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IN THE MATTER OF the Insurance Act, R.S.O. 1990, c.I.8, as amended (the “Act”), in particular sections 392.4 and 407.1;
AND IN THE MATTER OF Chad E. Martin.
MINUTES OF SETTLEMENT AND UNDERTAKING
PART I – INTRODUCTION
- Chad E. Martin (“Martin”) was licensed as a life insurance and accident & sickness insurance agent (licence # 97045857) under the Act until the licence expired on August 1, 2020. Martin was first licensed in Ontario as an agent in 1997 and has been licensed for most of the period to the date his licence expired.
MBLAA AMP Order
- On February 21, 2019, the Executive Director, Licencing and Market Conduct Division, by delegated authority from the Superintendent of Financial Services, issued a Notice of Proposal under Section 39 of the Mortgage Brokers, Lenders, and Administrators Act (the “MBLAA”) proposing to impose an administrative penalty (“AMP”) in the amount of $10,000 for contravening subsection 2(3) of the MBLAA (the “MBLAA NOP”).
- Martin did not request a hearing in respect of the MBLAA NOP.
- On June 8, 2019, the Financial Services Regulatory Authority of Ontario (“FSRA”) took over the duties and responsibilities of the Financial Services Commission of Ontario, and the Chief Executive Officer of FSRA (the “CEO”) took over the duties and responsibilities of the Superintendent of Financial Services.
- FSRA subsequently issued an order under Section 39(7) of the MBLAA imposing an AMP in the amount of $10,000 on September 16, 2020 (the “AMP Order”), as proposed in the MBLAA NOP. Martin has not paid the AMP as of the date of the execution of these Minutes.
Martin’s Insurance Agent Licence Renewal Application
- On July 28, 2020, Martin applied to renew his life insurance and accident and sickness insurance agent licence.
- On August 17, 2021, the Senior Manager, Licensing Compliance, (the “Senior Manager”), by delegated authority from the CEO issued a Notice of Proposal under Section 407.1 of the Act (the “IA NOP”), proposing to refuse to renew Martin’s licence on the ground that Martin was unsuitable to continue to be licenced as an insurance agent.
- On September 1, 2021, Martin filed a Request for Hearing (“RFH”) before the Financial Services Tribunal (the “Tribunal”) in respect of the IA NOP.
- Martin’s licence expired on August 1, 2020. Martin has not acted as an insurance agent in Ontario since the expiry of his licence.
- Martin and the Director, Litigation and Enforcement (the “Director”) by delegated authority from the CEO, (collectively the “Parties”) wish to resolve this matter on consent and without a hearing before the Tribunal.
PART II – AGREED FACTS
- The Parties agree to, and Martin admits to the facts contained in Paragraph 20 in Part III.b. of the IA NOP, and the facts contained in Parts IV. and V. of the IA NOP.
PART III – NON-COMPLIANCE WITH STATUTORY PROVISIONS
- By engaging in the conduct admitted in Part II of these Minutes,
- Martin admits and acknowledges that he provided false information in his licence renewal application and therefore made a material misstatement or omission in his renewal application for his insurance agent licence as contemplated by Section 8 of Ontario Regulation 347/04; and
- Martin agrees that he has failed to comply with the AMP Order, which is an offence as per Section 48(4) of the MBLAA.
- In view of the above, Martin agrees and consents to the Terms of Settlement denoted in Part IV of these Minutes.
PART IV – TERMS OF SETTLEMENT
- Martin acknowledges that these Minutes are an undertaking within the meaning of the Act, and that failure to comply may result in immediate regulatory action including, but not limited to, the issuance of a Notice of Proposal to impose additional administrative penalties or a prosecution under the Provincial Offences Act.
(a) Licence Renewal Application
- Martin shall withdraw his insurance agent licence renewal application dated July 28, 2020, within three business days of receiving an executed copy of these Minutes.
- Martin agrees and undertakes that he shall not apply for the renewal of his insurance agent licence prior to December 31, 2022, and shall apply only after complying with the
AMP Order in the manner described in Part IV(b) of these Minutes. Martin agrees that FSRA may refuse any licence renewal application that he may submit prior to December 31, 2022, and if such application is made prior to complying with the AMP Order.
- If Martin applies to renew his license after January 1, 2023 and FSRA finds that his application meets all requirements stipulated by the Act and its Regulations, Martin shall consent to FSRA imposing the following substantive supervision conditions on his licence for a period of 12 months commencing from the date of renewal of his licence:
- Martin will work as an insurance agent for a licensed insurer only;
- Martin’s work as an insurance agent will be supervised by a licensed insurance agent (the “Supervisor”), acceptable to the Senior Manager, Licensing Compliance, with at least three (3) years of experience as an insurance agent;
- The period of supervision shall begin on the date that the licence is issued and end one (1) year later;
- Martin and the Supervisor shall submit quarterly written reports to the Senior Manager, Licensing Compliance or any other person specified by FSRA, regarding the Applicant’s insurance agent business activities for a period of one (1) year, and such reports shall be in the form and scope required by FSRA;
- If the Supervisor cannot continue to supervise Martin, the Supervisor and Martin shall notify the Senior Manager, Licensing Compliance, within five (5) days of the Supervisor withdrawing their supervision. If the Supervisor ceases supervising the Applicant, Martin shall cease all insurance agent business activity immediately until a new supervisor has been approved by FSRA; and
- Martin agrees that he may be subject to an examination of their insurance files from time-to-time at the discretion of the FSRA.
(b) AMP Order
- Martin undertakes to pay the $10,000 AMP (the “AMP Amount”) as required by the AMP Order.
- Martin shall pay the AMP Amount prior to applying for the renewal of his insurance agent licence, and in accordance with the terms agreed to by the Parties in the correspondence exchanged between them.
(c) Process for Execution of Settlement
- Martin acknowledges that these Minutes are not binding on the Director until signed by the Director.
- These Minutes may be executed in counterparts and may be executed and delivered by facsimile or e-mail and all such counterparts and facsimiles or e-mails, as applicable, shall together constitute one and the same agreement.
- Upon receiving an executed copy of these Minutes from FSRA, Martin will withdraw his Request for Hearing (Form 1) in respect of the IA NOP before the Tribunal by completing a Withdrawal/Discontinuance (Form 5) and filing it with the Registrar at the Tribunal within three business days.
- The Parties accept and understand that these Minutes and any rights within the Minutes shall enure to the Parties and to any successors or assigns of the Parties.
(d) Disclosure of Minutes
- The Parties will keep the terms of these Minutes confidential until these Minutes are executed by the Parties, except that:
- The Director shall be permitted to disclose the Minutes within FSRA; and
- The Parties shall be permitted to inform the Tribunal.
- If either of the Parties do not sign these Minutes:
- These Minutes, and all related discussions and negotiations will be without prejudice to FSRA and Martin; and
- FSRA and Martin will each be entitled to all available proceedings, remedies and challenges, including proceeding to a hearing of the allegations contained in the IA NOP. Any proceedings, remedies and challenges will not be affected by these Minutes, or any related discussions or negotiations.
- Upon the signing of these Minutes:
- Martin agrees that these Minutes form part of his administrative record for the purposes of any future licensing decision or as an aggravating factor in respect of a future administrative penalty or prosecution against them or any affiliated entities;
- Martin acknowledges that these Minutes are public and will be published by FSRA on its public website (or that of its successor) along with a press release that summarizes these Minutes; and
- The Parties agree not to make representations to any member of the public or media or in a public forum that are inconsistent with these Minutes.
(e) Further Proceedings
- Whether or not these Minutes are executed, Martin will not use, in any proceeding, these Minutes or the negotiation or process of approval of these Minutes as the basis for any attack on FSRA’s jurisdiction, alleged bias, alleged unfairness, or any other remedies or challenges that may be available.
- Upon the execution of these Minutes:
- Martin waives all rights to a hearing before the Tribunal regarding the IA NOP;
- The Director agrees that FSRA will not take any further proceedings against Martin arising solely from the facts contained in the IA NOP and in Part II of these Minutes, unless facts not disclosed by Martin come to the attention of FSRA that are materially different from those contained in the IA NOP and in Part II of these Minutes, or if Martin fails to comply with any term in these Minutes; and
- Martin agrees that if he fails to comply with any term in these Minutes, FSRA is entitled to bring any proceedings available to it.
DATED at Bancroft, Ontario, June 28, 2022
Original signed by
Chad E. Martin
DATED at Bancroft, Ontario, June 28, 2022
Original signed by
Name of Witness
DATED at Toronto, Ontario, July 6, 2022
Original signed by
Director, Litigation and Enforcement
Financial Services Regulatory Authority of Ontario
By delegated authority from the Chief Executive Office
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