The Insurance Council of British Columbia (ICoBC) published an intended decision recently against Andreas Lauri Hinkkala, which says the agent recommended and facilitated insurance products that were not in a client’s best interest. ICoBC says his actions also brought into question his competency as a life and accident and sickness insurance agent.
According to the decision, the ICoBC says Hinkkala was likely motivated by insurance commissions when he redeemed and transferred a significant percentage of a client’s mutual funds to pay policy premiums.
Paid premiums at different times on six different policies
All told, the complaining client (the complainant) reportedly paid premiums at different times on six different policies for herself and for her children. The first three were taken out with her spouse before their separation in 2011. When her advisor also left the national agency she was with in 2011, the complainant switched her insurance to another licensed advisor (advisor #2) and switched her mutual funds to Hinkkala.
Advisor #2 then recommended that the complainant use the yearly gains from her mutual fund investment to pay the total planned premiums for a policy to replace one of the original policies set up with her spouse back in 2009. In January 2012, the complainant moved the management of all of her insurance policies to Hinkkala.
Over several years the complainant’s fourth policy lapsed several times due to non-payment. When meeting with the complainant to reinstate the policies, Hinkkala reportedly then sold her two more policies. Given that she had already paid premiums into the earlier policies, the complainant reportedly did not wish to let them lapse.
No records to prove the complainant understood recommendations
“On the Licensee’s recommendation, she withdrew from her mutual funds for Policy 6’s first year premium and continued to pay policies 2 and 3 until the surrender charges expired in 2015,” the ICoBC says in its decision documents. Documents say Hinkkala had no records to prove or demonstrate that the complainant understood his recommendations.
After the final two polices were purchased, documents say the complainant continually contacted Hinkkala about her investments, met with the advisor on multiple occasions and exchanged numerous text messages. In August 2015, he advised the client by email that he could not give her any further time and that he would be happy to suggest another advisor for her if she wished. The complainant contacted the ICoBC a few months later.
“Despite the major differences in submissions as to the complainant’s comprehension and knowledge of insurance products, council does not agree with the licensee’s assertion that the products he recommended were appropriate. Rather, council found that, in fact, the products were grossly unsuitable considering her financial circumstances and needs. Council specifically found that (the amount) of insurance for a person with an income such as the complainant’s is inappropriate.” Council further found that the coverage taken out for the each of the complainant’s two children was also excessive. “As a result of the licensee’s recommendations to the complainant, a disproportionate amount of the complainant’s resources is tied up in insurance products.”
Under the intended decision, the policy lapsed several times due to non-payment has assessed a fine of $2,500 and investigation costs of $2,325. It also imposed conditions on Hinkkala’s life agent’s license, requiring the agent be supervised for two years and requiring him to complete an ethics course approved by the ICoBC within 90 days of the council’s order.