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A Canadian student travel company, along with its insurance underwriter, has been fined $75,000 after they were found to be unlicensed in B.C. following a huge number of complaints about refunds for school trips cancelled due to the pandemic.

WorldStrides Canada along with the Old Republic Insurance Company of Canada were fined $35,000 and $40,000 respectively for their actions regarding the sale of more than 1,000 travel insurance policies for high school students in B.C.

When the trips were cancelled due to the pandemic, both companies failed to issue refunds which led to a class-action lawsuit.

According to two separate Feb. 17 B.C. Financial Services Authority decisions, the lawsuit was settled out of court.

The decision says 309 trip cancellation claims from B.C. students were then refunded to the tune of $917,000.

According to the decision, the travel insurance policies were purchased by parents for their children’s secondary school trips from Explorica Canada, through a third-party distributor referred to as "TM."

The decision says Old Republic cancelled its dealings with TM in March 2021.

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According to the decision, two student travel companies, Explorica and Educatours Ltd, amalgamated as Worldstrides Canada in February 2020.

While Educatours had held a B.C. licence to sell insurance, that licence was cancelled when the firms merged. Explorica had never held a licence to sell insurance.

According to the decision, Old Republic became aware of unlicensed sales in March 2020.

"Old Republic... failed to take immediate steps to prevent further unlicensed sales, resulting in the sale of an additional 87 policies," the decision reads. "Old Republic accepted 952 insurance policy applications sold through unlicensed distributors, including Explorica and Worldstrides, over the course of at least a year."

The Financial Services Authority says the issue came about due to "weak oversight" and poor monitoring over third-party companies, along with a failure to follow guidelines.

"The dispute between insurer and intermediaries resulted in significant claims processing delays for policyholders, totalling $917,000," the decision says.

The decision says the Financial Services Authority became aware of the situation at the beginning of 2021 after it received complaints about delays in processing travel insurance claims for secondary school trips that were cancelled in March 2020, as a result of the COVID-19 pandemic.

"Due to the number of policies sold through unlicensed agents, the span of time over which the non-compliance took place, failure to follow... guidelines, and significant delays in the processing of claims that the risk to the public, and in order to achieve specific deterrence to Old Republic and adequate general deterrence to the industry, I find that an appropriate penalty for Old Republic’s contraventions of the requirements... is $40,000."

The Financial Services Authority fined Worldstrides Canada $35,000.

The maximum fine either company could have received is $50,000.

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