COURT OF APPEAL FOR ONTARIO
WEILER, GOUDGE AND SIMMONS JJ.A.
B E T W E E N :
JAGUAR INSURANCE BROKERS INC.
David F. Bell for the appellant
Appellant
- and -
REGISTERED INSURANCE BROKERS OF ONTARIO
John Goldsmith and Melanie Hubbard for the respondent
Respondent
Heard: December 8, 2006
On appeal from the judgment of the Divisional Court (Associate Chief Justice J. Douglas Cunningham, Justice G. Dennis Lane and Justice Anne M. Molloy) dated November 28, 2005.
BY THE COURT:
1Jaguar Insurance Brokers Inc. has carried on business as a facility insurance broker for many years. On July 14, 2004, the Qualification and Registration Committee ("the Committee") of the Registered Insurance Brokers of Ontario ("RIBO") revoked Jaguar's Certificate to carry on business. It did so on the basis that Jaguar did not meet the "Qualification Guidelines for Registration of Member Firms" issued by RIBO requiring that a broker maintain at least two contracted markets. Jaguar appealed the Committee's decision to the Divisional Court, which upheld the revocation.
2Before us, the appellant submits that the effect of the Guidelines is to amend and contradict the Registered Insurance Brokers Act, R.S.O. 1990, c. R.19 (the "Act") and the regulations enacted thereunder, and that the Guidelines are therefore beyond the jurisdiction of the Committee. We will elaborate briefly.
3The appellant submits that the Committee's powers and duties are circumscribed by the Act. The Act, it submits, does not give the Committee power to regulate how the broker carries on business. Viewed as a whole, the purpose of the Act and regulations is to deal with education, conduct, competency and maintenance of e & o insurance. They do not address how an insurance broker should conduct its business.
4In revoking Jaguar's Certificate to carry on business, the Committee relied on s. 6(1)(a)(i) of Regulation 991 of the Act. Sub-paragraph 6(1)(a)(i) of the regulation states:
6(1) A corporation is qualified to be issued and hold a certificate of registration as an insurance broker where,
(a) the only business conducted by it is that of,
(i) an insurance broker.
5Insurance broker is defined in the Act as, inter alia, "any person who for any corporation acts or aids in any manner in soliciting negotiating or processing any contract of insurance whether or not the person has agreements with insurers".
6Jaguar submits that, particularly when read in combination with the definition of broker set out in the Act, s. 6(1)(a)(i) of the regulation does not require that a broker have any contracted markets. Rather, the purpose of the section is to prohibit registered brokers from carrying on any business other than that of a broker. It does not give the Committee the power to issue or enforce any requirements concerning how a broker carries on business.
7We disagree. In our view, the requirement that a registered broker maintain two contracted markets is a reasonable interpretation of "business" as it appears in s. 6. Jaguar does not contest the authority of RIBO to issue guidelines to ensure the efficient and effective administration of the Act. This interpretation of s. 6 by the Committee is founded on the Guidelines which provide for two contracted markets to ensure that the public can be offered a choice of insurance products by a registered broker. The Committee's decision does not purport to change the statutory definition of "broker". Rather, it interprets the phrase "business carried on by" in s. 6(1)(a) of the Regulation. This interpretation is reasonable given its reliance on the Guidelines and their public interest objective. Because the interpretation of this section depends so heavily on the expertise of the Committee and its familiarity with the insurance broker business, reasonableness is the appropriate standard of review.
8Jaguar also submits that, rather than true administrative guidelines, the Guidelines are mandatory, making them de facto laws requiring statutory authority. Again, we disagree. On a plain reading, the Guidelines are clearly discretionary in nature. If the qualification of providing two letters from contracted insurers is not met, there is no automatic sanction for non-compliance. It is left to the Committee's discretion as to whether to revoke an existing registration. Further evidence of the discretionary nature of the Guidelines is also found upon a reading of the Guidelines as a whole.
9Accordingly we would uphold the decision of the Divisional Court and dismiss the appeal.
10Costs of the appeal are to the respondent and are agreed at $10,000.
RELEASED: December 21, 2006 "KMW"
"K. M. Weiler J.A."
"S.T. Goudge J.A."
"Janet Simmons J.A."