The Mortgage Protection Plan of two industry giants has led to a civil suit.
Advisors may know that mortgage insurance is a substandard product, but the companies hawking it tried to use deceptive marketing materials to hide it, leading to a law suit.
This is one of the claims in a civil suit filed in February 2013 in the Supreme Court of British Columbia against Manulife, Benesure, the Manufacturers and five other defendants regarding their group Mortgage Protection Plan.
Mike Farnworth, the NDP’s critic for public safety and the solicitor general, who raised questions about fines against the three companies that were not made public, said the plaintiffs, Francoise Leonard and Leanne Ranniger, are seeking to have the case certified as a class action.
Among other things, the suit alleges that "for the [Mortgage Protection Plan] product, Manulife and the Benesure group employed a deceptive standard form document which was represented as being a document by which one could waive purchase of the products, but in fact is worded in such a way that made waiver of purchase impossible."
"As a result," it said, "class members were deceived into applying for the products."
The claim names the Manufacturers Life Insurance Company, Manulife Financial Corporation, Benesure Canada Inc., Broker Support Centre Inc., Credit Security Insurance Agency, Tacamor Holdings Inc., Davis+Henderson Limited Partnership and John F. Lorriman.
The suit also challenges the parameters of the coverage, with Leonard claiming the Mortgage Protection Plan insurance policy was very narrow, covering only a death caused by an accident, but not a death caused by sickness, illness or disease.
The notice summarizes the defendants' behaviour as including "the deceptive drafting and dissemination of the [Mortgage Protection Plan] waiver, knowingly setting up and structuring an insurance business designed to circumvent government regulation, obtaining private information they knew they were not entitled to possess, and impersonating mortgage brokers."
None of the allegations have been proven in court.
"People who bought policies in good faith, and I think that's one of the issues that will be explored in the weeks ahead," Farnworth said. "When you buy a policy, you expect it to be sold according to the laws and regulations that exist here in British Columbia, and when that's not the case, that should be concerning to you."
This is one of the claims in a civil suit filed in February 2013 in the Supreme Court of British Columbia against Manulife, Benesure, the Manufacturers and five other defendants regarding their group Mortgage Protection Plan.
Mike Farnworth, the NDP’s critic for public safety and the solicitor general, who raised questions about fines against the three companies that were not made public, said the plaintiffs, Francoise Leonard and Leanne Ranniger, are seeking to have the case certified as a class action.
Among other things, the suit alleges that "for the [Mortgage Protection Plan] product, Manulife and the Benesure group employed a deceptive standard form document which was represented as being a document by which one could waive purchase of the products, but in fact is worded in such a way that made waiver of purchase impossible."
"As a result," it said, "class members were deceived into applying for the products."
The claim names the Manufacturers Life Insurance Company, Manulife Financial Corporation, Benesure Canada Inc., Broker Support Centre Inc., Credit Security Insurance Agency, Tacamor Holdings Inc., Davis+Henderson Limited Partnership and John F. Lorriman.
The suit also challenges the parameters of the coverage, with Leonard claiming the Mortgage Protection Plan insurance policy was very narrow, covering only a death caused by an accident, but not a death caused by sickness, illness or disease.
The notice summarizes the defendants' behaviour as including "the deceptive drafting and dissemination of the [Mortgage Protection Plan] waiver, knowingly setting up and structuring an insurance business designed to circumvent government regulation, obtaining private information they knew they were not entitled to possess, and impersonating mortgage brokers."
None of the allegations have been proven in court.
"People who bought policies in good faith, and I think that's one of the issues that will be explored in the weeks ahead," Farnworth said. "When you buy a policy, you expect it to be sold according to the laws and regulations that exist here in British Columbia, and when that's not the case, that should be concerning to you."
