The Insurance Council of British Columbia (ICoBC) has fined Ali Nezamkhah Ahadi $10,000, assessed costs in the amount of $7,625, ordered supervision for the veteran agent and ordered Ahadi to complete remedial coursework after the council fielded three separate client complaints alleging product suitability issues and forged signatures.
During the course of its investigation, the council also found that Ahadi had his mutual fund license suspended in Quebec for failing to meet the province’s continuing education requirements.
First licensed in 2015, the agent, who himself supervises 25 new life agents at any given time, was found to have provided misleading or at least incomplete information about Registered Education Savings Plans (RESPs) in order to sell life insurance to the first and second complainants in the case. “The licensee’s financial needs presentation appeared designed to emphasize flaws with RESPs as an option to make whole life policies seem more attractive,” the intended decision in the case states.
The first complainants, a married couple, had each purchased a whole life policy with their two children’s lives as the insured. The couple paid over $700 monthly in premiums for $310,000 in coverage on the life of their 15-year-old and $269,000 on the life of their nine-year-old. The couple was also persuaded to transfer the funds from their Tax-Free Savings Accounts (TFSAs) and their children’s RESPs into an investment with Fidelity Investments. The complainants alleged that the policies sold to them were unsuitable given their financial circumstances.
The couple were receiving Employment Insurance (EI) and were struggling with rent and living costs at the time they were sold the policies. Ahadi says he was never informed of the couple’s circumstances. The couple also alleged that Ahadi forged their initials on at least one document and had directed them to sign blank documents before they were filled out.
Ahadi claims the couple were motivated by animosity because they expected a commission for referring clients to him which they did not ultimately receive.
The second couple similarly purchased two whole life policies with their two young children as the lives insured. “Similar to the first complainants, the second complainants alleged that the policies sold to them were unsuitable given their financial circumstances and that a savings plan was what they had been seeking. The second complainants also alleged that the licensee forged their signatures on key policy documents.”
The second couple provided sufficient evidence to persuade the council that their business had likely been conducted virtually, while Ahadi says the couple signed the documents in person. Ahadi also says the couple is making the allegations of forgery to make their case against him stronger. “The licensee stated that he had a witness who saw them at the office and explained that the second complainants were likely making these allegations because it gave them the best chance of receiving money due to their complaint,” the intended decision continues.
The third complainant meanwhile invested $1.5-million in a segregated fund product after having sold his business. The complainant says he was interested in a product which had good returns and no risk. He was allegedly promised eight per cent returns. Ahadi says he understood the client wanted to withdraw eight per cent each year. Similar to the previous complainants, the third complainant also stated that he never received key documentation and that the initials on certain documents were not his.
During the committee meeting to review the complaints and his conduct, Ahadi acknowledged that there may have been a lack of documentation and record keeping on his part but stated that he does a lot of verbal communication with his clients that was not recorded. He also stated that he was unaware of the need to inform the council about the sanctions against him in another province. The intended decision notes that Ahadi was not forthright about having his Quebec registration suspended, even when asked direct questions by the council’s investigator.
In addition to the fine and costs, going forward Ahadi must be supervised for two years and must complete six remedial courses including three on ethics, the Government Benefit Plans course and the Challenge of Documenting Nothing course.