Enforcement order

IN THE MATTER OF the Insurance Act, R.S.O. 1990, c.I.8, as amended (the “Act”), in particular sections 392.4, 407.1, 441.2 and 441.3;

AND IN THE MATTER OF Noella Caspersz.

NOTICE OF PROPOSAL TO REFUSE TO RENEW LICENCE AND TO IMPOSE AN ADMINISTRATIVE PENALTY

TO: Noella Caspersz

TAKE NOTICE THAT pursuant to sections 392.4 and 407.1 of the Act, and by delegated authority from the Chief Executive Officer of the Financial Services Regulatory Authority of Ontario (the “Chief Executive Officer”), the Director, Litigation and Enforcement, (the “Director”) is proposing to refuse to renew the life insurance and accident and sickness insurance agent licence issued to Noella Caspersz (“Caspersz”).

TAKE NOTICE THAT pursuant to section 441.3 of the Act, and by delegated authority from the Chief Executive Officer, the Director is proposing to impose an administrative penalty in the amount of $50,000 on Caspersz for failing to answer inquiries by the Chief Executive Officer promptly, explicitly, and completely, and failing to answer in the manner and period specified, contrary to sections 442.1(5) and 442.3(3) of the Act.

Details of these contraventions and reasons for this proposal are described below. This Notice of Proposal includes allegations that may be considered at a hearing.

SI VOUS DÉSIREZ RECEVOIR CET AVIS EN FRANÇAIS, veuillez nous envoyer votre demande par courriel immédiatement à: contactcentre@fsrao.ca.

YOU ARE ENTITLED TO A HEARING BY THE FINANCIAL SERVICES TRIBUNAL (THE “TRIBUNAL”) PURSUANT TO SECTIONS 407.1(2), 407.1(3), 441.3(2) AND 441.3(5) OF THE ACT. A hearing by the Tribunal about this Notice of Proposal may be requested by completing the enclosed Request for Hearing Form (Form 1) and delivering it to the Tribunal within fifteen (15) days after this Notice of Proposal is received by you. The Request for Hearing Form (Form 1) must be mailed, delivered, faxed or emailed to:

Address:
Financial Services Tribunal
25 Sheppard Avenue W, Suite 100
Toronto, ON M2N 6S6

Attention: Registrar

Fax: 416-226-7750

Email: contact@fstontario.ca

For additional copies of the Request for Hearing Form (Form 1), visit the Tribunal’s website at www.fstontario.ca

TAKE NOTICE THAT if you do not deliver a written request for a hearing to the Tribunal within fifteen (15) days after this Notice of Proposal is received by you, orders will be issued as described in this Notice of Proposal. TAKE FURTHER NOTICE of the payment requirements in section 5 of Ontario Regulation 408/12, which state that the penalized person or entity shall pay the penalty no later than thirty (30) days after the person or entity is given notice of the order imposing the penalty, after the matter is finally determined if a hearing is requested, or such longer time as may be specified in the order.

The hearing before the Tribunal will proceed in accordance with the Rules of Practice and Procedure for Proceedings before the Financial Services Tribunal (“Rules”) made under the authority of the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22, as amended. The Rules are available at the website of the Tribunal: www.fstontario.ca. Alternatively, a copy can be obtained by telephoning the Registrar of the Tribunal at 416-590-7294, or toll free at 1-800- 668-0128 extension 7294.

At a hearing, your character, conduct and/or competence may be in issue. You may be furnished with further and/or other particulars, including further or other grounds, to support this proposal.

REASONS FOR PROPOSAL

I. INTRODUCTION

These are the reasons of the Director to refuse to renew Caspersz’s life insurance and accident and sickness insurance agent licence and to impose an administrative penalty on Caspersz.

Caspersz repeatedly failed to answer two inquiries made pursuant to sections 442.1(1) and 442.3(1) of the Act regarding allegations of churning, fronting, and product-client suitability, contrary to sections 442.1(5) and 442.3(3) of the Act.

Licensed agents are obliged to answer regulatory inquiries promptly, explicitly, and completely, and to answer in the manner and period specified. An agent who fails to cooperate with an investigation and fails to answer an inquiry hinders FSRA’s ability to investigate potential non-compliance and to protect the public. In these circumstances, it is appropriate to refuse to renew the agent’s licence and impose an administrative penalty.

II. BACKGROUND

Caspersz was a licensed life insurance and accident & sickness insurance agent (licence # 94027106) under the Act. Caspersz was first licensed in 1983. Her licence expired on August 4, 2023.

Caspersz applied to renew her licence on July 14, 2023, before her licence expired.

DT was a licensed life insurance and accident & sickness insurance agent under the Act. DT’s licence expired on February 7, 2019. DT has been the subject of two Notices of Proposals, dated January 25, 2023, and April 24, 2023.

The Notice of Proposal, dated January 25, 2023, arises from allegations that YJ, formerly a licensed life insurance and accident & sickness insurance agent, assisted DT in conducting unlicensed insurance activity and shared commissions with him in exchange for DT providing clients. DT has sought a hearing before the Financial Services Tribunal, which is ongoing. YJ did not request a hearing and his licence was revoked and administrative penalties were imposed.

Caspersz was contracted with Canada Loyal Financial, a Managing General Agency (“MGA”), until August 2022. In August 2022, she switched to Financial Horizon Inc., another MGA.”

Caspersz was previously contracted to sell with Canada Life Assurance Company (“Canada Life”). Canada Life terminated their contract with Caspersz on February 16, 2023.

III. FACTS

A. Previous Compliance History

In January 2009, Caspersz’s licence was suspended for a period of 30 days by the Financial Services Commission of Ontario (“FSCO”). FSCO is the predecessor organization of FSRA.

The suspension was pursuant to a Minutes of Settlement (“MOS”) entered into on November 2008 between Caspersz and FSCO. In the MOS, Caspersz admitted that, between 2001 and 2004, another agent wrote at least 10 insurance applications and, without advising the clients, named Caspersz as the servicing agent. Caspersz signed the applications purporting to be the servicing agent.

According to the MOS, the agent writing the applications was a member of Caspersz’s family and was licensed at the time of the conduct.

B. Caspersz’s Relationship with DT

Contractor JH

JH is a contractor who worked for DT from 2006 to 2022. In a February 2023 interview, he identified several agents who he believed worked with DT, including Caspersz. However, JH had never met Caspersz in-person.

JH explained that DT would advise insurance clients while an agent like Caspersz would sign paperwork and serve as the Agent-of-Record (“AOR”). According to JH, the clients were frequently switched between insurance policies and AORs.

In the interview, JH provided documents appearing to reflect e-Transfers totalling $7,884 from Caspersz to DT. The transfers occurred between January 21, 2022 and April 23, 2022. However, JH believed that the relationship between Caspersz and DT continued past that time.

Canada Life Clients from YJ

On February 24, 2023, Canada Life submitted a letter and a Life Agent Reporting Form (“LARF”) to FSRA. Canada Life indicated that they had found a “business relationship” between DT and Caspersz.

FSRA’s Investigator (the “Investigator”) asked Canada Life to determine whether any of Caspersz’s clients were former clients of DT or any of DT’s known associates.

In March 2023, Canada Life confirmed that six of Caspersz’s clients were former clients of YJ and held a total of ten policies. Nine policies were sold by Caspersz and the tenth was sold by YJ and serviced by Caspersz.

C. Caspersz Fails to Answer FSRA Inquiries

First Inquiry Letter

As a result of the information provided by JH, FSRA decided to investigate Caspersz and others for churning, fronting and product-client suitability.

On February 17, 2023, the Investigator sent an inquiry letter to Caspersz under sections 442.1 and 442.3 of the Act (the “First Inquiry Letter”). The First Inquiry Letter required that Caspersz provide certain information by March 3, 2023. The First Inquiry Letter also required Caspersz to contact the Investigator before February 24, 2023 to arrange an interview.

Specifically, Caspersz was required to provide the source of her leads, a list of clients referred from DT, notes from client meetings, and the details of any compensation sharing arrangements she had with other individuals or entities. The information was requested for the time period of January 2022 to January 2023.

The Investigator was designated by the Chief Executive Officer to direct inquiries under the Act, and this designation was stated in the First Inquiry Letter.

The First Inquiry Letter made specific reference to section 442.1(5) of the Act and explained that Caspersz was required to respond to an inquiry promptly, explicitly, completely and in the manner and within the period specified in the letter.

On February 23, 2023, Caspersz replied to the email attaching the First Inquiry Letter. Caspersz noted that she was on vacation and had limited access to the internet. She said she would need access to her files, which were at home.

On March 24, 2023, the Investigator sent Caspersz a reminder email, indicating that they still had not received the requested information. Caspersz did not reply to this email.

Second Inquiry Letter

On May 9, 2023, the Investigator sent a second inquiry letter to Caspersz (the “Second Inquiry Letter”). The Second Inquiry Letter reiterated that the information requested in the First Inquiry Letter must be provided and set a new date of May 16, 2023 for Caspersz to contact the Investigator to set an interview date (the First and Second Inquiry Letter are referred to collectively as, the “Inquiries”).

On May 15, 2023, Caspersz replied to the Investigator’s email and suggested May 23, 2023, at 10:30 a.m. for the interview. The Investigator confirmed the date and time suggested.

On May 22, 2023, Caspersz emailed the Investigator, stating she was experiencing health issues. She proposed scheduling the interview for the following week. The Investigator rescheduled the interview to May 30, 2023, at 10:00 a.m.

On May 29, 2023, the Investigator emailed Caspersz to confirm her attendance at the interview the next day. Caspersz did not attend the interview or notify the Investigator in advance that she was unable to do so. On May 30, 2023, at 4:16pm, after the interview was scheduled to occur, Caspersz indicated that she was still experiencing health issues.

On June 2, 2023, the Investigator emailed Caspersz, indicating that the interview had been rescheduled for a third time, now to June 6, 2023, at 10:00 a.m.

Caspersz failed to attend the interview on June 6, 2023, without providing notice or a reason for her failure to do so.

Caspersz next communicated with the Investigator on June 13, 2023, when she indicated that she was seeking a lawyer.

On June 13, 2023, the Investigator emailed Caspersz with a fourth date for the interview, now June 27, 2023, to allow time for her to secure legal representation. The Investigator stated that Caspersz needed to attend on June 27, 2023, with or without legal representation.

On June 26, 2023, Caspersz emailed the Investigator that she was not attending the interview the following day and would let the Investigator know when she was ready.

The Investigator has still not heard back from Caspersz about scheduling an interview and has not received any of the information required in the Inquiries.

IV. CONTRAVENTIONS OR FAILURES TO COMPLY WITH THE ACT

The Inquiries were validly issued to Caspersz and required information within the scope of sections 442.1(1) and 442.3(1) of the Act. Sections 442.1(5) and 442.3(3) state that a person to whom an inquiry is directed must answer promptly, explicitly and completely, and in the manner and period specified by the Chief Executive Officer or his designate.

Caspersz was required to respond to the Inquiries in two manners: by providing the documents and information required, and by attendance at an interview to provide information verbally. Caspersz was given multiple extensions and opportunities to answer yet failed to do so. To date, Caspersz has not provided any of the information required and has not attended an interview or indicated when she will be able to do so.

The Director is satisfied that Caspersz contravened sections 442.1(5) and 442.3(3) of the Act by failing to answer the Inquiries within the required period, or within any reasonable period, and for failing to attend at the required interview.

V. GROUNDS FOR REFUSING TO RENEW LICENCE

Section 392.4 of the Act states that the Chief Executive Officer shall renew an insurance agent’s licence if the agent has satisfied the prescribed requirements for a licence unless he believes on reasonable grounds that the applicant is not suitable to be licensed, having regard to such circumstances as may be prescribed and other matters the Chief Executive Officer considers appropriate.

The prescribed grounds are set out in sections 4 and 8 of O. Reg. 347/04. The ground listed in section 8(d) of O. Reg. 347/04 is that the licensee has demonstrated incompetence or untrustworthiness to transact the insurance agency business for which the licence has been granted.

In addition, section 392.5(1) of the Act and section 7(4) of O. Reg. 347/04, allow the Chief Executive Officer to refuse to renew an insurance agent’s licence if the agent has failed to comply with the Act, the regulations or a condition of the licence.

The Director has reasonable grounds to believe that Caspersz is not suitable for licensing under the Act. Caspersz has demonstrated incompetence and untrustworthiness to transact business as an insurance agent by failing to cooperate with FSRA’s investigation and answer the Inquiries as required under the Act.

FSRA relies on licensees to provide it with truthful and accurate information in order to regulate the insurance sector and to protect the public. Through her non-cooperation, Caspersz has obstructed FSRA from investigating her potential non-compliance with the Act and the potential non-compliance of others, including DT.

Caspersz’s repeated failure to answer the Inquiries contravenes sections 442.1(5) and 442.3(3) of the Act and demonstrates that she will not act in a competent and trustworthy way when working as an insurance agent.

The Director is satisfied that a sanction less than refusal, such as suspension or licence conditions, would not reflect the severity of Caspersz’s conduct and would not adequately protect the public. Caspersz has already been suspended in the past.

Further, refusal to cooperate with a FSRA investigation is a strong indicator that Caspersz is ungovernable, may not comply with other requirements under the Act, and that lesser sanctions are unlikely to protect the public.

VI. GROUNDS FOR IMPOSING AN ADMINISTRATIVE PENALTY

The Director is satisfied that imposing an administrative penalty under section 441.3(1) of the Act for the contravention of sections 442.1(5) and 442.3(3) described above will satisfy both of the following purposes under section 441.2(1):

To promote compliance with the requirements established under the Act; and

To prevent a person from deriving, directly or indirectly, any economic benefit because of contravening or failing to comply with a requirement established under the Act.

The Director is satisfied that an administrative penalty in the amount of $50,000 should be imposed on Caspersz. This administrative penalty will promote compliance with sections 442.1(5) and 442.3(3). It will also prevent Caspersz from benefiting from the potential avoidance of other sanctions because of her failure to provide the information that may have indicated other contraventions with the Act.

Sections 442.1(5) and 442.3(3) are listed in Schedule 1 of O. Reg. 408/12 and contraventions of the sections carry a maximum penalty of $100,000 for an individual.

In determining the amount of the administrative penalty, the Director has considered the following criteria as required by section 4(2) of O. Reg. 408/12:

The degree to which the contravention or failure was intentional, reckless or negligent;

The extent of the harm or potential harm to others resulting from the contravention or failure;

The extent to which the person or entity tried to mitigate any loss or take other remedial action;

The extent to which the person or entity derived or reasonably might have expected to derive, directly or indirectly, any economic benefit from the contravention or failure; and

Any other contraventions or failures to comply with a requirement established under the Act or with any other financial services legislation of Ontario or of any jurisdiction during the preceding five years by the person or entity.

In respect of the first criterion, the Director is satisfied that Caspersz acted intentionally in failing to reply to the Inquiries. Caspersz was given two inquiry letters along with ample time to provide information. In the nearly six months since the First Inquiry Letter, she has still not provided any information to the Investigator. She also had ample opportunity to attend the requested interview at one of the four interview times that were scheduled, or another time at her request. However, she continuously failed to attend and has not rescheduled her interview since advising on June 26, 2023 that she would do so.

In respect of the second criterion, the Director has considered the serious harm that could result from Caspersz’s conduct. The cooperation of licensees with FSRA’s inquiries is essential for the effective regulation of the insurance sector. By failing to cooperate, Caspersz has obstructed FSRA’s investigation, placing the public at increased risk. In particular, obstructing FSRA’s investigation has also made it more difficult for FSRA to investigate DT, who may be continuing to work with the public despite being unlicensed.

In respect of the third criterion, Caspersz took no steps to mitigate the harm caused by her actions. Even when given multiple chances to reply to the Inquiries, she repeatedly failed to do so.

In respect of the fourth criterion, the Director is satisfied that Caspersz’s conduct may result in avoiding additional sanctions because FSRA’s investigation was obstructed.

In respect of the fifth criterion, the Director is unaware of any contraventions or failures to comply with a requirement established under the Act or with any other financial services legislation in Ontario or of any jurisdiction during the preceding five years by Caspersz. Caspersz’s previous licence suspension from FSCO was in 2009.

DATED at Toronto, Ontario, August 11, 2023.

Original signed by

Elissa Sinha
Director, Litigation and Enforcement

By delegated authority from the Chief Executive Officer

Si vous desirez recevoir cet avis en français, veuillez nous envoyer votre demande par courriel immediatement à : contactcentre@fsrao.ca.