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Compliance Process

Investigation and Disciplinary Process

AIC investigations into the conduct of insurance agents, adjusters and insurance companies generally commence in one of two ways. First, the AIC may receive a complaint (either in written or verbal form) regarding an insurance agent, adjuster or insurance company. In the event that the complaint appears to engage sections of the Insurance Act or Regulations a complaint file is opened and an investigator is assigned to investigate the file. If the initial complaint is made verbally the complainant will be asked to provide a written summary of the nature of the complaint and all relevant facts and supporting documentation to the AIC.

Alternatively, even where there is no external complaint made, the AIC may, at its own discretion, commence an investigation file on a regulated party. In the event that the AIC commences the file of its own accord the file is, once again, assigned to an investigator.

Where a file is commenced as a result of an external complaint the AIC sends a letter to the complainant indicating, among other things, that a file has been opened, the Case Management System ("CMS") file number and the name of the investigator. Once this occurs the investigator assembles all relevant information in an effort to determine whether or not there are reasonable and probable grounds to conclude that a section of the Insurance Act or Regulations has been breached.

Regardless of the manner in which the investigation file is commenced, once the investigator has completed the investigation, if the investigator, in conjunction with the Director of Compliance, determines that there are reasonable and probable grounds to believe that an insurance agent or adjuster has breached provisions of the Insurance Act or Regulations disciplinary proceedings will be commenced.

Disciplinary proceedings against insurance agents or adjusters generally take one of two forms. First, proceedings can be initiated by way of Report to Council ("RTC"). The RTC is a written document that sets out the specific allegations being made against the agent or adjuster and contains the evidence supporting the allegation that the agent or adjuster has breached a section of the Act or Regulations. Once drafted, the RTC is sent to the agent or adjuster who is the subject of the allegations. This gives the agent or adjuster the opportunity to review the document and, if they choose, to adduce further evidence or make written submissions by way of Addendum. The RTC and any Addendum or further submissions provided by the agent or adjuster are then given to the applicable industry-specific Council for consideration at one of their meetings. After considering the material the Council issues a written decision that is forwarded to the agent or adjuster by way of registered mail. If they wish, agents and adjusters can appeal these decisions and separate procedures are in place governing appeals.

The second manner by which disciplinary proceedings occur against agents and adjusters is where the agent or adjuster agrees that they have breached a section of the Insurance Act or Regulations. To conclude the matter the investigator will draft and deliver to the agent or adjuster an Agreed Statement of Facts and Joint Submission ("ASOF"). The ASOF contains a summary of all of the relevant facts in the case, an admission that the agent or adjuster breached the Insurance Act or Regulations and proposes a sanction for the specific conduct. It also stipulates that the agent or adjuster waives his or her right to appeal under the Insurance Act and agrees to pay any applicable civil penalty within thirty days. The ASOF also states that acceptance of the agreement shall be at the unfettered discretion of the applicable industry-specific Council. Once drafted, the investigator sends this document to the agent or adjuster for their review and signature.

The investigator then submits the ASOF to the appropriate industry-specific Council for consideration. This Council reviews the ASOF during one of its meetings and, if it is of the opinion that acceptance of the ASOF is in the public interest, the ASOF will be accepted and signed by the Chairperson on behalf of the Council. Acceptance of the ASOF is then communicated to the agent or adjuster by registered mail and any sanction contemplated by the agreement is enforced. In the event that the applicable Council is of the opinion that acceptance of the ASOF is not in the public interest, the matter is returned to the investigator and it then proceeds by way of Report to Council in the manner set out above.

Where the investigation relates to an insurance company, the AIC has the delegated authority to come to a resolution or dispose of the investigation. In the event that the AIC does not otherwise dispose of or resolve an investigation, the investigation file is referred to the Office of the Superintendent of Insurance as it is the Superintendent who has authority to sanction insurance companies for breaches of the Insurance Act or Regulations.