September 27, 2005

Edmonton... Alberta's Superintendent of Insurance has issued fines to nine insurance companies for paying commissions to unlicensed insurance agents. Insurance companies are prohibited under the Insurance Act from paying commissions to unlicensed agents.

In almost all of the cases, the unlicensed insurance agents were car dealerships. Dealers receive an annual Certificate of Authority from the Alberta Insurance Council authorizing them to sell equipment warranty insurance or creditor's group insurance.

The Alberta Insurance Council, which monitors renewals of these certificates, reported the violations to the Superintendent of Insurance. After investigating the violations, the Superintendent decided to issue administrative penalties ranging from $1,000 to $4,000.

The insurance policies sold by the unlicensed agents are still valid and remain in force until they expire.

Companies sanctioned under the Insurance Act for paying commissions to unlicensed agents are:

• St. Paul Guarantee Insurance Company. Penalty: $3,000.
• Life Investors Insurance Company of America. Penalty: $4,000.
• Sovereign General Insurance Company. Penalty: $2,000.
• CIGNA Life Insurance Company. Penalty: $1,000.
• Canada Life Assurance Company. Penalty: $1,000.
• Old Republic Insurance Company of Canada. Penalty: $1,000.
• American Bankers Insurance Company of Florida. Penalty: $1,000.
• Motors Insurance Corporation. Penalty: $2,000.
• Millennium Insurance Company. Penalty: $4,000.

- 30 -

This information bulletin release is available on the Alberta Finance homepage at: http://www.finance.gov.ab.ca

Alberta Government Home | Ministries Listing | Alberta Finance Home Page | News Releases |Top of Page

Send us your comments or questions

Copyright(c); 2005 Government of Alberta