How a merger mishap at a brokerage led to a $10K fine

Alteri Insurance Brokers in B.C. has been ordered to pay $10,000 and have a General 3 licensed broker in regular attendance at the brokerage for the next two years, after a merger and acquisition mishap led to a condo corporation being uninsured for several months.

Insurance Council of B.C. issued its order after the brokerage sent falsified insurer documents to the strata corporation and the property manager purporting to show the strata was insured when it, in fact, wasn’t. The issue came to a head when the strata corporation tried to make a claim on the policy during the time it had no coverage.

Ultimately, the condo’s claim was paid, due to the brokerage making an E&O claim. Council noted the brokerage is now under new ownership, which has communicated its intention to improve the culture of compliance and governance at the brokerage.

“Council concluded that the [brokerage] breached the principle of good faith,” the Insurance Council of B.C. ruled in a July 2025 decision. “The agency failed to disclose to the strata and the property manager that its policy had lapsed, and, to compound this, had issued falsified insurance documentation (including the invoice and payment agreement) over several months to mislead the strata that it had valid coverage.

“Council concluded that there was a lack of accountability at the agency.”

The missed renewal

The coverage gap emerged after Alteri acquired Marquis Underwriting Managers Ltd. on Feb. 1, 2021, council’s decision notes. “There had been hundreds of files involved in the acquisition, and the strata’s renewal was missed due to a data entry error that resulted in [Alteri’s] broker management system showing the policy as renewed when it was not,” as council’s decision explains.

The strata’s policy renewal date was April 4, 2021.

The strata corporation provided the province’s broker regulator with a document from the brokerage indicating coverage was in place from April 4, 2021, to April 4, 2022. “The document displays a policy number,” council observes, “however, there are no insurance companies named in the document.”

On June 4, 2021, the strata’s property manager began asking the brokerage to provide the policy documentation and invoice regarding the premium payment. It believed the policy had been renewed by its incumbent insurer (referred to in the council’s decision as “Insurer One”).

Meanwhile, between Feb. 10, 2021, and Oct. 28, 2021, Insurer One had been making multiple requests to the brokerage for underwriting details pertaining to the strata, council’s decision states.

On Aug. 10, 2021, the brokerage sent an invoice to the strata for $58,591. The brokerage followed up on Sept. 8 with a premium renewal payment agreement dated Aug. 18, 2021.

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The claim

The strata wished to make a water damage claim in September 2021, the brokerage’s client told council investigators. But the property manager reported having trouble opening the claim through Insurer One. In October 2021, Insurer One advised the brokerage it was no longer willing to provide coverage because of the water claim.

On Dec. 6, the strata received a document from the brokerage consisting of “declaration pages that appear to have been produced by another insurer,” council noted in its decision. “The policy number on this document is different from that on the Insurer One document; the coverage dates, however, are the same, and indicate that coverage is effective from April 4, 2021, to April 4, 2022.”

On Jan. 17, 2022, the new insurer, identified in council’s decision as “Insurer Two,” provided council with a copy of the authentic declaration pages.

“Insurer Two noted that the policy effective date is Nov. 26, 2021, not April 4, 2021, and also noted several inconsistencies in the formatting and information in the Insurer Two document [provided to the strata by the brokerage],” council’s decision reads.

As for the condo corporation’s claim, “the strata stated that the [brokerage] eventually informed them that there had been a problem with transferring their policy to the agency and that it would open a claim through their errors and omissions insurance (E&O) policy,” says council’s decision.

The aftermath

The strata corporation confirmed with the regulator they had received payment for the claim, and that they remained on good terms with the brokerage.

As for the brokerage, it told council it had introduced a new “three-tier” approach for policy renewals:

• the creation of a production report for the brokers’ transactions
• the creation of an expiry report to cross-reference any policies that might have been missed
• the review of billed accounts by the brokerage’s accounting department

One broker at the centre of the situation — Alteri’s sole director, major shareholder, and CEO at the time — said the brokerage had reprimanded him for his handling of situation. He told council his broker’s licence had been downgraded from a Level 3 (allowing brokerage oversight) to a Level 2 licence because of the incident.

A Level 2 broker is authorized to work independently, without being supervised by a principal broker, supervise Level 1 brokers, and handle technical and complex commercial insurance matters, according to the Registered Insurance Brokers of Ontario (RIBO).  

Insurer Two terminated its contract with the brokerage as a result of the falsified documents.

Council fined the brokerage $10,000 and now requires a Level 3 broker to be onsite for two years. It cites the breach of ethics caused by the lack of transparent communication with the client and falsified insurer documents.

“Council found that the [brokerage] breached the ‘Usual Practice: Dealing with Clients’ principles, as required by Section 7 of the Code of Conduct,” council found.

“The strata was not notified that its policy renewal had been missed and that it was uninsured. Council believed that a reasonable and prudent licensee would disclose the same with no delay.

“Council also noted that the falsification of the Insurer Two document was evidence that the agency prioritized its own interests over the strata’s interests in an attempt to show that there was valid coverage.”

David Gambrill

David has twice served as Canadian Underwriter’s senior editor, both from 2005 to 2012, and again from 2017 to the present.