REGARDING the Insurance Act, R.S.O. 1990, Chapter I.8, as amended, in particular section 441

AND REGARDING an Interim Cease and Desist Order against Société Canadienne De Cautionnement (S.C.C.) Inc., Gestion Lamca Inc. and Roger Goulet

NOTICE OF INTERIM CEASE AND DESIST ORDER

BACKGROUND

On October 14, 2003, the Superintendent of Financial Services ("Superintendent") issued a Notice of Proposed Cease and Desist Order against Canadian Bonding Corporation, Lamca Holdings Inc., and Roger Goulet. The proposed cease and desist order related to surety bonds and bid bonds issued by Canadian Bonding Corporation to persons in Ontario to cover risks in the Province of Ontario without being licensed as an insurer under the Insurance Act.

A hearing was requested before the Financial Services Tribunal ("FST"). To date no hearing before FST has been scheduled and no decision on the merits of whether or not a permanent cease and desist order should be issued has been made.

Since the issuance of the Notice in October, 2003, investigation has continued and facts that are of concern to the Superintendent have been discovered. The Superintendent is satisfied that:

  1. The proper corporate names are as follows: Canadian Bonding Corporation is in law known as Société Canadienne De Cautionnement (S.C.C.) Inc.; and, Lamca Holdings Inc. is in law known as Gestion Lamca Inc.
  2. More surety bonds and bid bonds have been issued to persons in Ontario in respect of construction projects in Ontario, since the Notice of Proposed Cease and Desist was issued;
  3. Société Canadienne De Cautionnement (S.C.C.) Inc., Gestion Lamca Inc. and/or Roger Goulet have leased office space in Ontario from which to operate their business in Ontario; and,
  4. Société Canadienne De Cautionnement (S.C.C.) Inc. has not paid an Ontario court judgment in the amount of $181,392.26 awarded to a contractor on a claim for payment under a bond issued by Société Canadienne De Cautionnement (S.C.C.) Inc. with respect to a construction project in Ontario.

Pursuant to section 441(4) of the Insurance Act, if the Superintendent is of the opinion that the interest of the public may be prejudiced or adversely affected by any delay in the issuance of a permanent order, the Superintendent, without prior notice, may make an interim order which shall take effect immediately and which shall become permanent as against each and every named person unless within 15 days such person requests a hearing before the Financial Services Tribunal.

The Superintendent is of the opinion that the interest of the public may be prejudiced or adversely affected by any delay in the issuance of a permanent order for the following reasons:

  1. Since the initial proposal for a cease and desist order, Société Canadienne De Cautionnement (S.C.C.) Inc., Gestion Lamca Inc. and Roger Goulet have increased the amount of business in surety bonds, bid bonds, performance bonds in Ontario and have leased office space in Ontario in order to facilitate further sales and increase business in Ontario;
  2. On November 16, 2004, and December 9, 2004, judgments totalling $181,392.26 were issued by the Ontario Superior Court of Justice against Société Canadienne De Cautionnement (S.C.C.) Inc. in respect of a claim made by Don Fry Scaffold Service Inc. on a surety bond issued by Canadienne De Cautionnement (S.C.C.) Inc. in Ontario. The judgment has not been paid.

INTERIM CEASE AND DESIST ORDER

The Superintendent orders that Société Canadienne De Cautionnement (S.C.C.) Inc., Gestion Lamca Inc. and/or Roger Goulet and any agents or representatives thereof:


A. Immediately cease carrying on the business of insurance in the Province of Ontario as an insurer and/or agent;

B. Immediately cease issuing or delivering any form of surety bond, bid bond or performance bond or any form of surety, to or on behalf of persons resident or carrying on business in Ontario;

C. Immediately cease collecting money or anything else of value from any member of the public; in exchange for assisting in the placement of surety bonds, bid bonds or performance bonds or any form of surety in Ontario of any kind;

D. Immediately cease issuing any surety bond, bid bond or performance bond or any form of surety in respect of property or construction projects located in Ontario;

E. Immediately cease soliciting the sale of surety bonds, bid bonds or performance bonds or any form of surety in Ontario; and,

F Immediately cease advertising in any form within Ontario;

G. immediately provide the Superintendent with a written list of all surety bonds, bid bonds or performance bonds issued to, or on behalf of, persons resident or carrying on business in Ontario within the previous twelve (12) months, along with a list of all claims paid within the previous twelve(12) months and a list of all pending claims; and,

H. Immediately mail to all persons in Ontario, to whom any type surety bond has been issued, a copy of the Cease and Desist order and provide evidence satisfactory to the Superintendent that the mailing was done.


Marked as "Appendix A" is the Superintendent’s report setting forth the results of the investigation.

WITHIN 15 DAYS after this Order is made, you may request in writing that the Financial Services Tribunal hold a hearing to determine if this Order should become permanent.

IF NO HEARING IS REQUESTED within 15 days of the making of this Order, this Order shall become permanent.

Any request for a hearing should be directed to:

Financial Services Tribunal
5160 Yonge Street
North York, Ontario
M2N 6L9

Attention: Rhonda Booth, Registrar

TAKE NOTICE THAT section 447(2)(b) of the Insurance Act provides that any person who fails to comply with any order made under the Act is guilty of an offence and liable on a first conviction to a fine of not more than $100,000 and on each subsequent conviction to a fine of not more than $200,000.

AND FURTHER TAKE NOTICE THAT section 447(4) of the Insurance Act provides that every director, officer, and chief agent of a corporation who caused, authorised, permitted or participated in a corporation committing an offence, or who fails to take reasonable care to prevent a corporation from committing an offence, is also guilty of an offence and is liable on a first conviction to a fine of not more than $100,000 and on each subsequent conviction to a fine of not more than $200,000.

ISSUED AT the City of Toronto, May 19 , 2005.


Bryan P. Davies
Superintendent of Financial Services

To:

Société Canadienne De Cautionnement (S.C.C.) Inc.
5805 Des Erables
St. Emile PQ G3E 1J4

Gestion Lamca Inc.
5805 Des Erables
St. Emile PQ G3E 1J4

Roger Goulet
1662 Beaulieu App3
St Emile PQ G3E 1W5