Insurance agent nominee has duty to end unethical practices of employer(s): B.C. Insurance Council

A Level 3 general insurance agent nominee must do more than simply report regulatory concerns to her employers (the principals of the brokerage), especially when the concerns include the conduct of the principals, the Insurance Council of B.C. has ruled.
Raghbir Kaur Atwal was ordered to pay a fine of $5,000 for her role in failing to provide sufficient supervision at two branch offices of Accost Insurance & Financial Centre Inc., located in Surrey, B.C.
The principals of the brokerage, Sukhvir Singh Mann and Gurvinder Raj Singh Lehal, worked at one of the brokerages offices, while Atawal worked in the other.
Mann and Lehal sold Accost on Sept. 1, 2008.
After the sale, the Insurance Council of B.C. found that, between 2001 and 2006, the two brokerage principals “had used their positions as general insurance agents and as officers, directors and principal owners of Accost to benefit their friends, family and clients, prejudicing the Insurance Corporation of British Columbia (ICBC) in the process through their misuse of temporary operating permits.”
Specifically, the council found the brokerage’s principals had:
•    allowed or failed to prevent employees from accessing ICBC’s database to obtain personal information on ICBC customers;
•    improperly enrolled clients in ICBC’s premium financing program;
•    permitted the improper transfer of vehicle ownership to avoid a debt; and
•    improperly registered imported vehicles.
The Insurance Council said the principals failed to comply with ICBC warnings and directives to take corrective action.
In its order against Atwal, the council said it raised its concerns about the activities of the principals with Atwal. She said she related these concerns to Mann and Lehal, her employers, who told her they would look into them.
“The Accost circumstances were somewhat unique in that [Atwal] was responsible for Accost’s insurance activities, which included the transgressions of the Accost principals, yet she was beholden to these principals as her employer,” the Council said in its order.
“Council recognized the challenges that can arise where an agency nominee is not an owner or directing mind of the agency. However, this does not excuse the nominee from carrying out his or her responsibilities, such as agency supervision.”