January 18, 2006 by Canadian Underwriter
The Sovereign General Insurance Company says it was “stunned” by recent accusations made against the company by the Autorite des Marches Financiers (AMF), according to a Jan. 17 company press release.
The Sovereign General release says the AMF posted notices of indictment on Jan. 12, 2006 against broker Flanders Insurance Management, a Flanders executive and Administrative Services Ltd. The AMF is seeking a total of $1.11 million in fines in connection with allegations of unlicensed insurance transactions.
The allegations contained in the indictments have not been proven in court.
“AMF alleges that Sovereign General would be complicit in supposedly unlicensed insurance transactions in Quebec by broker Flanders Insurance Management and Administrative Services Ltd.,” the Sovereign General press release notes. “The Sovereign General refutes and denies these allegations and will mount a vigorous defence to the charges.”
The AMF is seeking $560,000 in fines against Sovereign General.
Peter Parkin, the senior vice-president and CEO of Sovereign General, is quoted in the release as saying he was “blindsided” by the AMF’s accusations. “We take this matter very seriously and will defend ourselves. We are confident that these charges will not hold up.”
Sovereign General announced it has retained legal counsel and “will pursue the vigorous contestation of these notices of indictment.”
“The Sovereign General believes it is regrettable the AMF chose to proceed to indictments instead of pursuing the dialogue subsequent to initial inquiries it made on Apr.28, 2005,” the press release states. “Sovereign General responded to the inquiries on June 10, 2005 but heard nothing further.”