REGARDING the Insurance Act, R.S.O. 1990, c. I.8, as amended, in particular section 441
AND REGARDING Sania Muzaffar
INTERIM COMPLIANCE ORDER TO CEASE AND DESIST TRAINING ACTIVITY
Section 441 of the Insurance Act (the “Act”) provides that the Superintendent of Financial Services (the “Superintendent”) may give notice in writing of a cease and desist order with respect to unfair or deceptive acts or practices.
Subsection 441(4) provides that if the Superintendent is of the opinion that the interests 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 order which shall take effect immediately, and which shall become permanent on the 15th day after its making unless within that time the person requests a hearing before the Financial Services Tribunal.
The Superintendent will issue a Notice of Proposal to make a Permanent Cease and Desist Order and makes this Interim Cease and Desist Order.
INTERIM COMPLIANCE ORDER TO CEASE AND DESIST
IT IS ORDERED THAT pursuant to section 441(4) of the Act, and for the reasons described below,
- Immediately cease and desist providing training or teaching in any manner with respect to the Life Licence Qualification Program (“LLQP”) examination, in Ontario.
- Immediately cease and desist assisting anyone with any activity related to the teaching or training of the LLQP examination, in Ontario.
- Immediately cease and desist disseminating any information or documents related to the LLQP examination to anyone, including any insurance agents, insurance agent applicants, or anyone involved in training or teaching with respect to the LLQP examination.
- Immediately cease and desist posting any information or documents related to the LLQP examination on the internet.
- Immediately cease and desist accepting any fees or funds or anything of value with respect to teaching or training of the LLQP examination, in Ontario.
- Immediately cease and desist advertising, soliciting, or offering any services related to LLQP examination training or teaching, in Ontario.
TAKE NOTICE THAT this Interim Order takes effect immediately and will remain in effect until the expiry of the period for requesting a hearing in respect of the Superintendent’s Notice of Proposal as detailed in that Notice of Proposal (15 days after the Notice is given, or deemed to have been delivered).
AND TAKE NOTICE THAT pursuant to section 447 of the Act any person who fails to comply with any order made under the Act is guilty of an offence and liable on first conviction to a fine of not more than $250,000 and on each subsequent conviction to a fine of not more than $500,000.
AND TAKE NOTICE THAT subsection 447(4) of the Act provides that every director, officer and chief agent of a corporation and every person acting in a similar capacity or performing similar functions in an unincorporated association who caused, authorized, 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 first conviction to a fine of not more than $100,000 and on each subsequent conviction a fine of not more than $200,000.
Si vous désirez recevoir cet ordre en français, veuillez envoyer votre demande immédiatement à: Adjointe, audiences, Greffe, Commission des services financiers de l’Ontario, 5160 rue Yonge, 14em, Toronto ON M2N 6L9.
REASONS FOR ORDER
- Sania Muzaffar (“Ms. Muzaffar”) was first licensed as a Life Insurance Agent on November 25, 2015. She was sponsored by an insurer. Ms. Muzaffar’s licence was terminated on October 5, 2017.
- The Superintendent received information that Ms. Muzaffar was providing training to insurance agent applicants for the Life License Qualification Program (“LLQP”) examination.
- The Superintendent received reports that some insurance licence applicants were completing the LLQP examination in an abnormally short time, and passing with a high score.
- As part of the investigation, some of these candidates wrote a different variation of the LLQP examination under the Superintendent’s supervision. Those candidates took a much longer time to write the varied examination, and failed the examination.
- The Superintendent conducted an examination of Ms. Muzaffar’s training activities with respect to the LLQP examination. An Investigator from the Financial Services Commission of Ontario (“FSCO”) interviewed Ms. Muzaffar on October 12, 2017.
- During the examination, the FSCO Investigator asked Ms. Muzaffar for a copy of her training materials, contained on a USB key. The Investigator advised that he will be seizing the USB key. Before Ms. Muzaffar provided the USB key to the Investigator, the Investigator noticed that Ms. Muzaffar appeared to delete some content from it.
- During the interview, the FSCO Investigator asked Ms. Muzaffar if she had copies of questions from the LLQP examination. Ms. Muzaffar stated that she did not have copies of questions from the LLQP examination.
- After Ms. Muzaffar’s USB key was seized, deleted files were recovered from it. The deleted files included questions which were confirmed to be almost identical copies of LLQP examination questions in the same order as in the examination.
- Ms. Muzaffar later admitted that she did delete the examination questions from her USB key during the meeting with the investigator.
- In January and March 2017, Ms. Muzaffar wrote eight modules of the LLQP examination. Ms. Muzaffar was licensed as an insurance agent at the time and was not required to write the LLQP licensing examination at the time. Ms. Muzaffar failed every module she wrote in January and March 2017.
- The Superintendent is satisfied that Ms. Muzaffar engaged in unfair or deceptive acts or practices by indirectly furnishing false, misleading or incomplete information to the Commission. By writing examinations that are submitted to FSCO as a part of the licensing process, applicants represent to FSCO that they are writing the examination in good faith, and that if they pass, they do so through legitimate means. In the case of applicants trained by Ms. Muzaffar to pass through illegitimate methods, the applicants provided false and misleading information to FSCO. The Superintendent is therefore satisfied that Ms. Muzaffar indirectly provided false or misleading information to FSCO by providing such training and compromising the LLQP examination.
- The Superintendent is satisfied that Ms. Muzaffar engaged in unfair or deceptive acts or practices by furnishing false, misleading or incomplete information to the Commission. Ms. Muzaffar told the FSCO Investigator that she did not have a copy of the LLQP examination question, when that was not true.
- The Superintendent is satisfied that Ms. Muzaffar engaged in unfair or deceptive acts or practices by failing to furnish the Superintendent with the records requested.
- The Superintendent is satisfied that Ms. Muzaffar engaged in unfair or deceptive acts or practices by obstructing the Superintendent’s examination.
- The Superintendent is satisfied that Ms. Muzaffar engaged in unfair or deceptive acts or practices by contravening a term, condition, or restriction imposed by a licence. A condition of an insurance agent licence is that the applicant is not engaged in any business or occupation that would jeopardize the applicant’s integrity, independence, or competence as an agent. By providing training on how to pass the LLQP examination illegitimately, Ms. Muzaffar has jeopardized her integrity as an insurance agent.
- The Superintendent is of the opinion that the interest of the public may be adversely affected by any delay in making a permanent compliance order against Ms. Muzaffar for the following reasons:
- Ms. Muzaffar taught applicants how to illegitimately pass the LLQP examination, in part by using copies of actual questions from the LLQP examination in her training;
- There is a risk that applicants that obtain life insurance agent licenses with the help of Ms. Muzaffar’s methods do not have an adequate understanding of insurance principles and products. This represents a significant risk to the public, as licensed agents may be offering improper advice and suggesting products that may not be suitable to consumers’ needs.
- The Superintendent is therefore satisfied that it is necessary to make an interim order preventing Ms. Muzaffar from providing training for the LLQP examination.
DATED at Toronto, Ontario, July 19, 2018.
Original signed by
Superintendent of Financial Services
Financial Services Tribunal
5160 Yonge Street, 14th Floor, Box 85
Toronto ON M2N 6L9
Tel: (416) 226-7752
Fax: (416) 226-7750
Ministry of the Attorney General, Civil Law Division
Financial Services Commission of Ontario Branch
5160 Yonge Street, 17th Floor
Toronto ON M2N 6L9
Michael Spagnolo / Ariel Schneider
Tel: (416) 226-7851 / (416) 590-7203
Fax: (416) 590-7556
Counsel for the Superintendent of Financial Services