In thc Matter of The FINANCIAL INSl1TU110NS ACT (RS 1996, e.I4I) (the"Act")
and The INSURANCE COUNCIL OF BRITISH COLUMBIA ("Council")
and SUKHVIR SINGH MANN ("Mann")
ORDER Pursuant to section 237 ofthc Act, Council convened a hearing at the request of Mann to dispute an Intended Decision dated September I6,2008.
Thc subject orthc hearing was set ont in the Notice ofIJearing dated March 10,2009. A Hearing Committee heard the matter on March 30 the Hearing Committee to Council at its August I 8,2009 meeting.
Council considered the Report ofthc Hearing Committee and made the following order pursuant to section 231, 236 and 24 I.1 ofthe Act:
1. Mann is prohibited from being an oIllceL directoL shareholder, partner or Levcl 3 general insurance agent or a general insurance agency for a minimum of ten years;
2. Mann is prohibited rrom holding an insurance agent, adjuster or salesperson's licence ror a period or three years, commencing from October 7,2008;
3. if Mann decides to reapply for an insurance licence in the future, he must make full disclosure to any employer/agency he will be authorized to represent, thc circumstances which led to the termination of his insurance agent's licence. Such disclosure must bc madc prior to a liccnee application being approved by Council. This condition will remain in force until one year of active licensed experience is completed;
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'11 and 31 s1, 2009, and presented a Report or
ORDER Suldlvir Singh Mann Page 2 of2
4. Mann is fined $7,500.00: 5. Mann is jointly and severally liable to pay the costs associated with this hearing, assessed at $10,314.39; and,
6. as a condition of this decision, Mann is required to pay the above fine and costs by November 24, 2009.
This order takes eirect on the 24 th day of August, 2009. Chairperson, Insurance Council of British Columbia
INSURANCE COUNCIL OF BRITISH COLUMBIA ("Council")
ImpORT OF THE HEARING COMMITn~E IN TIm MATTER OF TIm FINANCIAL INSI1TUTlONS ACT (S.B.e. 1996, c. 141) (thc "Act")
AND GURVINmm RAJ SINGH LEHAL (" Lchal")
AND SUKHvm SINGH MANN ("Mann")
DATE: Mal'cn 30 th aud 31 't, 2009 9:30 A.M.
ImFORE: BadJal"a MacKinnou Chair Donald Sache Member Robert Scott Member HEARING AT: Insurance Council of British Columbia Suite 300 - 1040 West Georgia Street Vancouver, British Columbia V6E 4Hl
PRESENT: David McKnight Gurvinder Raj Singh Lehal Sukhvir Singh Mann J.,J. McIntyre
On September 16, 2008, Council made an intended decision respecting Lehal and Mann pursuant to sections 231 and 238 of the Act. Lehal and Mann subsequently requested a hearing before Council pursuant to section 238 ofthe Act.
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Counsel for Council Licensee Licensee Counsel for Lehal and Mann
Hearing Report Angust 5, 2009 Gurvindcr Raj Singh Lehal and Sukhvir Singh Mann Page 2 of 17
As set out in thc Notice of Hcaring dated March 10,2009, the purpose orthe hearing was to determine whether Lehal and Mann:
(a) hriled to act in a trustworthy and competent manner, in good faith and in accordance with thc usual practice of thc business of insurance in this matter by:
(i) breaching thc conditions of the Accost Insurance & Financial Centre Inc, (the "Agency") Autoplan Agency Agrcement with the Insurance Corporation of British Columbia C1CBC"); (ii) using their position as directors and principal owners, as wcll as Autoplan agents fCll' lCBC to issuc and/or to pcrmit the issuancc of, and then improperly void ICBC insurance certificates for thc benetlt of customcrs and Jiiends: (iii) allowing employees or thc Agency or othcr individuals to aeecss ICBC's systcm to obtain the personal inhmmttion of an lCBC customer ror an improper purpose; (iv) in litiling to comply with ICBC directives and/or to take correctivc measures aner receiving ICBC warnings rcgarding impropcr insurance transactions conducted by Agency employees; (v) in any other manner; (b) are ablc to continue to carryon the busincss of insurancc in a trustworthy and competent mauncr, in good hlith and in aecordauce with the usual praeticc, as rcquircd under Rulc 3(2) of thc ('ounci/ Rules and section 231 (l lea) or the Act; and
(c) should be subject to any disciplinary or other action in thc circumstances, The lIearing Committce was constituted under section 223 of the Act. This is the report ofthc Hcaring Committee as required by section 223(4) of the Act.
Evidence Evidence reviewed by the Hearing Committee in consideration of this matter: • Exhibit I: Book of Documents of Council • Exhibit 2: Agreed Statement of Facts- provided by Lehal and Mann's counsel and counsel for Council • Exhibit 3: October I, 2002 letter hom Mann • Exhibit 4: Share Purchase Agreement dated August 29,2008 • Exhibit 5: Request for exemption with respect to Level 3 general insurance agent licence li'om Lchal • Sworn testimony of Mann • Sworn testimony of Lehal
Hearing Report Angust 5, 2009 Gurvindcr Raj Singh Lehal and Sukhvir Singh Mann Page 3 of 17
Background The Agency was incorporated on November 23, 1998. At all material times, Mann and Lehal each owned 50 percent of the Agency. Mann was the President of the Agency and Lehal was the Secretary and Treasurcr of the Agency. The nomince of the Agcncy liOln thc period of2004 until Junc 3, 2007, was Raghbir Kaur Atwal CAtwal"). The Agency's main 0111ee is located at 220 7093 King George Highway, Surrey, British Columbia. Maun and Lehal worked at the Agency's King George Highway location.
The Agency had a sccondloeation at 12829 .. 96 Avenuc, Surrey, British Columbia C96 1h Avenuc"), which was purchased by Atwal's husband, Manjat Atwal, in Novcmber 2006, and renamed Atwal' s Insurance and Financial Centre. Atwal worked out of the Agencv' s 96 1h Avenue locatiou. c , In 2007, lCBC conductcd an investigation into the conduct of the Agcncy and its two principals, Lehal and Mann. A hearing into ICBe's investigation was scheduled to be heard on March 11,2008, before rcnc's Vice President of Claims Field Service. On March 7, 2008, lCBC and the Agency reached a settlement agreement with respect to le'Be's investigation (the "Settlement Agreement"). Pursuant to the Settlement Agreement, the Agency agreed on termination of the Autoplan Agency Agreement clfcetive Dccember 31, 2008, unless the Agency was sold in the interim.
Couneilr'cccived notiec of the Settlement Agrecment on May 29, 2008, and the lCBC hearing matcrials on Junc 3, 2008. In addition to the two admitted breaches in thc Settlemcnt Agreement, the hearing material also revealed additional incidents of improper transactions within the Agency and a history oflCBC investigations, of which Council was unaware of at the time.
The Settlement Agreement provided that the Agency could assign or transfer the Autoplan Agency Agreement to an arm's length party. An arm's length party was dellned to be a party in which neither Mann or Lehal had a direct or indirect interest. The Settlement Agreement was signed by Lehal and Mann as authorized signatories ofthe Agency.
Pursuant to the Settlement Agreement, the Agency did not contest any of lCBe' shearing materials including that two material breaches of the Autoplan Agency Agreement had been committed by the Agency:
a) misuse of Temporary Operating Permits CTOPs"); and b) inappropriate access to ICBC systems. 'fhe Agency acknowledged that the material breaches of the Autoplan Agency Agreement constituted just cause pursuant to the Insurance Ael entitling ICBC to terminate the Autoplan Agency Agreement.
Hearing Report August 5, 2009
Gurvinder Raj Singh Lehal and Sukhvil' Singh Mann Page 4 of 17
IC13C reviewed the TOPs voided by the Agency in 2006 and found that oflhe 33 TOPs voided by the Agency in 2006, 12 were improperly issued and voided.
IC13C's investigation into the misuse of the TOPs fell into three categories: a) the Agency assisted hiends and tllVoured clients by issuing and then voiding TOPs after the subject vehiclc had passed AirCare; b) the Ageucy assisted MS Punjab Excavating & Demolition Ltd. ("MS Punjab") to obtain insurance without paying by issuing and voiding TOPs four times in 2006; and c) excessive time between issuing and voiding of TOPs led to the conclusion that the Agency assisted customers in obtaining insurance without paying l'll" it.
Testimonv of Mann Under direct and cross examination, Mann testilied under oath to the ICJllowing: 1. he is presently 29 years old and was Erst licensed as a Level I general insurance salesperson in September 1998. His licence was then upgraded to a Levcl 2 general insurance agent in November 15, 1999;
2. he invested in the Agcncy in 2001. He was a SO percent owner and Prcsident; 3. he started a construction business early 2007, and has been working at this venture full time since the termination by Council of his Levcl 2 general insurance agent's licence;
4. hc has no interest in carrying on business in the insurance induslry. He requested a hearing Ii·om Council as he wants his name cleared;
S. he has never donc an IC13C 'batch' in his career, but is aware ofthe purpose and procedures involved;
6. he stated that the lC13C batching was done by other employees; Harm Atkar or Raj Lehal;
7. ICBC conducted an investigation in 2007 into the Agency and its two principals, Mann and Lehal. A hearing into lC13C's investigation was scheduled to be heard on March 11,2008;
8. on March 7, 2008, the Settlement Agreement with IC13C was agreed to and uncontested; as Mann believed that 'you cannot go against IC13C ancl win'. He agreed to the facts in the Settlement Agreement as he wanted to maintain the value ofthe Autoplan contract as part of any agreement to sell thc Agency;
Hearing Report Augnst 5, 2009 Gurvindcr Raj Singh Lchal and Sukhvir Singh Manll Page 5 of 17
9. he was not aware of any concerns that ICBC had with the Agency until mecting with the ICBC Speeiallnvestigations Unit (SIU) investigators;
10. he was aware oflCBC's rules with respect to 'eonnict of interest' prior to processing the transaction for his mother and brother. He stated that his brother, mother and Elther as well as himself; all reside in the same house. He could not explain why his mother and brother told ICBC claims staiT that Mann had indicated his mother as the principal operator when that was not the ease;
11. he stated that ALL Ageney stall; himself included, has successfully completed the lCBC Autoplan Essentials course, and that all staiTwere aware of lCBC's rules with respect to the use of personal information [i'om the computer system;
12. he personally did not issue TOPs incorrectly, but the Agency did. He acknowledged he did process the TOP for his friend, D.R., however he was not the person who wrote VOID on the TOP. He also admitted that he did not sight the British Columbia driver's licence although he indicated otherwise on the form;
13. he concentrated on commercial insurance and his partner Lehal was responsible [cJr the supervision of the personal lines and Autoplan; and
14. both he and Lehal were responsible lor the hiring of staff members.
Testimonv of Lebal Under direct and cross-examination, Lchal testified under oath to the Ic)llowing: 1. he was a previous law graduate in India and practiced law Ii'om 1990 to 1994; 2. he was Ilrst licensed as a Level I general insurance salesperson on January 16,200 I, and subsequently upgraded to a Level 2 general insurance agent's licence on July 12, 200 l. Lehal was also licenscd as a life and accident and sickness insurance agent with Lifeview Financial Services Inc.;
3. when he began working with the Agency, he focused on Autoplan. He then moved into Personal Lines and became responsible lor rCBC and Personal Lines in the oflice;
4. he became a 50 percent shareholder in the Agency in June 2004 (and Secretary and Treasurer);
5. he stated that both himself and Mann were responsible to train staiTwith respect to ICBC Autoplan;
6. both himself and Mann had advised ALL staffthat lCBC doeuments need to be initialed as to who had processed the transaction;
Hearing Report AlIgnst 5, 2009 Gurvinder Raj Singh Leila} and Sukhvir Singh Maun Page 6 of 17
7. ICBC batching was done approximately twice a weck; 8. if there were problems in the oUice, he always discussed them with Mann; 9. he acknowledged that some clients could phone the office for TOPs and the office would issue thGm on request. He stated that he would reeognizG their voice and while he would indicate to the contrary on the Icnc document, British Columbia driver's licences were not always sighted;
10. he admitted to voiding TOPs on two occasions, as they were NOT paid illr nor used, and the documents never left the oUice;
II. on one orthcse occasions, he voided the transaction because the client bought the plate (i.e. renewed the insurance):
12. he stated that if a client was involved in an accident while operating a vehicle under a TOP, the client would then be expected to pay the applicable premium:
13. he stated he had read the lCBC Settlement Agreement; fully understood; and did not contest any of the content or material;
14. Atwal was nominee oCthe Agency, and she attended meetings a kw times; IS. he had no knowledge about the arrangcment for the Atwals to purchase the 96 th Avenue location in 2006, alter two years of involvement. Mann never disclosed this to him until the actual sale took place; and
16. he stated he was unaware of the previous incidents that Mann was involved with regarding ICBC transactions.
Closing Arguments of Council bv David McKnight 1. The evidence supports the conclusion that Mann and Lehal knowingly altered TOPs to falsely misrepresent that their clients were insured when they were not, thereby deh'auding Icnc of insuranee premiums.
2. Mann, Lehal and Ageney employees assisted fi'iends and favoured clients by improperly issuing and then voiding TOPs in order to assist their clients in completing AirCare.
3. In 2006, the Ageney improperly issued and voided twelve TOPs. These include: • that Mann assisted his hiend and client in the issuance and voiding a TOP so that his friend could attend AirCare;
Hearing Report August 5, 2009 Gurvindcr Raj Singh Lellal and Sukhvir Singh Mann Page 7 of 17
o the Agency assisted a regular corporate customer on four occasions in 2006 by issuing TOPs to this corporate customer without requiring the corporate customcr to pay for it; and • Lehal assisted his h-iend and another client in the same manner. This was supported by Gurinder Singh Dhesi CDhesi"), a Level I general insurance salesperson employed at the Agency at the time. Dhesi indicated that Lehal actively instructed him and other Agency employees on how to void TOPs in order to avoid payments. It is signiEcant that Lehal did not challenge or contest any assertion by ICBC or by Dhesi that he had instructed and encouraged Agency employees to assist friends and preferred customers in the issuance of TOPs to avoid insurance.
4. It does not matter who was responsible for issuing and voiding corporate customers' TOPs because both Mann and Lehal, as principal owners of the Agency, engaged in this practice, and encouraged other employees to do the same. Thc evidence establishes a culture of uncthieal business practices, compliance issues and, inappropriate and untrustworthy business dealings with [CBe. As a resuIt of the Agency's misuse of TOPs, [CBC was denied an insurance premium but was put "on risk" should one of the Agcncy's customcrs been in an accident on the way to or from AirCare.
5. While Lehal and Mann argue they did not receive a "direet" benefit liOln their actions, this is irrelevant. The "motive" and most plausible explanation [Clr their actions in voiding TOPs was that they were attempting to garner favour with preferred clients and customers, which ultimately would lead to other beneficial business opportunities such as clients keeping their business witb thc Agency and encouraging othcrs to place insurancc business through the Agency. [n this regard, Mann and Lehal implemented a practice to manipulate the system lor their personal benefit.
Inappropriate Access to ICEC Systems [. Evidence exists that Dhesi called someone at the Agency to access the 1CBC system on his behalf. While Dhesi never stated it was Lehal or Mann, or that they had knowledge, the evidence sllggests Dhesi was acting in concert with someone at the Agency. This in itself is evidence of improper and inadequate management practices at the Agency.
Hearing Rcpot"t August 5, 2009 Gurvinder Raj Singh Lellal and Sukhvir Singh Manu Page 8 of 17
2. While both Dhesi and Mann's brother are careful not to implicate Mann as being involved in improperly accessing the ICBC database in order to assist Mann's brother in identifying persons relating to one of his businesses (a truck park), it is clear that this practice took place. Both Mann's brother and father were both owners of the truck park and Mann was the previous owner of the property. It seems highly improbable that Mann would not have been aware that the access was taking place even if he did not personally partake in the inappropriate access of the lCBC database.
3. Regardless of Mann's evidence in this regard, he lacks credibility and it is opcn for the Committee to conclude that Mann's involvement in this matter was greater than he is willing to acknowledge. At the very least, it again speaks to a lack of proper supervision and management at the Agency with rcspect to the ICBC database. It is further indicative of a pervasive culture of improper conduct and unethical business practices at the Agency.
Misstating Principal Operators and Prior Breaches I. With respect to Mann's brother and mother, and in another case involving Mann's tt-iends, the evidence established that Mann knowingly misrepresented the principal operator of the vehicles in order to avoid, and thcreby deii'aud, ICBC of a higher premium. At the very least, the evidence establishes that Mann and Lehal hliled to disclose the truth ofthe altered document or misrepresented that their clients were insured when they were not by knowingly failing to comply with the Autoplan Agency Agreement guidelines.
2. Mann's submissions that he was not involved in misrepresenting his mother as principal operator of the vehicle, or with respect to his Ii'iend, B.S., should be given no weight by the Committee. In order to accept Mann's submissions, one has to discount ICBe's matcrials in whieh Mann's mother and brother clearly state that the principal operator was misrepresented in both instances in order to avoid paying a higher premium. Again, these submissions were included with the materials that ICBC submitted as part of the Settlement Agreement and were not eontested by Mann in Mareh 2008. It brings into question Mann's credibility to now eontest or challenge ICBC's Endings. It further speaks to Mann's lack of credibility and illustrates a lack of contriteness that he is now attempting to del1ect blame for his involvement in what can only be seen as a li'audulent misrepresentation against ICBC in order to save money.
3. On a lesser level, it is not disputed that Mann was not complying with ICBC poliey with respect to eonnict of interest issues.
Hearing Report August 5, 2009
Gurvinder Raj Singh Lehal and Sukhvir Singh Mann Page 9 of 17
4. Bolh Mann and Lehal were experienced agenls wilh Level 2 general insurance agent's licences. Both Mann and Lehal provided letters to Council eonfirming that they were involved in the management oflhe Ageney. Atwal had no involvement in batehing of ICBC documents or the day-to-day operations of the business. Atwal as a "lame-duek" nominee who in actual t~lct had little, if any, involvement or knowledge in the day-to-day operations of the Ageney. This allowed Mann and Lehal to engage in a premeditated praetiee to manipulate the system without reeourse and without the watchful eye of a nominee. They did this with respect to TOPs which they batched so that they could control the degree to which the improper access to the TOPs would become known; by allowing Dhesi unfettered access to the [CBC database, and with respect to misrepresenting principal operators on vehicles in order to avoid paying a higher premium.
). Atwal's statement is consistent with the linding that she had no knowledge that the TOPs or any other inappropriate conduct was taking place at the Agency. Upon tlnding out of the allegations through [CBe's investigation, Atwal promptly resigned.
6. [ftbis evidence does not establish thc direct culpability of Mann and Lehal in terms of the cxtent of their involvement in the inappropriate conduct, it certainly speaks to their lack of competence in managing an Agency in which they were the owners and operating minds.
Closing Submission of Lehal and Mann by J.J..Mdnty~ ("Mdntyre) 1. Council's ease is based primarily on the ICBC Investigation and Settlemcnt Agreement Mclntyre acknowledged that two material hreaches took place, conclusions admitted, but nol 'how the conclusions were arrived at'
2. Out 01'33 TOPs, ICBC only has 'problems' with 12. As such, 21 TOPs were fine. 3. '1'here is no dispute that Dhesi aecessedlCBe's database for his own personal benefit.
4. With respect to the previous incidents involving Mann, Mann never agreed with ICBC conclusions such as the example relating to Mann's friend, H.S.
5. McIntyre suggested the Hearing Committee give limited weight to ]CBC's argument and conclusions with respect to accuracy. While Lehal and Mann agreed to the information contained in the Settlement Agreement, he argued they had no alternative. It was a business decision.
6. Mann's responsihility was ICBC Heets and commercial insurance, and Lehal's responsibility was Personal Lines and [CBC.
Henring Report August 5, 2009 Gurvinder Raj Singh Lellal and Sukhvir Singh Manu Page 10 of 17
7. Mann admits to not sighting the British Columbia driver's licence when completing the insurance transaction TOP for elient D.R.
8. There is no evidence that Mann issued TOPs incorrectly, with the purpose of benefiting Agency clients.
9. Lchal admits to not handling the TOP transactions correctly [ilr two clients, and he assisted clicnts Iilr the bendit of the Agency.
10. Melntyre stated that it is a competence issue only with respect to the issuance of TOPs.
I I. Melntyre argued little or no weight should be given to Dhesi's interview. Mann terminated Dhesi as soon as he received full Iilcts and inli)l'l1lation from the lCBC SIU investigators. The question was never asked of Agency staff in regards to who assisted Dhesi in accessing the lCBC database.
12. While there may havc been a lack of guidelines Iill' the Agency itself and Agency staff there is no evidence that Lehal or Mann I~liled to follow directives that lCBC provided.
13. Conduct is difCcrent for both individuals: • Mann bad vcry little involvement. There is no indication that Mann was trying to sidcstep guidelines. He did not instruct; did not supervise; was not incompetent and should bc able to carryon in the business of insurance if he so desired. • There is no evidcnee that Lehal was not competcnt, untrustworthy or did not act in good lilith.
14. Lehal and Mann were not aware of Dhesi accessing the lCBC system for personal use. Upon knowlcdge of this conduct, they terminated Dhesi's employment.
Hearing Committee Findings AJ\er evaluating the evidence put before it, the Committee concluded that Lehal and Mann's conduct in this matter constituted a breach of section 231 of the Act and Principles of the Code of Conduct pursuant to section 7(8) of the Council Rules, in that they f~liled to act in a trustworthy and competent manner, in good faith and in accordance with the usual practice of the business of insurance.
More speciJIeally, the Committee found that Lchal and Mann: I. used their position as general insurance agents and as ofJIcers, directors and principal owners of an insurance agency, to beneflt their friends, family and clients, prejudicing 1CBC in the process through the misuse of TOPs;
Hearing Report August 5, 2009 Gurvindcr Raj Singh Lehal and Sukhvir Singh Mann Page 11 of 17
2. allowed, either by act or omission, the Agency to breach the conditions of its Autoplan Agency Agreement with lCBC;
3. allowed or l~liled to prevent employees of the Agency [i'01TI accessing lCBC's database to obtain the personal inlel1'lnation on ICBC customers Ielr purposes other than intended;
4. l~liled to comply with ICBC directives and/or take corrective measures after receiving ICBC warnings regarding improper insurance transactions and improper usc of ICBC database by Agency employees; and
5. biled to ensure that the Agency's operations were properly supervised by a CjualiEcd nominee.
The Committee's reasons for these Endings arc set out below: Code of Conduct - Principle 3 .. Trustworthiness Section 3.2 You Inusl be IrusIII·orlhy. conducling all pJ'olessionu/ Clclivilies wilh inlegrily. reliabilily Clnd honesly. The principle OllJ'uslwoJ'lhiness eXlends beyond insu!'ance Clclivilies. YOUI' conduci in olher Clreas Inay rejleci on your Iruslworlhiness and CClII inlo queslion your suilabilily 10 hold an in\'U/'ance license.
Code of Conduct -Principle 4 - Good Faith Section 4.2 You musl carry 01'1 the business oj'insurance in goodfCtilh. Goodjitilh is honesly and decency olpurpose and a sincere intention on your pO!'1 10 Ocl in a manner which is consislenl wilh your clienl's 01' principal's besl inlerests. renwiningjililhjitl to your duties and obligolions as an insurance licensee. You also owe a duty olgoodjitilh 10 insurers, insured's, jellow licensees, regulCiIOfY bodies and Ihe public.
Code of Conduct - Principle 5 -- Competence Section 5.2 You must conduci all insurance oClivities in a compelenl manner. Competent conduci is choraclerized by the application olknowledge and skill in a manner consislenl lvilh the usual praclice oflhe business of imumnce in Ihe circumslances. You n/usl continue your educalion in insurance to refnain current in your skills and knowledge.
I-fearing Report August 5, 2009 Gllrvindcr Raj Singh Lellal and Sukhvir Singh Mann Page 12 of 17
Code of Conduct - Principlc 7 - Usual Practice: Dcaling with Clicnts Scction 7.2 When dealing wilh client, you musl: • prolecl clienls . inlcresls and privacy; @ evaluate clients -' needs: • disclose all malerial in;'iJrIJWlion: and ® acl wilh inlegrily. cOlnpelence and lhe ulmosl goodjililh Code of Condue! ". Principle 8 .. Usual Practice: Dealing with Insurers
Section 8.2 You have a dUly 10 insurers wilh )"h01l1 you are lransacling business 10: ® Inake reasonable inquiries inlo lhe risk; ® provide/illl and accnrale in;'imllalion: • prmnplly deliver all insul'Clnce doclI/IIenls and Inonies due: ® represel1f Ihe insurer 's products/ilirly and accuralely: • adhere 10 lhe aulhorily granled by the insurer; and • promplly reporl all pOlenlial claims. You 1Ilusl nol de/ilJIIe 01' discredil insurers Trustworthiness and ulmost good faith are essential elements in every insurance transaction. The Committee finds that Lehal and Mann did not meet these requirements in that they knowingly issued or allowed to be issued TOPs and then subsequently voided them for certain fi'iends and favoured clients. While it was argued that these occurrences werc few and represented small amounts of money, the issue is that Lehal and Mann had a duty 10 ICBC 10 ensure that insurance documenls were prepared and issued properly and that the appropriate premiums were collected and remitted to IeBe. Instead, Lehal and Mann prepared or allowed to be prepared TOPs in an inappropriate manner and then improperly voided the contracts when the client "no longer required them." By executing the above, they allowed members of the public to operate vehicles that mayor may not have actually been insured, as well as denying ICBC the correct premiums when the TOPs were voided.
The Committee found there is clear evidence that improper use and access ofthe ICBC database was occurring at the Agency. The evidence demonstrated that the Agency employee, Dhesi, accessed the lCBC database on numerous occasions for reasons other than intended or permitted. Some of the accesses by Dhesi were to assist Mann's brother in obtaining information relating to a truck park that Mann's brother and LIther opcrated.
Hearing Report August 5,2009 Gurvilldcr Raj Singh Lellal and Sukhvir Singh Manll Page 13 of 17
The filct that Mann lived in the same home as his brother and f~lther, makes it difllcult for the Committee to believe that Mann was not aware this was occurring.
As ot1icers, directors and major shareholders of the Agency, Lehal and Mann had a duty to ensure the privacy of the public's information was maintained. 'fhe need to maintain the confidentiality ofthe public's inf(llmation is a key !llctor in the public having confidence in the insurance industry. Lehal and Mann, regardless of whether they were aware of the breaches in eonfidcntiality, had a duty to ensure such breaches did not oeeur. The tilet that they did not have a nominee or Level 3 general insurance agent in regular attendance at the Agency ofl!ee, only places a greater responsibility on both individuals to ensure such events did not occur.
The Committee conelLlded that Lehal and Mann demonstrated a lack of competence in ensuring that these violations did not occur, and this was compounded by thc f~lct that even aCter receiving noticcs and reminders (i'om lCBC regarding these violations, thcy continued to occur. The fact that both Lchal and Mann denied knowledge about any brcaches in contldcntiality was not credible. Furthermore, even if the Committee f(mnd l.chal and Mann to be credible. the f~\cl such breaches had occurred, retlccted directly on their ability to properly manage and operate an insurance agency.
In the matter involving Mann's brother and mother, and the misrepresentation of who was the principal operator of a motor vehicle, the Committee Cound that Mann proeessedthcse transactions and they were proceed in a manner in order to avoid, and thereby deli'aud, lCBC of the correct and higher premium. Mann's submissions that he was not involved in misrepresenting his mother as principal operator of the vehicle were not accepted.
In addition to the issues above, the Agency was subject to disciplinary action by lCBC on two occasions between 2003 and 2005. In these cases, a number of improper practices were identified including:
a) enrolling new Autoplan 12 accounts by accepting non-personalized voided cheques; b) accessing previous plate history to obtain bank account information; c) obtaining information fi'om a policy belonging to another person in the same household, rather than the intended registered owner; d) knowingly recording, incorrectly, who the principle driver of a vehicle was; and c) accepting cheques for transactions ii'om customers with "cash only" status, contrary to the Autoplan Manual.
HeHring Report August 5, 2009
Gurvindcr Raj Singh Lehal and Sukhvir Singh Mann Pagcl4ofl7
These actions only supported the Committee's 11ndings that Lehal and Mann did not operate as insurance agents and agency owners in accordance with Council's Rules. Even though the Agency had been the subject of two disciplinary actions by ICBC, Lehal and Mann allowed the Agency to carryon business contrary to its Autoplan contract and lCBC policies. Lehal and Mann challenged these events as well as the findings set out in the Settlement Agreement with ICBC, arguing you cannot 11ght IC13C. The Committee does not accept this argument. Lehal and Mann voluntarily entered into the Settlement Agreement with ICBC, which set out their conduct and breaches. The Committee is not prepared to discount the Iilcts contained in the Settlement Agreement on the basis that it was convenient for Lehal and Mann to agree to them. Furthermore, the Committee found Lehal and Mann's attempts to distance themselves hom the statements in the Settlement Agreement, brought into question their credibility and a lack of willingness to aecept responsibility lilr what was going on at the Agency, a responsibility as officers, directors and majority shareholders which was entirely theirs.
Recommendations of the Hearing Committe~ The Committee considered the principles of sentencing and Council's sentencing guide, articulated in Council Policy 54.1, when preparing a recommendation to Council on penalty. The Committee also reviewed previous cases and, in particular, considered the lllllowing precedents:
e Jagjit Cheema's ("Cheema") life and accident and sickness insurance agent licence was cancclledll)r a minimum period of two years after Council determined he was not trustworthy and did not intend to publicly carryon the business of insurance in good faith. He improperly accessed ICBC's database to obtain sensitive personal and conlldential information about another person with the intention of sharing that information with a third party he knew was involved in criminal activity.
e Apex Insurance Services Ltd. et aL (the "Agencies") and Amy Man Mee Lau ("Lau") processed unnecessary AutopIan transactions on their own vehicles or on other Lau family members' vehicles for thc sole pnrpose of generating extra commissions and fees 101' the agcncies. Lau was a Nominee 101' one of the Agencies and acknowledged that over a three year period, 243 ICBC transactions had been processed on vehicles owned by her or family members at one of the Agencies, when she was the Nominee. Lau claimed that she did not process any of the transactions herseIC or have any knowledge that the transactions had been carried out. She denied that she had any involvement in effecting excessive transactions for personal gain.
Hearing Report Augnst 5, 2009 Gurvindcr Raj Singh Lellal and Sukhvir Singh Mann Page 15 of 17
Council submitted that Lau's ignorance regarding the excessive transactions spoke to her incompetence, negligence and inability to manage as Nominee. As a result, Lau's Level 3 general insurance agent nominee's licence was cancelled l(lr a minimum period of two years. During this period, she was issued a Level 2 general insurance agent's licence which was suspended for a period of nine months. Lau was Ened $5,000.00, the Ageneies were cach tined $20,000.00 and Lau and the Agencies were helcljointly and severally liable to pay Council's costs of iuvestigating the matter, assessed at $7,800.00.
• Glenn Frank Bergen accepted investment monies for a development project located in the Barbados iJ'om two of his clients and deposited the funds into a personal bank account lelr usc. The licensec l~liled to keep his clients intemned of the investment and l~liled to provide the elients the comJ(lrt that they were looking for to ensure their investment was sate. While the monies were eventually repaid to the clients, by misusing the li.mds and breaching his clients' trust, Council lelUnd the licensee did not act in good t~lith and in a trustworthy manner. As a result, the licensee's liJC and accident and sickness insurance agent licence was cancclled for a minimum of 12 months Ii'om the date of Council's order. the licensee was fined $6,000.00, and was liable to pay Council's eost in the investigation of the matter, assessed at $1,264.20.
• Baljinder Singh Takhar abused his position as an insurance salesperson by processing 163 Autoplan transactions on his own wiiC's vehicles over a 26 month period, thereby earning in excess of $4,700.00. Council concluded that the licensee t~llsely executed insurance doeuments by signing on behalf of his wile, the insured, without proper authorization, and made material misstatements to lCBC regarding the insurance claim. As a result, the licensee's licence was cancelled for a minimum period of one year hom the date Couneil' s order took effect; the licensee was tIned $5,000.00; and the licensee was liable to pay half of Council's investigation costs into the matter.
• Aurora Underwriting Services Inc. ("Aurora"), Nona Eric McCreedy ("McCreedy") and Linda Dianne I-layne ("Hayne") altered Policy Dcclaration pages and proposals to increase the amount of premiums and failed to disclose the increase of the premiums to the clients. Further, the Aurora parties failed to place insurance coverage as instructed by not providing complete and accurate risk information to the sub-broker and failed to contIrm that eoverage was in place. As a result, Council found that the Aurora parties failed to aet in good faith, in a trustworthy and tInancially eompetent manner, and ordered that the licensees be suspended for a period of 18 months; that the Agency be fined $20,000.00; that McCreedy be tined $10,000.00; that I-layne be tIned $5,000.00; and that all of the parties be held jointly and severally liable for Council's investigative costs and hearing costs.
Hearing Report August 5, 2009 Gurvindcr Raj Singh Lellal and Sukhvir Singh Mann Page 160fl7
• Derek David Henneberry ("Henneberry") improperly accessed [CBC's dalabase to provide a third party with personal information aboul an [CBe clienl who then used Ihe information 10 threalen the client during a road rage incident. He also improperly rated his own vehicle and vehicles owned by aeq uaintanees, on at least 17 occasions, in order to circumvent AirCare. He was found not suitable to hold an insurance licence for a minimum period of two years and was required to pay Council's investigation costs.
• Jocelyn Fenclon ("Fenelon") was ICJlll1d to have baekdated an ICBC Autoplan policy in order to circumvent a violation tickct that had been issued to him by the RCMP for driving without insurance; had driven vehicles without insurance; and had taken and rnisusedlCBC validation decals IClr personal use on his own vehicles to give the appearance that they were insured when they were not. As a result, the Hearing Committee [(Jlll1d that, pursuant to section 238, Fenelon's life and accident and sickness insurance agent licence should remain cancelled for a minimum period of three years commencing from February 15,2008, that hc be JIned $5,000.00; that he pay Council's investigation costs assessed at $10,187.50; and that he pay Council's hearing costs assessed at $5,786.22. As a condition of this decision, Fenelon must JIrst pay the above mentioned JInes and costs if he intends to make an application for an insurance licence al'ter February 15,2011.
Note: FencIon appealed to the Financial Services Tribunal, and the Appealed Order was varied by:
I. changing the commencement date of the three year period during which Fenelon cannot hold a general insurance agent licence from February 15, 2008 to November 7, 2007; 2. allowing Fenelon to attempt to resume working in a field of insurance other than general insurance two years alter February 15,2008; 3. eliminating the fine of $5,000.00; and 4. changing the deadline for paying the awarded costs to a date prior to Fenelon making an application for any insurance agent's licence under the Act.
Based on the above, the Committee is recommending the following disciplinary action to Council:
1. Lehal a) should be prohibited from being an officer, director, shareholder, partner or Levcl 3 general insurance agent of a general insurance agency for a minimum of ten years; b) should be prohibitedli'om holding an insurance agent,adjuster or salesperson's licence Ic)!' a period ofthree years;
Hearing Report August 5, 2009 GlIrvinder Raj Sillgh Lehal alld Sukhvir Singh Malin Page17of17
c) be required to disclose this decision to any future employer during the first year should he decide to return to the general insurance industry; and d) should be fined $7,500.00.
2. Marm a) should be prohibited from being an officer, director, shareholder, partner or Level 3 general insurance agent of a general insurance agency for a minimum ten years; b) should be prohibited from holding an insurance agent,adjuster or salesperson's licence for a period of three years; c) be required to disclose this decision to any future employer during the first year should he decide to return to the general insurance industry; and d) should be fined $7,500.00. In developing its recommendations, the Committee was also prepared to assess a pOltion or all of the Council's investigation costs. Before it had completed its deliberations, the hearing for the Agency was completed and the Committee noted that the Agency was assessed all of these costs. As it did not want to create confusion, the Committee, while believing Lehal and Mann should be liable for some or all of the investigation costs, decided not to make a recommendation on investigation costs.
With regards to the three year licence prohibition, the Committee feels the three year period should commence from when Lehal and Mann last held an insurance licence. The Committee also feels that the prohibition should apply to every class or category of licence. The actions of Lehal and Marm go to the heart of every licensee's suitability and the Committee feels they are not suitable to hold any insurance licence.
On the issue of hearing costs, the Committee recommends that both Lehal and Mann be assessed, both jointly and severally, all of Council's costs. The Committee's findings go directly to Lehal and Mann's suitability, and based on Council's policies, the assessment of Council's hearing costs are warranted in this situation.
Dated in Vancouver, British Columbia on the 5~y of August, 2009. Barbara MacKirmon CAIB,
, hair of the Hearing Committee