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

AND IN THE MATTER OF Jensen Ocampo;

NOTICE OF PROPOSAL TO IMPOSE ADMINISTRATIVE PENALTIES

TO: Jensen Ocampo

TAKE NOTICE THAT pursuant to section 441.3 of the Act, and by delegated authority from the Chief Executive Officer of the Financial Services Regulatory Authority of Ontario (“Chief Executive Officer”), the Director, Litigation and Enforcement (“Director”) is proposing to impose an administrative penalty of $25,000 on Jensen Ocampo (“Ocampo”), for repeatedly contravening section 2(2) of Ontario Regulation 7/00 (in force at the time) by paying a rebate of all or part of the premium stipulated by a policy to a person insured or applying for insurance in respect of life, person or property in Ontario, or offering or agreeing to do so.

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 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, 7^th floor
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

1. These are the reasons of the Director to impose an administrative penalty of $25,000 on Ocampo.

II. BACKGROUND

2. Ocampo was a licenced life insurance and accident and sickness insurance agent under the Act (licence # 00063173) until his licence expired on March 14, 2024. Ocampo is currently unlicensed.
3. Eternity Memorial Services (“Eternity”) is a federally incorporated entity. Ocampo has been a director since the company’s inception in 2016. It is not clear what business Eternity conducts.
4. Ocampo was contracted with and authorized to sell insurance policies for the Grand Orange Lodge of British America operating as the Orange Benefit Fund (“OBF”), a fraternal society licensed under the Act.

III. FACTS

A. Orange Benefit Fund Complaint to FSRA

5. On December 6, 2022, OBF submitted a Life Agent Reporting Form (“LARF”) to FSRA regarding Ocampo.
6. In the LARF OBF reported that it had received a complaint from a customer alleging that Ocampo had stopped paying her “dividends” which were meant to offset the cost of insurance she purchased from OBF through Ocampo. OBF conducted a review of Ocampo’s business practices based on the complaint. As a result of the complaint, OBF terminated Ocampo on December 5, 2022, for alleged improper market conduct acts.

B. FSRA Review

7. As a result of the LARF, FSRA’s Market Conduct staff contacted Ocampo and Ocampo’s clients regarding certain OBF policies sold to these clients.
8. Ocampo sold OBF policies to 27 individuals from December 2020 to September 2021 (collectively, the “Policies”). When selling the Policies, Ocampo informed his clients that he would provide them with the funds for the policy premiums for a period of 2 years.
9. Ocampo paid his clients’ premiums for the Policies by issuing them share certificates of Eternity at no cost and then paying “dividends” in an amount equal to the monthly premium owed by the client to OBF.
10. Ocampo also provided a list of “shareholders” for Eternity. In this list, everyone had the same number of shares, 500. However, shareholders were paid a different monthly “dividend” corresponding to the monthly premium amount in the OBF list.
11. Based on the information provided by Ocampo, he offered to or agreed to pay his 27 clients for the Policies $138,336 in total. Ocampo was unable to provide complete information about the amounts he actually paid.
12. In total, Ocampo earned $91,048.41 in commissions for the 27 Policies. OBF has sought to recover $40,091.79 in chargebacks from Ocampo.

IV. CONTRAVENTIONS OR FAILURES TO COMPLY WITH THE ACT

Premium Rebating

13. Section 439 of the Act states that no person shall engage in an unfair or deceptive act or practice. Section 438 of the Act defines unfair or deceptive act or practice as any activity or failure to act that is prescribed by the Authority rules as an unfair or deceptive act or practice.
14. Paragraph 2 of Section 2(1) of Ontario Regulation 7/00 (in force at the time) states that it is an unfair or deceptive act or practice for an insurance agent to pay, allow or give, directly or indirectly, a rebate of all or part of the premium stipulated by a policy to a person insured or applying for insurance in respect of life, person or property in Ontario, or offer or agree to do so.
15. Based on the information received by FSRA from OBF and Ocampo, the Director is satisfied that Ocampo provided premium rebates to 27 insureds, concealed as dividend payments from Eternity in respect of the life insurance Policies he sold. Ocampo agreed to rebate premium for a period of two years but failed to do so for some of the insureds.

V. GROUNDS FOR IMPOSING ADMINISTRATIVE PENALTIES

16. The Director is satisfied that imposing an administrative penalty under section 441.3(1) of the Act for the contravention of section 439 as described above will satisfy both of the following purposes under section 441.2(1):
    1. To promote compliance with the requirements established under the Act; and
    2. 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.
17. The Director is satisfied that an administrative penalty of $25,000 should be imposed on Ocampo. This administrative penalty will promote compliance with the Act and will help prevent Ocampo from retaining any economic benefit he received from his contravention.
18. Paragraph 2 of Section 2(1) of Ontario Regulation 7/00 was listed in Schedule 1 of Ontario Regulation 408/12 and a contravention of this section carried a maximum penalty of $100,000 for an individual.
19. In determining the amount of the administrative penalty, the Director has considered the following criteria as required by section 4(2) of Ontario Regulation 408/12:
    1. The degree to which the contravention or failure was intentional, reckless or negligent;
    2. The extent of the harm or potential harm to others resulting from the contravention or failure;
    3. The extent to which the person or entity tried to mitigate any loss or take other remedial action;
    4. 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
    5. 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.
20. In respect of the first criterion, the Director is satisfied that Ocampo’s conduct was intentional. Ocampo personally issued the share certificates from Eternity and personally made the electronic fund transfers to his clients. Ocampo, as a licensed insurance agent for over 20 years, knew or ought to have known of the prohibition on rebating premiums.
21. In respect of the second criterion, the Director has considered the potential harm that could result from Ocampo’s conduct. There is significant harm to Ocampo’s clients, who signed up for insurance that they may have been unable to afford and resulted in policy lapses. This could affect these clients’ ability to obtain life insurance policies from OBF or other insurers in the future.
22. Further, Ocampo’s misconduct has the potential to harm public confidence in the regulatory regime established by the Act and its regulations.
23. In respect of the third criterion, the Director is not aware of any steps taken by Ocampo to mitigate any loss caused by the contravention or taken any other remedial action.
24. In respect of the fourth criterion, the Director is satisfied that Ocampo gained a direct economic benefit of retaining the upfront commission payments for the policies. Ocampo was unable to confirm exactly how much of the commission he retained.
25. 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 Ocampo.
26. Such further and other reasons as may come to my attention.

DATED at Toronto, Ontario, July 19, 2024.

Original signed by

Elissa Sinha
Director, Litigation and Enforcement

By delegated authority from the Chief Executive Officer

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