Angry at losing a deal? Don’t take it out on the client

Agreement failure and Business deal fail concept as two hands made of rope in a handshake on fire as a corporate relationship or business crisis and breaking a friendship symbol

Frustrated at losing a deal in a competitive marketplace? Don’t take it out on the client, B.C.’s broker regulator has warned.

A B.C. broker received a reprimand from the Insurance Council of B.C. for sending an angry letter to a client after the client rejected the broker’s quote for strata insurance.

The broker was also ordered to take rules and ethics courses for “sending inappropriate correspondence to a client that contained language contrary to the usual practice expected in the industry,” as the council ruled in a decision released in August.

“A client is entitled to cancel a policy and is under no obligation to let the [broker] or the [brokerage] match the quote they obtained from a new agency,” the Insurance Council of B.C. states in its decision. “Council noted there were other ways of addressing the situation rather than resorting to the coercive tone and inappropriate commentary within the letter.

“Although losing business after working to obtain that business is a difficult situation, it is not appropriate to take that frustration out on the client. There is no entitlement of the [broker] or [brokerage] to the client’s business.”

Evan Powroznik, a Level 3 broker with more than a decade of experience in the business, received a request for a strata insurance quote from a property management firm on Nov. 18, 2018. The firm was a new client for the brokerage and wanted a quote for coverage of two of their high rises. The firm’s existing insurance coverage was due to expire on Dec. 1, 2018.

Powroznick worked with his supervisor at the brokerage, identified only as “AS” in the council’s decision, to come up with a quote.

“According to both [Powroznik] and AS, after a lot of hard work, they managed to put together a quote and get the coverage in place in time to ensure that the strata remained covered. The annual premium quoted for the strata was $437,063,” the council’s Aug. 1 decision states.

Council noted that when the two brokers were working on the quote, “the marketplace for strata insurance was extremely distressed. It is probable that there was some difficulty in obtaining a quote.”

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Powroznik and AS reported they had to rely on their relationships with insurers to obtain the quote.

However, on Jan. 28, 2018, just under two weeks after Powroznik provided a summary of the insurance to the client, the property management firm requested cancellation of the policy effective Feb. 1, 2021. Powroznik asked the firm to provide him with a copy of the new quote the strata had received so that the brokerage would have a chance to match it. The firm said the alternate quote was for $115,000.

After the policy cancellation, Powroznik told council he was “emotional.” He felt he had worked hard to get the quote, and the underwriters he leaned on were upset about the cancellation of the deal. In this state of mind, he crafted a letter to the property management firm.

“In the letter, [Powroznik] stated that the cancellation of the strata’s insurance would cause the agency to incur ‘significant damage to our operations and reputation,’ and that the quotation and service had been provided ‘at your request in a very short time frame, at considerable expense and relationship duress,’” the council decision reads.

“[Powroznik] further stated: ‘If you proceed with this cancellation without giving us the opportunity to match an alternative quote that you have received, the intentional damage you have caused our business and reputation will be made public.’ He further wrote, ‘If investigation uncovers that existing insurers on your policy have quoted to subscribe on the replacement policy, this unethical and illegal action will also be made public and reported to the regulatory bodies in the governing jurisdictions, including names of participating persons for regulatory action.’”

Council’s decision states Powroznik admitted “he had not conducted research to confirm the statements’ legality or accuracy. [He] stated in part that he hoped the letter would save the business with the [client].”

Knowing he was in an emotional state, Powroznik sent a draft of the letter to AS, who said he could send the letter to the client as long as two other employees cleared it first. According to the council’s decision, one agent cited by AS “did not have the opportunity to review the letter before [Powroznik] sent it.” The other reviewed the letter and suggested changes that Powroznik had incorporated into the document.

Ultimately, council found “the [broker’s] letter appeared coercive as the content of the letter was intended to pressure the client to maintain the policy, especially by providing information that was inaccurate.”

Since the broker had an otherwise unblemished record and his “inappropriate” letter was the only offence in the matter, council levied only a reprimand against Powronzik, with no other penalty other than completion of rules and ethics courses.


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