Background
ACEC-Ontario has been informed that the President of a Managing General Agent (MGA) operating as TruStar has allegedly been issuing fraudulent policies to certain TruStar policyholders. For more information, please read this LinkedIn post by the Registered Insurance Brokers of Ontario.
MGAs are entities that operate as insurance companies in that they issue policy documents and will have certain levels of delegated underwriting and claims settlement authority, but they are simply underwriting business on behalf of third-party insurance companies. It is these third-party insurers who are taking on the actual financial risk of paying claims. MGAs are a very common distribution model in Canada.
Recommendation
ACEC-Ontario member firms that have insurance with TruStar should check with their broker that it is a valid policy.
If a firm’s sub-consultant has insurance with TruStar, members may also want to seek assurance that the policy is valid and/or require them to buy insurance through another provider.
Should you have any questions, please do not hesitate to contact Doug DeRabbie, Director, Government and Stakeholder Relations at dderabbie@acecontario.ca.