Citation: Beeksma v. Ontario (Superintendent Financial Services), 2016 ONFST 3 Decision No. I0625-2015-2 Date: 2016/02/11

IN THE MATTER OF the Insurance Act, R.S.O. 1990, c. I.8 (the “Act”), in particular sections 441.1, 441.2 and 441.3;

AND IN THE MATTER OF a Notice of Proposal to Impose an Administrative Monetary Penalty dated March 16, 2015 issued by the Executive Director, Licensing and Market Conduct Division by delegated authority from the Superintendent of Financial Services against James Beeksma;

AND IN THE MATTER OF a Hearing in accordance with subsection 441.3(5) of the Act.

and

RESPONDENT

BEFORE:

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

Patrick Longhurst Member of the Panel and Member of the Tribunal

Jeffrey Richardson Member of the Panel and Member of the Tribunal

APPEARANCES:

For the Applicant – Jennifer Kennedy

For the Superintendent of Financial Services – Douglas Lee

DATE HEARD: November 13, 2015

REASONS FOR DECISION

I. INTRODUCTION

1The Applicant in this matter, James Beeksma, is licensed as a life insurance and accident and sickness insurance agent under the Insurance Act, R.S.O. 1990, c. I.8. On March 16, 2015, a delegate of the Superintendent of Financial Services (“Superintendent”) issued a Notice of Proposal (“NOP”) in which he proposes to impose a general administrative monetary penalty (“general AMP”) of $1,800 on Mr. Beeksma. In the NOP, it is alleged that the Applicant failed to maintain errors and omissions (“E&O”) insurance between January 1, 2013 and November 19, 2013, a period of approximately 10-2/3 months during which he was licensed, but not active in the industry.

2The legislative provisions of the Insurance Act that allow the Superintendent to impose general AMPs for breaches of this Act and its regulations came into force January 1^st, 2013. To date, the Tribunal has released seven decisions – excluding the present one – involving life insurance agents who have challenged proposals to impose monetary penalties for contraventions of the E&O requirement. In all seven precedents, without exception, the Tribunal has reached the same conclusion: the NOP has been upheld, without modification, and the agent has been fined in amounts ranging from $1,300 to $1,600. In this case, Mr. Beeksma is asking us to revisit the issue, once again, and reach a different outcome.

3For reasons that follow, we conclude that Mr. Beeksma has contravened the E&O requirement and that a general AMP is appropriate. However, after taking into consideration the relevant criteria and the submissions made by both parties, we are ordering the Superintendent to reduce the proposed penalty to $1,000.

4At first glance, our decision may appear difficult to reconcile with our precedents. But in reality, our decision simply illustrates one of the guiding principles of the Tribunal’s case law with respect to the determination of general AMPs, namely, that each case is unique and must be decided on the basis of its own facts, as established by the evidence adduced during the Hearing.

II. issues

5The Pre-hearing Conference Memorandum and Notice of Hearing that were prepared for this matter identify three issues:

a. First, did Mr. Beeksma lack E&O coverage while licensed to sell life insurance, contrary to section 13 of Ontario Regulation 347/04? If so, how long was the lapse in his coverage?

b. Second, if the answer to issue (a) is yes, is the imposition of a general AMP appropriate, considering subsection 441.2(1) of the Insurance Act? Will it promote compliance with requirements established under the Insurance Act and/or prevent Mr. Beeksma from deriving an economic benefit from his non-compliance?

c. Third, if the answer to issue (b) is yes, what is the appropriate amount for the general AMP, taking into account the five criteria contained in section 4 of Ontario Regulation 408/12?

III. facts

6With some minor exceptions, addressed in the next paragraph, the essential facts in this case are not in dispute. The parties filed, on consent, an Agreed Book of Documents (“ABD”) and an Agreed Statement of Facts (“ASF”), and both documents were received by the Tribunal as proof of the contents therein. Counsel for the Superintendent called one witness, Elena Schneider, a Regulatory Discipline Officer with the Licensing and Market Conduct Division of the Financial Services Commission of Ontario (“FSCO”). For her part, the Applicant’s representative called one witness, Mr. Beeksma himself. Both witnesses provided lengthy testimony and were subject to cross-examination.

7Ms. Schneider swore an Affidavit, which was introduced into evidence during her testimony. This document did not form part of the ABD. Indeed, during the cross-examination of this witness, the representative of Mr. Beeksma objected to many parts of the Affidavit. In particular, she took exception to the fact that paragraphs 38-41 of Ms. Schneider’s Affidavit contained allegations regarding the fifth factor listed in section 4 of Ontario Regulation 408/12, namely, the existence of prior contraventions. This was inappropriate, in her view, because neither the NOP nor the written submissions prepared by counsel for the Superintendent refer to this factor in justifying the amount of the penalty. In these circumstances, the Tribunal agreed with Ms. Kennedy, and decided to strike-out paragraphs 38-41 of the document on the ground that they were irrelevant. This being said, we rejected all other challenges to the admissibility of Ms. Schneider’s Affidavit. In our view, the remaining paragraphs contained information relevant to the subject-matter of this proceeding and the witness was qualified to speak to the issues raised therein.

8Having reviewed and weighed the evidence adduced during the Hearing, the Tribunal makes the following findings of fact:

a. Mr. Beeksma is currently licensed as a life insurance and accident and sickness insurance agent (hereinafter “life insurance agent”) under the Ontario Insurance Act. His licence was first issued on November 20, 2007, and it was most recently renewed on August 27, 2014, for a two-year term.

b. On May 23, 2012, FSCO received a copy of a letter addressed to Mr. Beeksma and sent to him by registered mail. The letter in question is dated May 1, 2012, and it is from Arch Insurance Company (Canada) (“Arch”). This letter acknowledges receipt of Mr. Beeksma’s cancellation request sent on his behalf by Investors Group Inc. regarding his company sponsored E&O coverage. The effective date of cancellation is noted as June 2, 2012. As a result of this letter, Justin Tsang of FSCO placed a flag on Mr. Beeksma’s computerized licensing record. The flag was assigned to “KL” for follow-up.

c. Mr. Beeksma’s life insurance agent licence expired without renewal on November 19, 2013.

d. On July 15, 2014, Mr. Beeksma submitted an online application to renew his licence. As a result, the computerized licensing system used by FSCO generated a message indicating that his application was marked for further review. The file was assigned to Paul Fournier for action. Mr. Fournier is a Licensing and Registration Specialist with FSCO.

e. There are no notes in Mr. Beeksma’s licensing record regarding any FSCO activity between May 23, 2012 and July 15, 2014. In particular, there are no notations that the flag placed on his record on May 23, 2012 had been changed or that anyone had followed-up on the matter during this timeframe, or that his licence had expired on November 19, 2013.

f. On July 16, 2014 at 10:48 A.M., Mr. Fournier sent an email to Mr. Beeksma in regards to his licence renewal application. He identified a number of issues that required clarification in order for Mr. Beeksma’s licence to be issued. In particular, Mr. Fournier requested proof of E&O coverage for the period from June 2, 2012 through November 19, 2013, and asked the Applicant whether he had conducted any new insurance business since November 19, 2013.

g. On July 16, 2014 at 2:21 P.M., Mr. Beeksma telephoned Mr. Fournier and stated that he left the insurance industry in April 2012 and was not aware of any steps he needed to take to terminate his licence after leaving the industry. In the same telephone conversation, Mr. Fournier told Mr. Beeksma that regardless of how much business was transacted, he needed to have E&O coverage to keep his licence active. However, the notes prepared by Mr. Fournier on the day of the telephone call indicate that Mr. Beeksma was also advised that if he “cannot” provide proof of E&O coverage for the period in question, “then he would either [1] be subject to an AMP which could range in the thousands of dollars, or [2] he would have to re-qualify [for his licence] through the LLQP”. (Emphasis added)

h. During his testimony, the Applicant gave the following account of his July 16^th telephone conversation with Mr. Fournier. Assuming he could not provide proof of E&O coverage, he would then have two options: either face a general AMP or requalify for his licence by following the LLQP. In his mind, based on his telephone conversation with Mr. Fournier, the choice between the two options was his to make.

i. On August 7, 2014 at 3:40 P.M., Mr. Beeksma sent an email to Mr. Fournier. He apologized for his delayed response and stated that he was under the impression that his former employer, Investors Group Inc., would have contacted FSCO upon his resignation in April 2012. In addition, Mr. Beeksma writes the following in the email: “I realize that I will need to redue [sic] the LLQP course to reinstate my license.” (Emphasis added)

j. During his testimony, the Applicant said that his email of August 7^th was his way of letting Mr. Fournier know that he had selected the second option provided to him over the telephone, a few weeks earlier.

k. On August 7, 2014 at 4:29 P.M., Mr. Fournier wrote back to the Applicant. In the first paragraph of this email, Mr. Fournier says that he spoke to his Team Lead and it has been decided that Mr. Beeksma will not have to re-write the LLQP, because it has been determined that his application may be treated as a renewal, provided he submit a compliance plan outlining the courses that he will complete in a 90-day period and provide proof of his current E&O coverage. The second paragraph of this email reads as follows:

“As for the Errors and Omissions insurance, a copy of your current E&O certificate will satisfy the requirements to renew the licence. In the meantime, it has been noted that you have not conducted any business since you resigned from Investors Group, which is why you did not hold valid E&O from June 2012 to November 2013. We appreciate that your MGA may have taken on some of the administrative functions with regards to your licence; however, because you were fully-licensed at the time, the onus was ultimately on you to notify our office of your termination. As such, we will still need to submit your file to a Regulatory Discipline Officer once the licence has been renewed, to determine if the circumstances behind your application warrant an Administrative Monetary Penalty.”

l. During his cross-examination, Mr. Beeksma was shown the text reproduced in the previous paragraph. He admitted that he may not have read that part of the message, adding that it was “hidden” in the email.

m. On August 21, 2014, the Applicant sent a copy of his current E&O certificate to Mr. Fournier, along with his 90-day compliance plan. At this point, Mr. Beeksma testified that he assumed everything was in order.

n. On March 16, 2015, a NOP to impose a general AMP in the amount of $1,800 against Mr. Beeksma was issued by a delegate of the Superintendent. In the NOP, it is alleged that Mr. Beeksma failed to maintain E&O insurance between January 1, 2013 and November 19, 2013.

o. On April 7, 2015, Mr. Beeksma filed with the Tribunal a Request for Hearing with respect to the NOP.

p. On June 9, 2015, during the first pre-hearing teleconference in this matter, the Applicant brought a preliminary motion pursuant to Rule 14 of the Rules of Practice and Procedure for Proceedings before the Financial Services Tribunal. In essence, Mr. Beeksma requested an order stating that the Superintendent was barred from proceeding against him regarding the alleged contravention, because the NOP was issued beyond a two-year limitation period found in two separate provisions of the Insurance Act, to wit, sections 449 and 441.3(4).

q. The Appellant’s preliminary motion was heard by the Chair of this panel on August 11, 2015.

r. On August 19, 2015, the Chair of this panel decided that section 449 of the Insurance Act did not apply to this proceeding and that the NOP was not issued beyond the limitation period contained in subsection 441.3(4) of the Insurance Act: Beeksma v. Ontario (Superintendent Financial Services), 2015 ONFST 28 (“Beeksma – Motion”). Accordingly, the Applicant’s motion was denied and the parties were convened to another pre-hearing teleconference, in order to plan for the Hearing.

9These facts are sufficient to dispose of the issues raised by this proceeding. We heard evidence from Ms. Schneider and Mr. Beeksma on other matters as well. To the extent that this evidence is relevant, we will address it below, in the context of our analysis.

IV. analysis

a. Statutory Framework

10The licence that was first issued to Mr. Beeksma on November 20, 2007 falls within the class listed in clause 393(2)(a) of the Insurance Act, R.S.O. 1990, c. I.8. For present purposes, we shall refer to this licence as a “life insurance agent licence”.

11 Ontario Regulation 347/04 imposes a number of obligations on anyone who holds a life insurance agent licence. In particular, according to section 13, the licensee shall maintain E&O coverage of at least $1 million per occurrence in a form approved by the Superintendent, with extended coverage for loss resulting from fraudulent acts, or some other form of financial guarantee in a form approved by the Superintendent in an amount of at least $1 million per occurrence. This requirement is not new; it was introduced more than twenty years ago, by means of Ontario Regulation 760/94.

12Prior to January 1, 2013, the disciplinary measures available to the Superintendent under the Insurance Act were relatively limited. A life insurance agent who failed to comply with the E&O requirement could have his or her licence suspended or revoked, but there were no provisions in the Insurance Act allowing the Superintendent to impose an alternative penalty, such as a general AMP. Sections 441.1 to 441.6 of the Insurance Act were adopted in order to rectify this situation.

13 Section 13 of Ontario Regulation 347/04 is prescribed for the purpose of imposing a general AMP under section 441.3 of the Insurance Act: see Ontario Regulation 408/12, section 2, schedule 2, item 26. Therefore, provided the evidence establishes that Mr. Beeksma has breached the E&O requirement and that a monetary fine would promote one of the two statutory objectives listed in subsection 441.2(1) of the Insurance Act, a general AMP would represent an appropriate disciplinary measure; in such a case, the only remaining issue would be the amount of the penalty.

14The maximum penalty for an individual who fails to comply with the E&O requirement is $50,000: see Ontario Regulation 408/12, subsection 3(2)(b), schedule 2, item 26. Section 4 of this Regulation states that the Superintendent is authorized to determine the amount of the general AMP up to this limit having regard only to the five criteria listed in section 4. These criteria are discussed below, in paragraph 29 of our Reasons.

b. Issue 1: Was there a Contravention?

15The first issue is the following: did Mr. Beeksma lack E&O coverage while licensed to sell life insurance, contrary to section 13 of Ontario Regulation 347/04? If so, how long was the lapse in his coverage?

16The facts outlined in paragraph 8 of our Reasons establish that Mr. Beeksma failed to comply with the E&O requirement for a total period of approximately 17-1/2 months, namely, between June 2, 2012 (the date on which his liability insurance was cancelled) and November 19, 2013 (the date on which his licence expired). To be sure, counsel for the Superintendent is not relying on any portion of Mr. Beeksma’s pre-2013 contravention in order to uphold the NOP issued against him; he is only relying on the 10-2/3 months during which Mr. Beeksma was without E&O coverage after January 1, 2013. Still, there is no denying that Mr. Beeksma was licensed and without liability coverage for practically a year and a half.

17According to his testimony, Mr. Beeksma did not conduct any business as a life insurance agent during the timeframes outlined in the previous paragraph. In fact, Mr. Beeksma testified that he left the life insurance industry in April 2012, in order to pursue another business venture, and did not return to this sector until his licence was renewed on August 27, 2014. As discussed below, this circumstance is relevant in determining the amount of his penalty. However, it has no bearing on whether he contravened section 13 of Ontario Regulation 347/04. The duty to maintain E&O coverage applies to anyone who holds a licence to carry on business as a life insurance agent. Section 13 creates no distinction on the basis of whether a licensee is working or not. There is a good reason for this. As stated by Ms. Schneider, in paragraph 23 of her Affidavit, “there is no practical way for a regulator to know on a day to day basis whether a life insurance agent is doing business”. Thus, the requirement to maintain E&O coverage attaches to the licence itself and not to the activities of the licence holder. As long as a person is licensed to carry on business as a life insurance agent, this person’s failure to maintain E&O coverage is a contravention of section 13.

18During his telephone conversation with Mr. Fournier, in July 2014, the Applicant said that he was not aware of any steps he needed to take in order to terminate his licence after leaving the life insurance industry. A few weeks later, he wrote to Mr. Fournier and told him that he assumed that FSCO had been advised of his departure by his former employer. Likewise, during the Hearing, Mr. Beeksma and his representative pointed-out that FSCO had been notified of the fact that his E&O coverage came to an end in June 2012. They stressed that a flag had been placed on his record for follow-up, but that nobody from FSCO had contacted him until he submitted his renewal application, two years later.

19As discussed below, the evidence outlined in the previous paragraph may be relevant in order to determine whether Mr. Beeksma’s contravention of section 13 was intentional, reckless or negligent – one of the five factors that we must consider in assessing the amount of his penalty. However, this evidence does not excuse or justify his undeniable failure to maintain E&O coverage while licensed. Life insurance agents cannot plead ignorance of the law when faced with allegations that they failed to fulfil their regulatory duties, nor can they delegate their professional responsibilities to others. They have voluntarily chosen to engage in a business that requires a licence and which involves regulation. As a result, agents are presumed to know and accept the high standards that they are expected to meet: see La Souveraine, Compagnie d’assurance générale v. Autorité des marchés financiers, 2013 SCC 63 at para. 49; White v. Ontario (Superintendent Financial Services), 2014 ONFST 9 at para. 22 (“White”); and Sy v. Superintendent of Financial Services, 2014 ONFST 14 at para. 16 (“Sy”).

20The observations made in the previous paragraph are particularly apropos with respect to the E&O requirement; the feature of the regulatory scheme that most clearly and directly safeguards the interests of the public. The purpose of this requirement is to protect the public and enhance its confidence in the life insurance industry. In particular, the E&O requirement ensures that a fund is available to compensate any member of the public who suffers financial loss due to the negligence or fraudulent activity of a life insurance agent: White, supra at para. 22-23; Sy, supra at para. 16. In this context, it is fitting that the standard of liability imposed by section 13 of Ontario Regulation 347/04 is a strict one.

21Consequently, the answer to the first issue is “yes”. Even though he did not conduct any business during the relevant timeframe and did not understand the legal impact of cancelling his liability coverage without taking any of the steps required to surrender his licence, Mr. Beeksma contravened section 13 of Ontario Regulation 347/04. He failed to maintain E&O coverage while licensed to sell life insurance.

c. Issue 2: Is a General AMP Appropriate?

22Having established that Mr. Beeksma breached section 13 of Ontario Regulation 347/04, the next issue is whether the imposition of a general AMP is appropriate, considering subsection 441.2(1) of the Insurance Act. Would a monetary penalty promote compliance with requirements established under the Insurance Act and/or prevent Mr. Beeksma from deriving an economic benefit from his non-compliance?

23Thus far, the Tribunal has released seven decisions that involve comparable allegations as the ones made against Mr. Beeksma – that is, seven cases in which life insurance agents have challenged proposals to impose monetary penalties for contraventions of the E&O requirement. In each case, without exception, the Tribunal has concluded that the imposition of a general AMP on a licensee who fails to comply with the E&O requirement meets both statutory objectives listed in subsection 441.2(1) of the Insurance Act: see White, supra at paras. 24-25; Sy, supra at para. 19; Iqbal v. Ontario (Superintendent Financial Services), 2015 ONFST 6 at para. 15 (“Iqbal”); Barot v. Ontario (Superintendent Financial Services), 2015 ONFST 14 at para. 23 (“Barot”); Lin v. Ontario (Superintendent Financial Services), 2015 ONFST 17 at para. 15 (“Lin”); Anyanwu v. Ontario (Superintendent Financial Services), 2015 ONFST 24 at para. 18 (“Anyanwu”); and Hashim v. Ontario (Superintendent Financial Services), 2015 ONFST 40 at para. 21 (“Hashim”).

24In light of these precedents, once it is established that a licensee has contravened the E&O requirement, this person faces a difficult challenge: to convince the Tribunal that a general AMP is not an appropriate sanction. There may be special circumstances in which it would be inappropriate to impose a monetary penalty on a life insurance agent who has failed to maintain liability insurance: White, supra at para. 26; Sy, supra at para. 18. However, we would expect those circumstances to be rare, and there is nothing in the evidence adduced during the Hearing that persuades us that this is an exceptional case. Simply put, an agent to whom section 13 applies must either comply with the E&O requirement or reach an agreement with the Superintendent in order to surrender his or her licence. Both of these options were available to Mr. Beeksma throughout the relevant timeframe, and there is no evidence to suggest that he was incapable of taking advantage of them. As mentioned in paragraph 18, his lack of knowledge is not a valid excuse. At the very least, he should have contacted FSCO when he decided to leave the insurance industry and asked them about his options.

25During the Hearing, the Applicant and his representative gave two reasons why a monetary penalty would be inappropriate in this case: (1) FSCO did not follow-up on the flag that was placed on Mr. Beeksma’s record until he applied to have his licence renewed, more than two years later and (2) during his exchanges with Mr. Fournier, the Applicant was led to believe that he would not face a monetary penalty if he chose to requalify for his licence by following the LLQP. For reasons that follow, we reject both arguments for the purpose of determining whether a general AMP is appropriate.

26First, with respect to the flag placed on Mr. Beeksma’s computerized licensing record on May 23, 2012, we agree that it is unfortunate that nobody within FSCO followed up on the issue. However, the question before us is not whether the regulator should have acted differently; the question is whether a fine would promote compliance or prevent Mr. Beeksma from deriving a benefit from his contravention. As held in the context of the Applicant’s preliminary motion, the two-year limitation period prescribed by subsection 441.3(4) of the Insurance Act did not start until the Superintendent became aware of the Applicant’s “contravention or failure to comply” and the possession of a cancellation notice, by itself, did not amount to the required degree of knowledge: Beeksma – Motion, supra at para. 15. To be sure, the flag indicates that the regulator knew that Mr. Beeksma’s coverage with Arch was about to expire and that a potential contravention of section 13 could ensue. But this flag does not preclude the Superintendent or his delegate from taking disciplinary action against Mr. Beeksma once he has a complete picture of the situation.

27Second, with respect to Mr. Beeksma’s telephone conversation and email exchanges with Mr. Fournier, during the summer of 2014, there is nothing in this evidence that supports the inference that the Superintendent waived his statutory powers to enforce the requirements of the Insurance Act and its regulations. Likewise, the doctrine of estoppel does not apply in the circumstances of this case. Indeed, given the fact that Mr. Beeksma’s contravention of section 13 was not ongoing in July and August 2014, it cannot be said that he relied on any representation by FSCO to his detriment. In other words, his failure to maintain E&O coverage had already occurred, when the two men spoke and exchanged emails.

28Accordingly, in keeping with the precedents listed in paragraph 23 of our Reasons, we reach the following three conclusions with respect to the appropriateness of a general AMP: (1) a monetary penalty would promote Mr. Beeksma’s voluntary compliance with the regulatory regime, (2) it would reaffirm the message that our case-law has consistently sent to the life insurance industry with respect to the significance of the E&O requirement and (3) it would prevent Mr. Beeksma from benefiting from the fact that he did not maintain E&O coverage between January 1, 2013 and November 19, 2013, even though he was required to do so. As a result, the answer to issue two is “yes”.

c. Issue 3: What is the Appropriate Amount of the Penalty?

29In determining the amount of Mr. Beeksma’s monetary penalty, the Tribunal must take into account only the five criteria listed in section 4(2) of Ontario Regulation 408/12. Each case is unique and must be decided on its own facts, as established by the evidence adduced during the Hearing. Having reviewed this evidence, the Tribunal makes the following findings with respect to the application of these criteria to the circumstances of this case:

a. To what degree was Mr. Beeksma’s contravention intentional, reckless or negligent? Without question, the Applicant knew about the E&O requirement. His licence was first issued on November 20, 2007 and he complied with section 13 of Ontario Regulation 347/04 for more than four years, until June 2, 2012. However, during the Hearing, he testified that because he left the life insurance industry in order to pursue another business venture in the spring of 2012, he believed that he was relieved from his obligation to maintain liability insurance and was not aware that formal steps were required in order to surrender his licence. We find that Mr. Beeksma was a credible witness. Furthermore, counsel for the Superintendent did not present any evidence to contradict his testimony. On the contrary, the testimony of Mr. Beeksma is supported by two key facts: he knew FSCO had received a copy of the notice of cancellation sent by his insurer and, notwithstanding this fact, he did not receive any request for information from FSCO for more than two years, until he returned to the life insurance industry and applied for a renewal of his licence. In these circumstances, the evidence presented by the Superintendent in order to meet his burden of proof does not support a finding that Mr. Beeksma’s contravention was either intentional or reckless. On the contrary, viewed in the worst possible light, the facts simply establish negligence on his part.

b. To what extent did Mr. Beeksma’s contravention cause harm or potential harm to others? There is no evidence that Mr. Beeksma carried on any business as a life insurance agent between January 1, 2013 and November 19, 2013. As argued by counsel for the Superintendent, potential harm to the public existed since the Applicant remained licensed and neither FSCO nor the Superintendent had any practical way of supervising his day-to-day activities. However, given the fact that Mr. Beeksma completely withdrew himself from the life insurance industry during the relevant timeframe, the extent of this potential harm was minimal.

c. To what extent did Mr. Beeksma try to mitigate any loss or take other remedial action? There is no evidence that the Applicant took any remedial measures to bring himself within compliance of the E&O requirement between January 1, 2013 and November 19, 2013. The reason for this is simple: he was under the impression that he had complied with all the requirements of his licence. Although he was mistaken in this respect, his belief was reasonable in light of FSCO’s failure to follow-up on the cancellation notice that they had received, to his knowledge. Furthermore, once Mr. Fournier contacted him, more than two years later, Mr. Beeksma fully cooperated with FSCO.

d. To what extent did Mr. Beeksma derive or reasonably might have expected to derive, directly or indirectly, any economic benefit from his contravention? The Applicant obtained a modest economic benefit by virtue of retaining a licence to carry on business as a life insurance agent, while avoiding payment of E&O premiums for 10-2/3 months. We reach this conclusion on the basis of the Affidavit sworn by Ms. Schneider. In this document, she states the she has reviewed a random sample of E&O certificates from life insurance agents and deposes that the yearly premiums for the amount of coverage required by section 13 of Ontario Regulation 347/04 range from $500 to $840. Attached to her Affidavit are six redacted copies of E&O certificates. For the purposes of this Hearing, it is not necessary for us to quantify the exact benefit derived by Mr. Beeksma during the relevant timeframe. We simply observe that this benefit was not greater than $750, given the evidence before us.

e. Has Mr. Beeksma committed any other contraventions during the previous five years? This criterion has no application in this case. In the NOP, there is no suggestion that Mr. Beeksma has, in the past, failed to comply with any other requirement under the Insurance Act or with any other financial services legislation of Ontario or of any other jurisdiction.

30Based on these findings, we conclude that a general AMP in the amount of $1,000 would be proportional to all relevant circumstances and so substitute our decision for the penalty proposed by the Superintendent’s delegate. In our view, this amount is substantial enough to promote compliance with the Insurance Act and prevent the Applicant from deriving a benefit from his contravention, while also recognizing the specific findings that have been made in paragraph 29 of our Reasons.

V. ORDER

31The Tribunal orders the Superintendent to impose an administrative monetary penalty in the amount of $1,000 as against the Applicant, Mr. Beeksma.

Dated at Toronto, this 11^th day of February, 2016.

“Denis Boivin” Denis Boivin

“Patrick Longhurst” Patrick Longhurst

“Jeffrey Richardson” Jeffrey Richardson