If we were in a western movie, myself, the regulators and Manulife would have probably have a good old fashioned legal shootout. I will let you decide who is the good, the bad and the ugly…
This is a letter I sent to Mr. Blandy, manager of compliance at the Alberta Office of the Superintendant of insurance. First let’s state that when I audited the Direct Channel of Manulife and upon seeing how it was badly mismanaged; to such an extent that its operations were infractions against the Insurance Act of many provinces, I proposed a series of changes to solve this situation which are very similar to the MGA Draft Guidelines. Manulife was only interested in profits and simply refused stating that the infractions I had observed were the intended results that Manulife was seeking.
Finally, I am waiting to see if Mr. Blandy will ask me questions regarding this situation which is his duty. So far only silence has been his answer.
To: Regulation and Market Conduct Division
Office of the Superintendent of Insurance
Treasury Board and Finance
Mr. Blandy,
Thank you for your attention over this matter. I would also request that you forward this email and information to the other Superintendant of Insurance.
I am copying Paul Rooney CEO of Manulife, Lester Heldsinger, Brian Woolley and Guy Couture (All VP Manulife) on what I have to say in this email. Unlike them, when I make an accusation I don’t do it in secret and I don’t use lies. If I have accusations to make, I will do it in your face and it will be based on the truth.
In the MGA Draft Guidelines, FICOM stated:
FICOM recognizes that there are divergent views regarding the responsibility of reporting misconduct to regulators. Some industry stakeholders believe that insurers should report misconduct after it has been investigated while others believe that both MGAs and insurers are responsible to report any misconduct.
However, FICOM expects insurers to report unsuitable behavior once the insurer becomes aware of it. Regulators are responsible for public protection and need the earliest opportunity to investigate any potential misconduct.
I expect that FICOM position is shared by all the other Superintendant of Insurance.
Now, why don’t you ask Mr. Paul Rooney whether Manulife has reported all unsuitable behaviors of advisors to the regulators? If Mr. Rooney states that Manulife has met its responsibility in this regards, maybe you should remind him of the name of DiStasio. If Mr. Rooney is unaware of who DiStasio is, I am certain that Mr. Couture can help him with this.
Mr. DiStasio is an advisor who is believed to have counterfeited the signature of his clients at 2 occasions. This is not a fact however. It is a belief because Manulife did not report the infractions to the regulator. Instead Manulife cancelled Mr. DiStasio contract for cause to make it all go away. Why is it Manulife did not report DiStasio to the regulator? Well the reason was put in writing in an email by an employee of Manulife: here it is words for words: “PCC has requested that we terminate this advisor… We also don’t have enough on file to take Mr Frank Di Stasio to court. And we don’t want him to start causing some problems to Manulife.”
Finally Mr. Blandy, you should ask what happened to the assets under management of Mr. DiStasio under the supervision of Mr. Couture and how he allowed them to be transferred by DiStasio from Manulife to Industrial Alliance; illegal transactions where the clients had to pay surrender charges.
Is this the reason why Manulife tried to tell the AMF I had been the one supervising and responsible for DiStasio? However there is one little detail and problem with this accusation. The infractions of DiStasio happened prior my arrival to Manulife. They are not only liars but they are very bad liars…
So how many DiStasio exist in the distribution closets of Manulife? You as a regulator should request that Manulife give you the name of all the advisors having been investigated by the Producers Review Committee (PCC).
And these characters are the people who are supposed to supervise the MGAs. Well first they should supervise their own backyard because the Direct Channel of Manulife is just a compliance nightmare. If we take the MGA guidelines and we apply them to the Direct Channel it is a fail on every point. Funny as this was in my audit report 3 years ago. But then again the answer of Heldsinger and Woolly through a lawyer was that this was the intended result. Breaking the law was the intended result… and putting this in writing. I have the letter framed on my wall.
So should insurers be allowed to supervise MGAs? Well over my dead body.