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Travel insurer fined $3,000 after agents sell policy to an excluded truck driver


March 14, 2018   by David Gambrill


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CAA Manitoba, also licensed as MML Club Services Ltd. and CAA Manitoba Travel, has been fined $3,000 by the province’s insurance regulator after two agents sold an annual travel accident and sickness policy to a commercial trucker who was excluded from coverage under the policy he purchased.

Neither of the agents held the proper license to sell that type of standalone policy coverage to the consumer.

Council started its investigation after it received a complaint from a consumer that he had suffered a medical emergency while travelling in New Mexico, U.S.A. and had been denied coverage.

The complainant told council that he advised the first agent who sold him the policy in September 2014 that he drove trucks for a living, delivering product in Canada and the United States. The agent sold him an ‘Away from home’ policy, which provides eligible policyholders annual coverage and allows them to travel out of Canada for up to 15 days at a time

According to the complainant, he asked the first agent who sold him the policy if his occupation as a commercial truck driver excluded him from annual coverage. Based on the agent’s reassurance that he was eligible, he purchased coverage under the first policy that ran from Sept. 26, 2014 to Sept. 25, 2015.

The complainant purchased a policy from a second agent for another term that ran from Sept. 26, 2015 to Sept. 25, 2016.

While in New Mexico on Sept. 10, 2015, the complainant suffered a major medical emergency. He was denied coverage by the insurer because of an exclusion in the ‘Away from home’ policy for drivers of commercial vehicles.

Council could not verify from available documents whether the complainant did in fact tell the first agent who sold him the policy that he was a commercial truck driver. The point was moot, however, because the first agent who sold him the policy, although trained on the product, was not licensed to sell accident and sickness policies under the prevailing licensing regime at the time.

CAA Manitoba changed over to the regulator’s new licensing regime, which included a new license for a Restricted Insurance Agent (RIA), in June 2015. The RIA license allows only for the incidental sale of insurance products. In other words, the insurance had to be incidental to the sale of some other travel product.

But in this case, council noted, the complainant did not purchase his personal travel insurance in conjunction with any other type of travel product. And the second agent who sold him the standalone travel policy was not authorized to do so under the RIA license.

“On Sept. 4, 2015, the complainant should have been directed to an agent qualified and licensed to sell the product required by the complainant,” council noted in its decision, “It did recognize that this was not an area of expertise for which the [two] employees of the [CAA Manitoba] were licensed, as the complainant was not travelling as a vacationer.”

Council’s decision also noted that the supervisor should have caught this, because they were or ought to have been aware of the RIA license restriction against selling standalone policies.