Banks take long-term view on lobbying to sell, market insurance

Banks are predictably lobbying the federal government during the 2012 Bank Act review to lift restrictions preventing them from marketing and selling insurance products in their branches, but a recent Canadian Bankers Association (CBA) submission suggests banks see this more of a long-term than a short-term project.
In a submission to the federal government related to the current Bank Act review, The 2012 financial services legislative review: Ensuring Canada’s financial services regulatory system remains strong and effective, the CBA reiterates its position that the federal government should reduce or eliminate restrictions on the ability of banks to sell or promote insurance in their branches or on their Web sites.
But it also suggests banks now see this as more of a long-term project.
“Recognizing that the 2012 Review is intended to be a technical review where substantive changes to insurance rules are not contemplated, we nevertheless remain of the view that eliminating restrictions on competition and choice in financial products and services would benefit consumers,” the CBA submission paper says.
It then goes on to envision a world after the 2012 review in which the government does not end the restrictions.  “In the period following the 2012 review, we would look forward to having an opportunity to engage the government and other stakeholders in discussions on enhancing consumer choice by removing unnecessary restrictions on the sale and marketing of insurance products.”
In contrast, the CBA recommends the federal government immediately use the 2012 review to lift restrictions on banks from providing auto lease financing options to customers and auto dealers.
By statute, the current mandatory Bank Act review needs to be completed by no later than Apr. 20, 2012.