Cease and Desist Order Against the Western Assurance Company

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


AND REGARDING the Western Assurance Company.


CEASE AND DESIST ORDER

On November 25, 2005, the Superintendent of Financial Services ("Superintendent") issued a Notice of Proposed Cease and Desist Order as he was of the opinion the Western Assurance Company (Western) 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 November 28, 2005, Western was served with a copy of the Notice of Proposed Cease and Desist Order. The Insurance Act provides that within15 days after receiving the notice, a person may request a hearing before the Financial Services Tribunal. On November 28, 2005, Western waived its right to a hearing.

TAKE NOTICE THAT pursuant to section 441(2) of the Insurance Act ("the Act"), the Superintendent orders Western to:

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

(i) On or before December 15, 2005, Western shall notify both current policyholders and those whose policies have been cancelled or terminated of their entitlement to reimbursement and the amount to be reimbursed. The amount reimbursed shall include interest.

(ii) Reimbursement shall be by means of either cheque or credit to the policyholder’s account.

(iii) In any case where the address of a former policyholder is unavailable or a cheque sent to a policyholder remains uncashed after a specified date, the reimbursement amount plus interest shall be donated to charity.

(B) On or before February 28, 2006, Western shall provide written confirmation to the Superintendent that its board of directors is satisfied that Western’s written internal control procedures with respect to system change management have been
reviewed and amended so that the deficiencies that resulted in, or permitted, the charging of unapproved rates has been appropriately addressed.

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, December 2, 2005

 

______________________________________
Robert Christie
Chief Executive Officer and
Superintendent of Financial Services

 

TO:

Mr. Rowan Saunders
President and Chief Executive Officer
Western Assurance Company
10 Wellington Street East
Toronto ON M5E 1L5