By NEIL HARTNELL Tribune Business Editor BAHAMAS First yesterday said it would be "quite aggressive in pursuing" complaints that Scotiabank (Bahamas) was directly contacting its mortgage clients and urging them to switch to the bank's group homeowners insurance coverage, adding that "representations" had already been made to industry regulators. Patrick Ward, the general insurance carrier's president and chief executive, told Tribune Business that reports from its agents and brokers suggested there was "increasingly aggressive activity" designed to encourage Scotiabank (Bahamas) mortgage clients to switch from their existing underwriter to the bank's group homeowners policy. While unable to say whether this was being driven by the bank, or its policy's broker and underwriter, J. S. Johnson and Island Heritage, respectively, Mr Ward said the whole Bahamian general insurance industry "has a stake" in the issue and how it is resolved. Noting that complaints had already been made to the Insurance Commission of the Bahamas (ICB), Mr Ward said the sector regulator had promised to investigate the matter, indicating it shared the private sector's "concerns" on the matter. Meanwhile, one Bahamas-based insurance broker, Bruce Ferguson, head of Caves Village-based Professional Insurance Consultants (PIC), confirmed to Tribune Business that two of his Family Island-based clients had been contacted directly by "Scotiabank representatives" urging them to switch to the bank's group homeowners coverage, even though it knew their existing policies were covered. Kevin Teslyk, Scotiabank (Bahamas) managing director, was in a series of meetings yesterday, and could not be reached by Tribune Business for comment before last night's press deadline. However, a message relayed to this newspaper through a bank spokesperson said he was "surprised" to hear about complaints from Bahamian insurance agents and brokers, "as we have not, to his knowledge, received any communication from the Insurance Commission, nor the Brokers Association, about this matter. "He [Mr Teslyk] has committed to following up with the Commission on any concerns with a view to resolving the same as soon as possible." Scotiabank (Bahamas) started its group homeowners insurance policy to ensure that its estimated $1 billion mortgage portfolio, and its clients, were protected from being exposed to the risk of 100 per cent loss if the latter either failed to insure or underinsured their homes. If clients failed to renew by the due date, they are placed on the bank's group homeowners policy, which is administered by BISX-listed J. S. Johnson on behalf of Island Heritage, the underwriter. In a previous interview, Mr Teslyk said it would be too costly, time consuming and administratively difficult to pay premiums to multiple brokers on behalf of Scotiabank's mortgage clients. Among the insurance industry's main concerns over the Scotiabank (Bahamas) situation are that it is potentially anti-competitive and anti-consumer choice, squeezing out other Bahamian insurance brokers and carriers, and not letting homeowners choose who their homeowners underwriter should be. Scotiabank (Bahamas) is the only one of the three Canadian-owned banks based in this nation not to have an insurance agents/brokers licence, unlike FINCO and CIBC FirstCaribbean International Bank (Bahamas). It has long wanted to obtain one, but is understood to have repeatedly been blocked by sector regulators. As a result, recent developments relating to its group homeowners policy have raised concerns over whether Scotiabank (Bahamas), and its executives, are technically acting as insurance agents and brokers - especially if they are contacting clients directly and urging them to switch coverage, as is alleged. Bahamas First's Mr Ward told Tribune Business: "We have been approached in recent times by a number of agents and brokers raising the concerns to a higher level. "It seems there's been more aggressive activity in recent times, but it's difficult to tell if it's coming entirely from Scotiabank, or if it's supported by the broker and carrier as part of the overall package." Tribune Business understands that Bahamas First and Security & General are two carriers that have lost clients to Scotiabank (Bahamas) group homeowners' policy, but Terrance Rollins, the latter's general manager, did not return this newspaper's phone call seeking comment. "We are looking into this because there are a number of issues here," Mr Ward added. "There's a big issue in terms of market practices. It's traditionally been the domain of agents and brokers to be directly involved in soliciting and advising on general insurance policies, and there are there are elements to the scenario we have been advised of so far, that the bank and representatives of the bank are getting involved in areas that were the preserve of agents and brokers. "The second is that the element of choice is being harmed. While we do entirely understand the interest of the bank in ensuring the assets it has an interest are protected, it should be done in a way that provides choice for the client, so they can make a determination that it's in their best interests." He added: "The entire industry has a stake in this, and we will work in conjunction with industry partners to ensure marketplace practices are in line with the regulatory framework we have, and that it is being followed. "The concern here is that you everyone involved in the industry abiding by the rules of the game. That's what the concern is." Mr Ward said that "technically", neither Scotiabank (Bahamas) nor its officials should be having any discussions with members of the Bahamian public over their homeowners insurance choice. The Bahamas First chief admitted the carrier had "seen some loss of business" in Family Island locations, where agents and brokers may not have been "as proactive" as they should, but said the premium rates charged by Scotiabank's group policy were higher than the ones they had offered. "We intend to be quite aggressive in pursuing this," Mr Ward told Tribune Business. "There have been representations made to the Insurance Commission, and we know they've given an undertaking to look into it, because we believe they share some of the concerns of the industry." PIC's Mr Ferguson confirmed to this newspaper that he had submitted a written complaint to the regulator, after his brokerage had "two examples in a Family Island where clients were contacted directly after they had renewed already, and Scotiabank knew of the renewals", urging them to switch to the bank's group policy. "I find it extremely distressing that, bearing in mind for the last two years Scotiabank have been causing problems in the industry with what they have been doing, that they have ratcheted it up to another level by contacting clients directly on policies that have already been renewed, and they know have been renewed, trying to get them to switch," Mr Ferguson told Tribune Business. He alleged that the clients in question were both offered substantially lower premium rates, even though their existing policies both showed Scotiabank (Bahamas) as the loss payee. "Whether the Commission will do anything about it remains to be seen, and hopefully they will do something sooner rather than later," Mr Ferguson added.