Have you overlooked these little tidbits:
1:There is nothing in his listing that mentions insurance.
2:He charged me $3.50 postage to mail 2 chips to Canada,which is at least about $2.00 too much(oh gee...that should/could include "insurance" right there)
3:The "offer" of insurance,if you notice is a standardized blurb at the bottom of his invoice.
4:He personally does not state that he requires insurance.If he was concerned about loss or even mailing to Canada,then perhaps he could have insisted,but no....shipping to Canada was going to be fine.
5:No mention of this insurance thing is brought up by him until I start to ask questions about the whereabouts of my chips. He is blaming the loss on me despite the fact that I have paid in time and am now the one out chips and money.

Please stop saying that I refused insurance! You only refuse something that is personally offered. If he says something like:"Rick,I will sell to you up there in Canada if you take insurance",and I turn that request down,then I have "refused" it.
ANY other member in this club would be bending over backwards to get this deal done so that everyone is happy.
I mean...c'mon now,he has been selling these same two chips for a while now right,so obviously it would be no sweat off of his nose to make this right as he obviously has others and I am sure that there would be no money lost there. He has simply refused to do so and that both puzzles me and irritates me to no end.
As a Canadian and club member selling to the US,insurance up to $100 is included in my postal charges. If an item never makes it to it's destination(never has, mind you),then I would feel totally obligated to make sure that my customer is happy. And that's what this is all about.Making your customers happy. The fact that I am a fellow club member in good standing is irrelevent to him. The loss of a couple of chips to make this right should not even be in his thought process

Let's put it this way John,put yourself in my place. Would you be ticked off the way this went down? Hmmmmm....

It has been suggested that I report him and proceed with a club ethics violation by several members. As I said before,I do not really wish to do this,but he is leaving me no choice.

I thought that this subject would die and I hope that it does soon.