Former life agent fined for client servicing scheme

A former life agent has been sanctioned by the Financial Services Regulatory Authority of Ontario (FSRA) for his involvement in a scheme to continue serving clients after his licence expired.

FSRA imposed a $50,000 penalty on former life agent Daniel Tiffin for violating its rules by acting as an insurance agent without a licence.

According to the regulator’s allegations, after Tiffin’s licence expired in 2019 and he withdrew an application to renew that licence after discussions with FSRA, he arranged for some of his clients to be transferred to another agent — Tejpal Mann — in an arrangement that would see them share commissions.

“Tiffin continued to act as the insurance agent and Mann signed the paperwork,” FSRA said in a notice.

FSRA has proposed a $20,000 penalty against Mann, alleging that he violated insurance law by paying compensation to someone without a licence. Mann has requested a hearing to dispute the allegations against him, which have not been proven.

The regulator brought similar allegations against Tiffin earlier this year, but he requested a hearing on those allegations, which have not been proven. Tiffin didn’t request a hearing to contest the latest allegations.

In the earlier case, another life agent, Yogender Jain, had his licence revoked and was hit with a $100,000 penalty after FSRA alleged he also entered an arrangement that allowed Tiffin to keep serving his clients after his licence expired, and that Jain also churned many of those clients into new segregated funds, generating large commissions.

According to FSRA’s allegations in the latest case, Tiffin received almost $22,000 from Mann, who generated $84,612.51 in commissions from Tiffin’s clients.

The arrangement lasted about two months. In May 2021, after Mann was sued along with Tiffin, Tiffin’s assistant and his company, “Mann stopped communications with Tiffin,” FSRA said.

That same month, Industrial Alliance (iA) alerted FSRA to possible misconduct involving Mann and Tiffin, and conducted its own investigation. That investigation found “several potential irregularities … after reviewing Mann’s book of business including the seven change-of-agent-of-record requests in Mann’s favour for clients who were formerly serviced by Tiffin and/or [Jain],” FSRA said. “In addition, iA identified 14 annuity applications where the paperwork appeared to be completed in the same handwriting as Tiffin’s past paperwork.”

Most of the commissions generated from the clients were eventually charged back by iA to Mann’s managing general agency, Akal Insurance, which is “seeking the money from Allkind Insurance, who has in turn sued Mann,” the regulator noted.

Ultimately, FSRA concluded that Tiffin violated insurance law and regulations when he “intentionally engaged in insurance business after becoming unlicensed,” that he benefited financially from the misconduct, and that those activities caused harm.

“The insurance agent licensing regime … is a critical and necessary component in protecting the public interest,” FSRA said. “The public is entitled to have confidence that the licensing regime will only allow properly qualified and licensed agents to solicit, negotiate and place insurance. By acting as an insurance agent, Tiffin undermined the integrity of the licensing regime and consequently harmed the public interest.”

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.