Alberta court affirms appeal board ruling allowing mental health clinician to run insurance business

The Court of Queen’s Bench of Alberta (ABQB) has affirmed an appeal board decision directing a regulatory body to issue certificates of authority in favour of a mental health clinician seeking to conduct an insurance business in the province.

In Alberta Life Insurance Council v. Simpson and Insurance Councils Appeal Board of Alberta, 2022 ABQB 396, Savannah Simpson is a mental health clinician with the Northern Health Authority in Mackenzie, British Columbia. She applied to renew her certificates of authority with the appellant, Alberta Life Insurance Council, to allow her to conduct an insurance business in Alberta.

The appellant revoked Simpson’s application. It found that her job as a mental health clinician was contrary to s. 5(2) of the Insurance Agents and Adjusters Regulation, such that it placed her in a position to use coercion or undue influence to control, direct, or secure an insurance business and placed her in a conflict-of-interest position when acting as an insurance agent in Alberta.

Simpson appealed the appellant’s ruling with the respondent, the Insurance Councils Appeal Board of Alberta. In reversing the ruling, the respondent found that the regulation was inapplicable to Simpson’s occupation since she was employed in British Columbia. It also directed the appellant to issue certificates of authority to Simpson.

The appellant brought an appeal with the ABQB. It argued that the respondent incorrectly ruled that the regulation could not apply to an occupation outside Alberta in considering whether Simpson met the eligibility requirements for issuing a certificate of authority.

The ABQB upheld the respondent’s decision and confirmed issuing certificates of authority to Simpson.

According to ABQB, since the respondent concluded that it could not consider Simpson’s extra-provincial facts and circumstances, it simply reversed the appellant’s ruling.

“That was an error of law that must now be corrected,” Justice Michel Bourque wrote. “I agree that the respondent erred in law in holding that the appellant, in carrying out its regulatory function, cannot consider facts and evidence arising outside of Alberta.”

According to the ABQB, the Canadian case law establishes that the jurisdiction of a professional regulatory body over its members is a personal one, which can extend to a member’s facts and circumstances, including conduct, without territorial limitation.

“I agree with the appellant’s submission that all that is required to establish proper jurisdiction is that an individual is a member of the provincial professional regulatory body,” Justice Bourque wrote.

The respondent argued that the regulation could not apply to an occupation in British Columbia because the legislature only had the power to govern in its province. The ABQB disagreed.

In interpreting a regulatory instrument, the ABQB noted that both the appellant and respondent must apply the modern principles of statutory interpretation that the words of an enactment are to be read in their entire context and grammatical and ordinary sense, harmoniously with the scheme, object, and intention of the legislature.

“Regarding the regulatory scheme created under the Insurance Act and the regulation, I agree with Justice Malik’s assessment in Hinkkala that it relates to the licensing of insurance agents and is a form of public welfare legislation, intended to promote public safety and consumer protection,” Justice Bourque wrote.

The court ruled that while the respondent erred in its interpretive framework, it nevertheless arrived at the correct result in directing the appellant to issue certificates of authority to Simpson.

Based on the evidence, the court found that all of Simpson’s counselling clients reside in British Columbia, and she did not have any Alberta resident counselling clients. Moreover, the evidence supported the respondent’s finding that Simpson has always been “scrupulous” about not mixing her insurance services with her counselling occupation as it would lead to sanctions in both fields.

 “Simpson is not in a position to use coercion or undue influence in order to control, direct or secure insurance business in Alberta,” Justice Bourque wrote. “Nor is she engaged in another occupation or business that would place her in a conflict-of-interest position when acting as an insurance agent in Alberta.”