Temporary pink slips that went uncovered: What the court said

Alberta’s Court of the King’s Bench has ordered the Insurance Council of Alberta’s appeal panel to re-consider a matter involving allegations that a broker issued temporary auto insurance pink slips for which there was no insurance coverage.

Retired broker Anthony Bentley has at all times denied the council’s allegations, which arose from a complaint made by Bentley’s former employer, Insuraline. The Alberta court decision makes it clear Bentley has never been accused of having taken any of the premium money from his clients.

Bentley had an acrimonious fallout with Insuraline, which led to his termination from the brokerage in December 2019.

“Throughout the summer and autumn of 2019, Mr. Bentley and the director of Insuraline had many conflicts, ostensibly about the quality and calibre of Mr. Bentley’s work,” as the court described the situation in a decision released Monday. “The conflict continued and resulted in an increasingly acrimonious relationship between Mr. Bentley and the Insuraline representatives.

“On Nov. 6, 2019, the concern over Mr. Bentley’s work product resulted in the brokerage firm instructing him to stop writing any policies with Insuraline.

“Insuraline claimed that despite this instruction, he continued to complete applications and issue temporary pink cards for motor vehicle insurance. During this time, Insuraline alleged that the insurance applications and required supporting documentation was not submitted by Mr. Bentley, as required. So, despite the fact that the client obtained temporary pink cards from Mr. Bentley indicating they had vehicle insurance, no insurance coverage was ever obtained.”

Brokers selling insurance are allowed to provide temporary pink cards to drivers that are good for a limited period of time. Temporary pink cards are “proof” of insurance between the time the client applies for the policy and coverage is formally granted. Bentley could issue temporary pink cards to clients, however, these cards could only be issued by him after his clients had applied for insurance, and after their application forms had been submitted to the insurance provider.

After his termination, Insuraline made a complaint to council alleging Bentley issued 78 temporary auto insurance pink slips for which there was no subsequent insurance coverage, the Alberta court ruling notes.

The province’s broker regulator investigated Insuraline’s complaint and found Bentley to be in breach of the province’s Insurance Act. S. 480(1)(a) of the act states a broker’s licence can be revoked “if the holder or a former holder of a [broker’s licence] has been guilty of misrepresentation, fraud, deceit, untrustworthiness or dishonesty.”

Related: Electronic Proof of Auto Insurance Receives Approval in Ontario

Bentley successfully appealed the council’s decision to the regulator’s appeal board. The appeal board noted the offence under s.480(1)(a) requires proof of intention. But the council didn’t have enough evidence to prove intention, the appeal board ruled.

“The appeal board commented on the lackluster state of the evidence before it from both parties,” the Alberta Court of the King’s Bench wrote, after the regulator sought judicial review of the appeal board’s finding.

“On Mr. Bentley’s part, the appeal board said that he ‘clearly could have produced other relevant documents’ but did not. On council’s part, the appeal board commented that ‘there is a dearth of evidence which could have been obtained from Insuraline, and the departure of the investigator [mid-way through his investigation] caused further problems.’

“The appeal board concluded that they were ‘left with an incomplete evidentiary picture…[however]…It is the council’s burden to prove its case.”’

Council took the appeal board’s decision to court. The regulator did not question several aspects of the appeal board’s findings, but it noted the appeal board did not address council’s contention that Bentley also breached s. 509(1) of the act.

S.509(1) states: “No…insurance agent…may make a false or misleading statement, representation…engage in any unfair, coercive or deceptive practice.”

Unlike s. 480(1)(a), s. 509(1) of the act doesn’t require council to prove intentionality, just whether or not this happened, council argued before court.

The court granted this part of council’s appeal and sent the matter back to the appeal board to decide this question.

 

Feature image courtesy of iStock.com/Double_Vision