Financial Services Tribunal & Pension Commission of Ontario Case Summaries/
Summaires des décisions du Tribunal des services financiers et de la Commission des régimes de retraite de l'Ontario

Case Name/nom du dossier:Sengmanee v. Ontario (Superintendent Financial Services)

Type/type:Insurance/Assurance

Decision Date/Date de la décision:2014-08-04

Tribunal/tribunal:FST/TSF




Phonepasit Sengmanee v. Superintendent of Financial Services

FST File No.: I0584-2014-1

Date of decision: August 4, 2014

Panel members: Bethune Whiston, Florence Holden (Acting Chair), Denis Boivin (Acting Vice-Chair)

Parties to hearing: Phonepasit Sengmanee; Douglas Lee (for the Superintendent of Financial Services).

SUBJECT: INSURANCE AGENTS; NOTICE OF PROPOSAL TO IMPOSE AMP; HEARING

Summary:

The Applicant, Phonepasit Sengmanee, was at the relevant time licensed to carry on business as a life insurance agent. On July 25, 2014 the Superintendent issued to the Applicant a Notice of Proposal (NOP) to impose an Administrative Monetary Penalty (AMP) in the amount of $1,000.00. The AMP was for a contravention of the duty under section 442.3(1) of the Insurance Act (the “Act”) to give information to the Superintendent about activities related to the business of insurance or activities related to the business of a person who holds or held a licence under the Act. Specifically, it was alleged that Mr. Sengmanee was selected to respond to the Superintendent’s questionnaire relating to the processes by which life insurance agents recommend insurance products to the public. Selected life insurance agents were notified by email that they were chosen to respond to the questionnaire and their statutory duty to respond.

The Applicant filed a Request for Hearing on August 15, 2014. The Hearing was held June 3, 2015 with the Applicant participating in person.

There were three issues before the Tribunal. The first was whether Mr. Sengmanee breached section 442.3(1) of the Act by failing to provide information to the Superintendent. Second, if the answer to that issue was yes, then the second question was whether an AMP should be imposed and, if so, in what amount?

The Tribunal accepted as fact that the Superintendent notified Mr. Sengmanee that he had been selected to respond to the questionnaire, using a valid email address for Mr. Sengmanee that he provided in his licence application. The Tribunal found that Mr. Sengmanee held a valid life insurance agent licence at the time that the questionnaire was active. However, Mr. Sengmanee’s disillusionment with the career of a life insurance agent led him to stop acting as an agent by June 2013, and he ignored any further communications from the insurance industry. That said, the Tribunal found that the answer to the first question at issue was ‘yes’.

The Tribunal, however, found that Mr. Sengmanee was living through extreme, unique personal circumstances that distracted him. In particular, he had separated from his wife, had unstable employment, and his youngest child was chronically ill with a rare and life-threatening disorder. These circumstances led Mr. Sengmanee to be consistently between four different towns in Ontario. The Tribunal accepted that Mr. Sengmanee’s personal circumstances would not permit him to understand the mandatory nature of the questionnaire.

The Tribunal then found that the imposition of an AMP would not serve either of the two purposes set out in the legislation, namely to promote compliance with the Act generally and to prevent Mr. Sengmanee from deriving economic benefit from his contravention. The Tribunal found that the extreme personal circumstances would unlikely encourage other life agents to flaunt their statutory duty to respond to the Superintendent and that Mr. Sengmanee did not derive any economic benefit from his contravention. The permissive language of the Act meant that there was a discretion to impose an administrative penalty and Mr. Sengmanee’s personal circumstances called for the exercise of discretion.

Having examined the law and Mr. Sengmanee’s circumstances, the Tribunal concluded that an administrative penalty would not serve either of the two purposes of the Act, and consequently declined to consider the third issue of the amount of the penalty to be imposed. Accordingly, the Tribunal ordered the Superintendent not to carry out the proposal to impose the administrative penalty on Mr. Sengmanee.

Cases cited:

Notta v. Ontario (Superintendent of Financial Services),2015 ONFST 2
Molenda v. Ontario (Superintendent of Financial Services),2015 ONFST 18
Pirapakaran v. Ontario (Superintendent of Financial Services),2015 ONFST 20

This summary is offered as a public service and should not be relied upon as legal advice. Many factors unknown to us may affect the applicability of any statement or comment made in the summary to your particular circumstances.