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 Specialty Life Inc.

NOTICE OF PROPOSAL TO IMPOSE ADMINISTRATIVE PENALTIES

TO:
Specialty Life Inc.
800 Jane Street, Tower A, Suite 101
Concord, ON L4K 5B8

Attention: Board of Directors and/or Office of the President

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 impose four administrative penalties in the total amount of $800,000, on Specialty Life Inc. for making false or misleading statements or representations in the solicitation or registration of insurance contrary to section 17(c) of Ontario Regulation 347/04 and section 8 of Authority Rule 2020-002 (Unfair or Deceptive Acts or Practices) (the “UDAP Rule”).

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, Suite 100
Toronto, Ontario
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. Between 2019 and 2023 Specialty Life Inc., operating as Specialty Life Insurance (“SLI”) registered 6,500 life insurance policy applications submitted by subcontracted and independent managing general agents and independent insurance agents with insurers (“Applications”) that SLI later discovered to have been fraudulent.
2. These are the reasons of the Director to impose four administrative penalties in the total amount of $800,000 on SLI.

II. BACKGROUND

3. SLI is licensed as a corporate life insurance agent (licence # 35751M). SLI was first licensed on March 24, 2016.
4. SLI operated as a third-party administrator in the sale, administration of underwriting, and distribution of life insurance products for licensed life insurers. SLI employed life insurance agents and sub-contracted with other Managing General Agents (“MGA”) and independent life insurance agents.
5. SLI registered insurance policies with the insurers named in the Applications. SLI provided access to the data from each policy to each of the insurers with whom the policy was registered. SLI was responsible for administering the underwriting of the Applications, including premium collection and disbursement, and commission and bonus payments.
6. As part of its business model, SLI maintained a VIP program with selected MGAs and agents. Members of the VIP program received preferential commissions and bonus payments and greater autonomy in how they operated their business. These VIP program members included Daumier Financial Services Inc. o/a Daumier Financial Services Ltd. (“Daumier Financial”) and Global Insurance Solutions (“GIS”), both of which were MGAs. Additionally, Alessandra Giannini (“Giannini”) and Inparanee Kanagasabey (“Kanagasabey”) were members of the VIP program, working under GIS.
7. SLI paid commissions and bonuses of up to 200% of a policy’s premium within 24 hours of receiving a policy application.
8. The principals of SLI began operations as a company that sold insurance leads to corporate and individual agents. Senior leadership in SLI were friends and family of the founders of the original company. They did not have a background in insurance operations in Ontario. As the company evolved, it did not put in place adequate systems to sufficiently protect against fraudulent activity.
9. Daumier Financial and Giannini and Kanagasabey submitted more than 6,500 Applications for policy holders who did not exist or had not applied for insurance. SLI registered these policies to insurance companies without having adequate systems in place to sufficiently verify the information in all Applications.

III. FACTS

A. Fraudulent Life Insurance Applications

10. Between 2019 and 2023, Daumier Financial agents, as well as Giannini and Kanagasabey submitted the Applications to SLI containing false information. A substantial majority of these Applications were submitted after April 1, 2022 when the unfair or deceptive acts or practices (“UDAP”) Rule came into force. In a substantial majority of the Applications, the named insured either did not exist or had not applied for insurance.
11. In May 2023, FSRA received information regarding a similar fraudulent scheme conducted by Daumier Financial against another life insurance company that was not affiliated with SLI.
12. While investigating the insurer’s complaint, FSRA contacted SLI regarding any policies written by agents of Daumier Financial. This prompted SLI to review the substantial volume of Applications.
13. SLI concluded that Daumier Financial and Giannini and Kanagasabey submitted applications for individuals who did not exist or had not applied for insurance. SLI confronted Giannini, who admitted to the fraudulent scheme. SLI took legal action against Daumier Financial and Giannini and Kanagasabey.
14. SLI paid out significant amounts in commissions and bonuses on the Applications. A portion of funds were returned to SLI by Daumier Financial or Giannini and Kanagasabey in the form of premiums on the fraudulent policies in order for the agents associated with Daumier Financial and Giannini and Kanagasabey to maintain the scheme.
15. SLI registered the policies they received from Daumier Financial and from Giannini and Kanagasabey with insurers for whom they acted. In each instance, SLI provided the insurers with access to what SLI later discovered to be false information contained in the Applications.

B. False or Misleading Representations

16. SLI made representations in the registration of insurance that were later discovered to be false. SLI accepted the false or misleading Applications provided by Daumier and Giannini and Kanagasabey and registered those Applications with the relevant insurers without taking adequate steps to either assess or verify the information. SLI did so despite certain red flags including repeated payors, premium to income discrepancies, repeated bank accounts among unrelated payors, low persistency rates, and use of Giannini and Kanagasabey’s corporate address on a substantial number of policies.
17. As early as 2021, SLI staff had raised concerns with the business generated by Giannini and Kanagasabey, including discrepancies between applicants’ stated occupations and salaries and the amounts of insurance being taken out.
18. In late 2021, in response to these concerns, SLI executives attended the offices of Giannini and Kanagasabey to review their business, and spoke with GIS representatives. Despite red flags, SLI executives accepted the explanations provided by Giannini and Kanagasabey and allowed them to continue to submit applications and earn commissions. Process changes for applications submitted by Giannini and Kanagasabey were insufficient and not consistently followed, and they continued to submit Applications to SLI.
19. SLI did not have adequate systems in place to assess and verify the Applications submitted by Daumier Financial or Giannini and Kanagasabey. SLI had limited compliance staff and compliance leadership with little or no experience in insurance compliance. SLI also had inadequate systems in place to detect fraudulent activity.
20. SLI benefitted economically at the time from the high volume of policies. After the fraud came to light, SLI pursued legal proceedings to recover losses.

C. SLI’s Current Business

21. In December 2025, an insurer purchased an 80% interest in SLI. As a result, the owners and executives in charge at the time of the contraventions are no longer with SLI.
22. As a result of the investigation by FSRA into the Applications, SLI has increased its compliance staff and has made fundamental changes to its business model. Foremost is the fact that SLI no longer uses third party life insurance agents or MGAs to distribute insurance. SLI currently has approximately 105 licensed insurance agents on staff.
23. SLI has put additional employees and controls in place regarding identification, auditing policy information, as well as policies and procedures to implement compliance functions.

IV. CONTRAVENTIONS OR FAILURES TO COMPLY WITH THE ACT

A. False Statements in the Solicitation or Registration of Insurance

24. Section 17(c) of Ontario Regulation 347/04 prohibits a life insurance agent from making a false or misleading statement or representation in the solicitation or registration of insurance. A life insurance agent’s actual knowledge of the falseness or misleading nature of the statement or representation is not necessary to establish a contravention.
25. SLI repeatedly provided representations to the insurers it contracted with which SLI later determined to be false or misleading by registering policies placed by Daumier Financial, Giannini and Kanagasabey. SLI registered policies with the insurers it acted for and did so without adequately verifying the information it provided and in circumstances which ought to have attracted SLI’s scrutiny. SLI engaged in this conduct in relation to two distinct groups of agents, namely Daumier Financial and Giannini and Kanagasabey.
26. SLI did not conduct appropriate independent oversight of the MGAs or agents or have in place adequate systems to ensure that it was not facilitating fraudulent conduct, despite concerns being raised by staff and apparent problems with the Applications.

B. Unfair or Deceptive Act or Practice

27. Section 439 of the Act prohibits any person from engaging in an UDAP.
28. Section 438 of the Act defines a UDAP as any activity or failure to act that is prescribed by the Authority rules as an unfair or deceptive act or practice.
29. The UDAP Rule first came into force on April 1, 2022, replacing Ontario Regulation 7/00. Since the UDAP Rule came into force, the registration of policies after this date that involved false or misleading information contravenes the UDAP Rule, even if the entity was not aware of the false or misleading nature of the information. As described above, a substantial majority of the Applications registered by SLI were submitted after April 1, 2022.
30. Under section 2(1) of the UDAP Rule, a UDAP is prescribed as conduct, including inaction or omission, which results in, or could reasonably be expected to result in the outcomes, events or circumstances set out in sections 3 through 12 of the UDAP Rule.
31. Section 8(1) of the UDAP Rule specifies that it is a UDAP where conduct causes a person to receive information that a reasonable recipient would consider inappropriate, inaccurate or misleading, respecting the terms of any contract of insurance issued or to be issued
32. Following the coming into force of the UDAP Rule, SLI registered a substantial number of Applications which were later revealed to contain false and misleading information with the insurers it acted for. Among other things, the insureds’ names, health information, and addresses were false. In numerous instances, the existence of a life to insure was false and misleading.

V. GROUNDS FOR IMPOSING ADMINISTRATIVE PENALTIES

33. The Director is satisfied that imposing administrative penalties on SLI under section 441.3(1) of the Act will satisfy one or both of the following purposes under section 441.2(1) of the Act:
    1. To promote compliance with the requirements established under the Act.
    2. To prevent a person from deriving, directly or indirectly, any economic benefit as a result of contravening or failing to comply with a requirement established under this Act.
34. The Director is satisfied that four administrative penalties in the total amount of $800,000 should be imposed on SLI in respect of Applications registered in connection with fraudulent policies placed by Daumier Financial and Giannini and Kanagasabey, for misrepresentations in the registration of insurance contrary to section 17(c) of Ontario Regulation 347/04 and section 8(1) of the UDAP Rule.
35. 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.
    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.
36. In respect of the first criterion, the Director is satisfied that SLI was negligent in how it operated its business, which resulted in SLI unknowingly registering approximately 6,500 fraudulent policies with the insurers.
37. SLI had inadequate compliance expertise and systems in place to identify and prevent fraudulent activity. Internal emails show that executive leadership did not sufficiently consider staff-identified concerns about the business and red flags. SLI did not take sufficient actions to rectify the issues with this business until FSRA asked it to review Daumier Financial in mid-2023.
38. In respect of the second criterion, the Director is satisfied that serious harm has resulted from SLI’s actions. Over 6,500 policy applications were registered with insurers for individuals who did not exist or that otherwise contained false information.
39. SLI’s conduct has the potential to harm public confidence in the regulatory regime established by the Act. The nature of the fraudulent activity, coupled with SLI’s failure to detect and prevent it, calls into question the efficacy of having licensed entities as intermediaries and the credibility of the sector.
40. In respect of the third criterion, the Director has considered that SLI has taken remedial action by putting in systems to detect fraudulent activity and limiting its’ business to agents working directly for SLI. However, these measures were only taken after FSRA identified concerns regarding Daumier Financial. SLI’s action does not address the harm to public confidence in the regulatory regime.
41. In respect of the fourth criterion, the Director is satisfied that SLI received at the time a significant economic benefit for the false policies. After the fraud came to light, SLI pursued legal proceedings to recover losses.
42. In respect of the fifth criterion, the Director is not aware of 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 SLI.
43. Such further and other reasons as may come to my attention.

DATED at Toronto, Ontario, May 22, 2026

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 a : contactcentre@fsrao.ca.