Citation: Myers v. Ontario (Superintendent Financial Services), 2016 ONFST 19 Decision No. IA678-2016-1 Date: 2016/11/07

IN THE MATTER OF the Insurance Act, R.S.O. 1990, c. I.8, as amended (the “Act”), in particular sections 392.4 and 407.1;

AND IN THE MATTER OF a Notice of Proposal to Refuse Application against Hugh Ashley Myers, dated February 24, 2016, issued by the Executive Director, Licensing and Market Conduct Division by delegated authority from the Superintendent of Financial Services;

AND IN THE MATTER OF a Request for Hearing in accordance with subsection 407.1(3) of the Act.

and

BEFORE:

Denis Boivin Chair of the Panel and Vice-Chair (Acting) of the Tribunal

Jeffrey Richardson Member of the Panel and Member of the Tribunal

Patrick Longhurst Member of the Panel and Member of the Tribunal

For the Applicant – No One Appearing

For the Superintendent of Financial Services – Michael Spagnolo

DATE HEARD: August 17, 2016

1Hugh Ashley Myers is the Applicant in this matter. On September 18, 2015, Mr. Myers applied to the Superintendent of Financial Services (the “Superintendent”) to renew his licence to conduct business as a life insurance and accident and sickness insurance agent (hereinafter “life insurance agent licence”). On February 24, 2016, an authorized delegate of the Superintendent issued a proposal to refuse Mr. Myers’ application on the ground that he allegedly failed to comply with a number of requests for information made to him.

2Mr. Myers requested a hearing before the Financial Services Tribunal (“Tribunal”) pursuant to subsection 407.1(3) of the Insurance Act, R.S.O. 1990, c. I.8. He wants the Tribunal to order the Superintendent to renew his life insurance agent licence. On April 25, 2016, the Chair of the Panel conducted a Prehearing teleconference with the parties, and it was determined that the hearing would take place on August 17, 2016.

3On May 2, 2016, the Registrar issued a Notice of Hearing to both parties. This Notice included the following statement: “IF YOU DO NOT PARTICIPATE in the hearing in accordance with this Notice, the Tribunal may proceed without your participation, and you will not be entitled to any further notice in this proceeding.” [Emphasis in original]

4The Applicant did not appear on the date of his hearing. The Registrar made a number of attempts to contact Mr. Myers between 9:30 AM and 10:00 AM, and left a message on his voicemail. Thereafter, the Registrar explained the manner in which the Notice of Hearing had been served upon the Applicant. Having satisfied themselves that Mr. Myers had received proper notice and had not made any attempt to adjourn the proceeding, the Panel decided to proceed in his abence, pursuant to Rule 34.01 of the Rules of Practice and Procedure for Proceedings Before the Financial Services Tribunal. In the weeks that followed, the Applicant did not contact the Registrar in order to explain his absence, nor did he make any inquiry about the status of his Request for Hearing.

5For reasons that follow, we are ordering the Superintendent to carry out his Notice of Proposal – namely, to refuse to renew Mr. Myers’ life insurance agent licence.

II. issues

6The Prehearing Conference Memorandum and Notice of Hearing that were prepared for this matter identify two issues:

a. Did Mr. Myers fail to comply with Ontario Regulation 347/04, namely clauses 7(3)(c), 7(3)(d), and 7(3)(e), by not providing the requested information to the Superintendent?

b. If the answer to issue (a) is yes, does this afford reasonable grounds for the belief that Mr. Myers is not a suitable person to receive a licence within the meaning of clause 4(1)(i) of Ontario Regulation 347/04?

III. facts

7Counsel for the Superintendent called one witness, Ms. Artee Bhiekham, a Licensing and Registration Specialist familiar with Mr. Myers’ case. He introduced six documents as exhibits to her testimony, but did not file any Affidavit. As previously noted, the Applicant did not appear on the day of his hearing.

8On the basis of the clear, cogent and convincing evidence presented by counsel for the Superintendent, we make the following findings of fact on a balance of probabilities:

a. Mr. Myers first received his life insurance agent licence on November 14, 2011. This licence expired on November 13, 2013.

b. Almost two years later, on September 18, 2015, Mr. Myers applied to the Superintendent to renew his life insurance agent licence.

c. Because Mr. Myers submitted his renewal application more than 30 days after the expiry of his licence, his file was assigned for review to Ms. Bhiekham, a Licensing and Registration Specialist with the Financial Service Commission of Ontario (“FSCO”).

d. On October 6, 2015, Ms. Bhiekham sent an email to Mr. Myers to inform him that his application was assigned to her for review. She asked him to provide the following on or before October 20: (1) information about the nature of his employment or business activities from November 14, 2013 to October 1, 2015; (2) proof of current errors and omissions insurance coverage; and (3) proof that he had completed the required 30 hours of continuing education for his 2011-2013 licensing period.

e. On October 21, 2015, Ms. Bhiekham sent a follow-up email to Mr. Myers. In the electronic message, she indicates that her previous request for information had not been complied with. Accordingly, she makes a second request for the information noted in the previous subparagraph. Ms. Bhiekham gives Mr. Myers until November 4, 2015, to comply with her request and adds the following warning: “Failure to respond to my request for information may result in disciplinary action.” [Emphasis in original]

f. On November 5, 2015, Ms. Bhiekham sent another follow-up email to Mr. Myers. This electronic message has the subject line “FINAL REQUEST: RESPONSE REQUIRED”. In the body of the email, Ms. Bhiekham indicates that her previous two requests for information had not been complied with. Accordingly, she makes a third request for the information noted in subparagraph 8(d) of our Reasons. Ms. Bhiekham gives Mr. Myers until November 20, 2015, to comply with her “final request” and adds the following warning: “Failure to respond to my request for information may result in … a Notice of Proposal to deny or revoke your licence.” [Emphasis in original]

g. On November 25, 2015, Ms. Bhiekham sent a registered letter to Mr. Myers. This letter was successfully delivered to the address provided by the Applicant on his licence application. The person who signed for the letter is “DENROY MYERS”. In the letter, Ms. Bhiekham puts the Applicant on notice that he has failed to comply with her previous three requests for information. He is warned that “a Notice of Proposal for a Financial Services Tribunal Hearing to Refuse your licence may be issued” [emphasis in original], unless he responds to Ms. Bhiekham by December 16, 2015.

h. Mr. Myers has not responded to any of the four requests for information made by FSCO. In his Request for Hearing, Mr. Myers claims that he did not receive the letter signed by “DENROY MYERS” and says that he was “very busy with work” during the relevant timeframe and “thought that my colleague was going to send the documents to FSCO”. However, since he did not appear for his hearing and did not testify to any of these matters, we give no weight to these assertions; they are part of the record, but they are not part of the evidence upon which our decision is based.

IV. analysis

9This case involves an application for renewal of a life insurance agent licence. Thus, the starting point of our analysis is section 7 of Ontario Regulation 347/04 (the “Agents Regulation”). Subsection 7(3) provides that the Superintendent “may require” an applicant for renewal of a licence to file various documents in order to process his or her application, including the following categories of information: (1) statements certifying which continuing education courses have been completed by the applicant (clause c); (2) a statement certifying that the applicant has the required errors and omissions insurance (clause d); and (3) “such other information as the Superintendent may require” (clause e).

10We find that the emails sent to Mr. Myers on October 6, October 21, and November 5, 2015, amount to a request for information within the meaning of subsection 7(3) of the Agents Regulation, and that Mr. Myers failed to comply with this request. In particular, we find that the information requested from the Applicant fell within the discretionary powers conferred upon the Superintendent and his delegates by clauses 7(3)(c) (continuing education), 7(3)(d) (errors and omissions insurance) and 7(3)(e) (employment history) of this regulation. We make similar findings with respect to the registered letter successfully delivered to the address provided by Mr. Myers on his licence application; this letter is a request for information within the meaning of subsection 7(3) and Mr. Myers failed to comply with this request. Accordingly, with respect to the first issue specified in the Notice of Hearing, we conclude that the Applicant failed to comply with clauses 7(3)(c), 7(3)(d) and 7(3)(e) of the Agents Regulation. Furthermore, we find that Mr. Myers contravened the statutory duty imposed upon him by subsection 392.4(7) of the Insurance Act, R.S.O. 1990, c. I.8. This provision states that “[a]n agent who wishes to apply for renewal of his, her or its licence … shall give the Superintendent such information, evidence and material as he or she may require…”.

11Having reached these conclusions, we turn to subsection 7(4) of the Agents Regulation. According to this provision, an application for renewal may be refused “on any grounds on which the Superintendent is authorized to suspend or revoke the licence”. This begs the question, on what grounds may the Superintendent suspend or revoke a life insurance agent licence? Section 8 states that this may occur for a number of reasons, including, for present purposes, “any grounds on which an application for a licence may be refused”. Therefore, we must now focus our attention on section 4 of the Agents Regulation, which provides the various qualifications that one must possess in order to be entitled to a licence. According to clause 4(1)(i), a licence shall be issued “if the Superintendent is satisfied” that the applicant “is otherwise a suitable person to receive a licence”.

12Does the failure of Mr. Myers to comply with the Superintendent’s request for information afford reasonable grounds for the belief that he is not a suitable person to receive a licence within the meaning of clause 4(1)(i) of the Agents Regulation?

13The Superintendent has the legal responsibility to enforce the Insurance Act and its regulations in order to protect the public and enhance public confidence in the insurance industry: Financial Services Commission of Ontario Act, 1997, S.O. 1997, c. 28, s. 3(a). In particular, the requirement that every insurance agent operating in Ontario must have a licence allows the Superintendent to perform a gate-keeping function in the public interest. As stated elsewhere, this requirement “ensures that only certain individuals, partnerships and corporations are allowed to sell or solicit insurance products as agents; those applicants that meet the licensing requirements established by the Act and Regulation”: Gardner v. Ontario (Superintendent Financial Services), 2011 ONFST 6 at p. 8. Returning to the present case, how can the Superintendent make a determination of suitability with respect to Mr. Myers, and thereby fulfill his duty to the people of Ontario, without complete information pertaining to the Applicant’s continuing education credits, errors and omissions insurance, and employment history, three subjects of inquiry that are highly relevant when it comes to assessing someone’s suitability to conduct business as a life insurance agent?

14Given Mr. Myers’ continued failure to provide the information that the Superintendent was entitled to request and that was necessary to properly assess the merits of his renewal application, it would be unreasonable for the Superintendent to come to any other conclusion than the one reached in this case, namely, that he is not satisfied that Mr. Myers is a suitable person to receive a licence. Therefore, we answer the second question with a resounding “yes”.

V. order

15The Tribunal orders the Superintendent to refuse to issue an insurance agent licence to the Applicant, Hugh Ashley Myers.

Dated at Toronto, this 7th day of November, 2016.

“Denis Boivin” Denis Boivin

“Jeffrey Richardson” Jeffrey Richardson

“Patrick Longhurst” Patrick Longhurst