FSRA fines former life agent $60K for recruitment scheme

A former life agent who took advantage of recruits to generate insurance business was fined $60,000 by the Financial Services Regulatory Authority of Ontario (FSRA), the regulator said on Thursday.

Chris Oppong, licensed from September 2020 to September 2022 and contracted with Ivari through managing general agency Greatway Financial Inc., trained recruits to join his sales team, in some cases charging them a fee or telling them they had to purchase an insurance policy to attend training, a regulatory notice dated September 2023 said.

In some cases, he reimbursed recruits for the first month’s premium, and recruits then let the policies lapse, the notice said.

Oppong signed other recruits up for policies without their knowledge or consent.

He admitted to reimbursing premiums to 22 policyholders — some of whom were his recruits — for 29 policies, the notice said.

“All of these activities were intended to generate insurance business and compensation for Oppong and increase his sales team,” it said.

Oppong received $39,600 in compensation for the 29 policies issued. While Greatway started a civil action to recover this amount plus other payments, the notice said, it hasn’t yet recovered any funds.

Oppong didn’t request a hearing or contest FSRA’s proposal of penalties.

The $60,000 fine included $40,000 for reimbursing premiums, $10,000 for using coercion and undue influence to secure insurance business, and $10,000 for fraudulently procuring payments of premiums.

Last October, FSRA said it took enforcement action against dozens of life agents contracted with Greatway as well as World Financial Group Insurance Agency of Canada Inc. and Experior Financial Inc. following a review the regulator conducted from May 2022 to April 2023. The review specifically looked at firms that tied compensation to recruitment.

In the review, of 50 Greatway life agents selected for examination, 19 were escalated to discipline officers; of these, 12 (63%) were issued notices to impose a monetary penalty and four (21%) were still under review as of May 31, 2023.

When FSRA shared its findings last fall, Greatway said it had implemented measures such as improved training and heightened agent supervision.

To strengthen oversight in the life insurance sector, the regulator has said one of its initiatives is developing a new proposed rule for MGAs.