COVID canceled school trips overland travel company in hot water with BC finance authority | infonews


FILE PICTURE

Image credit: PEXELS


02 March 2022 – 06:30






A Canadian student travel agency, along with its insurer, has been fined $75,000 after being found unlicensed in British Columbia following a slew of complaints about refunds for canceled school trips due to the pandemic.

WorldStrides Canada and Old Republic Insurance Company of Canada were fined $35,000 and $40,000 respectively for their actions relating to the sale of more than 1,000 travel insurance policies for high school students in British Columbia

When trips were canceled due to the pandemic, the two companies failed to issue refunds, leading to a class action lawsuit.

According to two separate February 17 rulings from the British Columbia Financial Services Authority, the lawsuit was settled out of court.

The decision says 309 British Columbia student trip cancellation requests were later reimbursed to the tune of $917,000.

According to the decision, the travel insurance policies were purchased by parents for their children’s secondary school trips from Explorica Canada, through a third party distributor called “TM”.

The decision indicates that Old Republic terminated its relationship with TM in March 2021.


READ MORE: Unlicensed BC mortgage broker fined nearly $100,000

According to the ruling, two student travel companies, Explorica and Educatours Ltd, merged as Worldstrides Canada in February 2020.

While Educatours held a BC license to sell insurance, that license was revoked when the companies merged. Explorica had never held a license to sell insurance.

According to the ruling, Old Republic became aware of unlicensed sales in March 2020.

“Old Republic … did not take immediate action to prevent further unlicensed sales, which resulted in the sale of 87 additional fonts,” the ruling reads. “Old Republic has accepted 952 insurance policy applications sold through unlicensed distributors, including Explorica and Worldstrides, over the course of at least one year.”

The Financial Services Authority says the problem arose due to “weak oversight” and poor monitoring of third-party companies, as well as failure to follow guidelines.

“The dispute between the insurer and the intermediaries resulted in significant claims processing delays for policyholders, totaling $917,000,” the decision said.

The ruling says the Financial Services Authority became aware of the situation in early 2021 after receiving complaints about delays in processing travel insurance applications for secondary school trips which were canceled in March 2020, at the following the COVID-19 pandemic.

“Due to the number of policies sold through unlicensed agents, the length of time the non-compliance has occurred, failure to follow guidelines and significant delays in processing claims that present a risk to the public, and in order to achieve specific deterrence for Old Republic and adequate general deterrence for the industry, I conclude that an appropriate penalty for Old Republic’s breaches of requirements…is 40,000 $.”

The Financial Services Authority fined Worldstrides Canada $35,000.

The maximum fine either company could have received is $50,000.



To contact a reporter for this story, email Ben Bulmer or call (250) 309-5230 or email the editor. You can also submit photos, videos or news tips at the newsroom and be entered to win a monthly raffle.


We appreciate your comments and opinions on our stories, but play well. We will not censor or delete comments unless they contain off-topic statements or links, unnecessary vulgarity, false facts, spam or obviously fake profiles. If you have any concerns about what you see in the comments, email the editor in the link above.

News from © iNFOnews, 2022

infonews


Source link

Comments are closed.