Cease and Desist Order Against ING Insurance Company of Canada ("ING") and ING Novex Insurance Company of Canada ("Novex")

On August 22, 2005 the Superintendent of Financial Services issued the following order:

REGARDING the Insurance Act, R.S.O. 1990,
Chapter I.8, as amended, in particular section 441,
and the Automobile Insurance Rate Stabilization Act,
2003, S.O. 2003, c.9.

AND REGARDING ING Insurance Company
of Canada (“ING”) and ING Novex Insurance Company of Canada (“Novex”).

CEASE AND DESIST ORDER

On August 4, 2005, the Superintendent of Financial Services (“Superintendent”) issued a Notice of Proposed Cease and Desist Order as she was of the opinion that ING and Novex had committed an unfair or deceptive act or practice by inadvertently charging rates for coverages or categories of automobile insurance that were not approved by the Superintendent.

On August 4, 2005, ING and Novex were each served with a copy of the Notice of Proposed Cease and Desist Order. Neither ING nor Novex requested a hearing within 15 days.

TAKE NOTICE THAT pursuant to section 441(7) of the Insurance Act (“the Act”), the Superintendent hereby orders that ING and Novex (“Companies”):

(A) Reimburse affected policyholders by a date and in a manner acceptable to the Superintendent. The plan for reimbursement shall include the following features:

(i) In any case where the amount to be reimbursed is $5 or greater, reimbursement for the appropriate amount plus interest shall be sent to the latest address on file, or the last known address from the policyholder’s broker.

(ii) A notice shall be placed in a national newspaper informing the public of the reimbursement process and the fact that amounts to be reimbursed of less than $5 can be obtained upon request.

(iii) Any amounts that remain unclaimed after an appropriate period of time shall be donated to Safe Kids Canada/SécuriJeunes Canada - National injury prevention program of the Hospital for Sick Children.

(B) On or before the Companies’ next annual general meeting, the Companies shall provide to the Superintendent confirmation, in writing, that their respective boards of directors are satisfied that their current:

(i) written internal control procedures with respect to the handling of policyholder complaints are effective and that senior company officials, with appropriate authority, have the responsibility and adequate resources to oversee the receipt, investigation and response to policyholder complaints, including those complaints involving rates, classification and billing; and,

(ii). written internal control procedures with respect to system change management are effective and that any system change that will have, or potentially have, an impact on rates applied to policyholders, are reviewed and approved by a management official or committee with management responsibility extending beyond the operational unit proposing the change and that system changes are consistent with current industry and IT standards.

TAKE NOTICE THAT section 447(2) of the 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 Act provides that every director, officer, and chief agent of a corporation 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 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, August 22, 2005

 

___________________________________
Cheryl Cottle
Superintendent of Financial Services (Acting)

 

TO:

ING Insurance Company of Canada
(Compagnie d'Assurance ING Du Canada)
181 University Avenue, 7th Floor
Toronto, Ontario M5H 3M7

Attn:
Mr. Derek Iles, Executive Vice President, ING Canada

AND TO:

ING Novex Insurance Company of Canada
(ING Novex Compagnie d'Assurance du Canada)
181 University Avenue, 7th Floor
Toronto Ontario M5H 3M7

Attn:
Mr. Derek Iles, Executive Vice President, ING Canada