2123513 Ontario Inc. o/a Way2save Financial Services v. Superintendent of Financial Services
FST Decision No.: M0380-2009-1
Date of Decision: August 17, 2009
Panel Member: John Solursh, Chair of the Financial Services Tribunal
Parties to hearing: 2123513 Ontario Inc. o/a Way2save Financial Services
The Superintendent of Financial Services
Subject: Order to Pay Administrative Monetary Penalty
The Superintendent issued a Notice of Proposal to Impose an Administrative Monetary Penalty of $1,000 on account of the failure of 2123513 Ontario Inc. o/a Way2save Financial Services (“Way2save”) to obtain and maintain errors and omissions liability insurance (“E&O insurance”) as required pursuant to O. Reg. 188/08, section 42 of the Mortgage Brokerages, Lenders and Administrators Act, 2006 (“Act”).
The Tribunal directed the Superintendent to carry out his proposal to impose an administrative monetary penalty upon Way2save in the amount of $1,000.
In its application for a mortgage brokerage licence, Way2save checked the box indicating that it understood that it was required under the Act to have E&O insurance in place by July 1, 2008. However, the only E&O insurance coverage that Way2save ever had after July 1, 2008 was the insurance relating to its real estate brokerage business through the Real Estate Council of Ontario (“RECO”).
Way2save’s Principal Broker acknowledged that communications issued by the Superintendent indicated that the E&O insurance coverage held through RECO clearly only applied to transactions under the Real Estate and Business Brokers Act, 2002, and specifically did not cover mortgage services.
Way2save’s Principal Broker also acknowledged that previous decisions by the Tribunal held that the imposition of an administrative monetary penalty of $1,000 is the appropriate disposition relating to the failure to obtain the requisite E&O insurance.
The Tribunal provided direction on the appropriate process for withdrawal of a request for hearing. The withdrawal of request for hearing should be sent by the brokerage directly to the Tribunal, or forwarded by the Superintendent to the Tribunal at the request of the brokerage. Further, the withdrawal of the request for hearing should make it clear that the brokerage is withdrawing the request for hearing opposing the Superintendent’s Notice of Proposal to Impose an Administrative Monetary Penalty, and is prepared to accept the proposed administrative monetary penalty.
Cases referred to:
Wong v. Superintendent of Financial Services (FST Decision No. M0375-2009-1)
Millenium Mortgage Corporation v. Superintendent of Financial Services (FST Decision No. M0365-2009-1)
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