friend, asking if RL had been confused into thinking that by sending a cheque, coverage would be in place for the U.S. properties. The broker made it clear to RL that the coverage was not in place and the cheque would have to go back to the company.
Council found that the scenario was an “abberation in the licensee’s unblemished 10-year insurance career.” It ordered that Tam’s actions be monitored for two years; that Tam pay a $2,000 fine; and that he pay the council’s legal fees of $1,050.