The Insurance Commission (IC) has warned that it will continue to prosecute complaints against erring insurance agents, especially those accused of misappropriation of money held in a fiduciary capacity, even if such complaints were subsequently withdrawn as a result of a compromise agreement.
Insurance Commissioner Emmanuel F. Dooc has issued Circular Letter 2015-45 expanding the jurisdiction of the IC on complaints filed against insurance agents subsequently withdrawn due to a settlement or compromise between the private complainant and the insurance agent.
The circular amends Circular Letter 17-2006 to provide that complaints against erring insurance agents may still be pursued by the IC despite any agreements to the contrary between the private complainant and the insurance agent in their compromise agreements.
“In the event that a complaint filed at the company level by a policy owner against an erring agent is terminated by virtue of a settlement/compromise between the policy owner and the agent, the settlement/compromise shall be without prejudice to: a. the right of the company to refer the matter to the Insurance Commission, through the Licensing Division, for appropriate action under this Circular; or b. the right of the Insurance Commission to assume jurisdiction over the complaint motu proprio,” the amendment said.
To enforce the amendment, Dooc reiterated the requirement for all insurance companies to mandatorily furnish the IC with a list of both active and inactive agents who may have been found guilty of, or have pending complaints filed against them either at the company level, or before any administrative body or court, for violations such willful violation of the Insurance Code, fraudulent practices, or misappropriation of money held in a fiduciary capacity.
Dooc said that the new circular was issued to maintain the integrity and trustworthiness of insurance intermediaries who are trusted by the insuring public to protect their interests, amidst the many cases against insurance agents that are withdrawn by the complainant as a result of settlement or compromise agreements.
Dooc justified the circular’s requirements to compel insurance companies to report these complaints, even though such had already been withdrawn, under the amended Insurance Code’s Section 307 which provides that “the Commissioner shall satisfy himself as to the competence and trustworthiness of the applicant and shall have the right to refuse to issue or renew and to suspend or revoke any such license in his discretion.”
Thus, even though the complaints against insurance agents have already been withdrawn as a result of compromise, the complaint must still be reported to the IC and will be considered in the renewal of the license of the insurance agent concerned.