Brokers, are you looking to “keep things moving” at the office while on vacation?
Beware of ‘Frankensigning.’
That’s what it’s called when you copy client signatures from old policy documents and attach them to new, blank application forms. And then you use these pre-signed forms without clients’ consent. Or, a broker simply signs blank documents in advance, and leaves them with junior brokers during an absence from the office.
A B.C. brokerage supervisor learned this the hard way recently, according to a decision released Mar. 16 by the Insurance Council of B.C., the province’s broker regulator.
Christine Lynn Hewitt, a supervisor at her brokerage, was fined $3,000 for leaving pre-signed documents for her junior brokers to use while she was on vacation for several weeks in both December 2021 and January 2023.
One of her Level 1 brokers complained to the regulator that Hewitt instructed her “to copy signatures from existing client files, affix them to new application forms and use the forms without the clients’ consent,” the insurance council stated in its decision. “The complainant referred to this practice as ‘Frankensigning.’
“Council’s investigator was unable to find any documentation, beyond the complainant’s allegations, indicating that the licensee had instructed the complainant or was aware of the practice of affixing existing client signatures from old insurance forms to new ones.”
In an initial interview with council investigators, Hewitt said “she had no knowledge that client signatures had been copied and pasted and she denied instructing licensees to conduct themselves in this manner,” council’s decision reads.
Later, in a meeting with the council’s discipline committee, the broker “admitted that on one vacation in December 2021, she had left six pre-signed forms in the [brokerage] for convenience while she was on vacation, so that the forms could be signed if her electronic signature was not available or if no other insurance agents within other branches of the agency were available.”
It is not clear in the decision if the broker included her own signature on the pre-signed forms, or whether they were client signatures.
Hewitt told council she did this to “keep things moving…quotes needed to be done, clients needed to be emailed, called, confirmed” while she was away, as the council decision quotes her saying.
Council found Hewitt met the standard of supervision expected of managers while they were working remotely. She was available for calls daily during her vacation, and was answering emails from her Level 1 brokers.
But council found the practice of leaving blank, pre-signed application forms to be worthy of sanction.
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It found no evidence that clients had actually suffered harm. However, the potential for harm was real, council said. For example, in one instance the complainant alleged she was instructed to use a pre-signed form required by a client’s insurer.
“The insurer required a signed acknowledgment in writing from the clients stating that they were aware that any refund cheque that may be owed under the policy would be made payable to the owners of the strata plan,” council’s decision reads. “As the strata did not have its own bank account, this would pose an issue if the clients tried to cash a cheque made out to the strata.
“As such, the insurer required written acknowledgment that the clients were aware of this potential issue for the policy’s 2023-2024 term.”
Elsewhere in its decision, council noted Level 1 broker salespersons are not authorized to sign insurance contracts, and that all policies must be reviewed by an insurance agent.
“By using pre-signed forms, the insurer would believe that the [broker] had reviewed the risk and recommended the submission,” council ruled. “Council found this practice to be an egregious misrepresentation to the insurer and determined that this practice is unacceptable under any circumstances.”
Council ultimately ruled the broker “knew that leaving pre-signed forms for new insurance policies was wrong,” but disregarded her duties for the sake of convenience.
“Council did not understand why the licensee would leave pre-signed insurance forms, when other insurance agents in other branches could have reviewed the policies while the licensee was on vacation, or when she could have reviewed the policies herself when she was away.”
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