CBA responds to IBAC’s Bank Act statement

Canada’s banking industry has issued a response to the Insurance Brokers Association of Canada (IBAC) recent press release, which stated that consumers benefit from choice and competition in the insurance marketplace.
The bank response stated that bankers “couldn’t agree more” but added that, “some of the restrictions that currently exist on how Canadians can access information about insurance are not in the best interest of consumers.”
According to the release banks, even though they have been players in Canada’s insurance business for more than a decade, cannot provide consumers with insurance brochures from a bank branch, because of Bank Act restrictions.
“The insurance brokers seem to be opposing Canadians’ right to access the information they need to make informed insurance decisions,” Caroline Hubberstey, director of public and community affairs with the Canadian Bankers Association (CBA), says. “You have to wonder whose best interest the brokers are trying to protect – consumers’, or their own?”
Hubberstey added that it is an absurd restriction that consumers cannot pick up an insurance brochure in a bank branch or have branch staff refer them to a qualified insurance professional outside of the branch. What exacerbates the CBA argument she says is that customers can get insurance product information at grocery stores, department stores and discount warehouses “like Costco.”
The CBA’s press release further builds its argument by identifying the banking industries recommendations for the Bank Act and the subsequent consumer benefits bank-centric insurance sales would bring.
The banking industry is recommending that the government take a few steps so that consumers will have more choices. The bankers say consumers should be able to:

* get insurance product information, like a brochure, at a bank branch;
* get a referral from bank branch personnel to a qualified insurance professional outside the branch; and
* give their bank permission to have insurance product information sent to them.

According to the statement consumers agree that they should have these options, according to a poll conducted by Strategic Counsel as commissioned by the CBA in spring 2005. The purpose of the poll – including 1,358 adult Canadians and considered accurate within +/- 3.1 percentage points was to identify consumers’ opinions on insurance information. They found:

* 91% of Canadians agree it is important to have as many choices as possible to get information about insurance products available;
* 85% of people support making insurance product information available in bank branches;
* 83% support allowing bank branch employees to provide customers with a referral to a qualified insurance professional outside the branch; and
* 77% say support for changes to regulations allowing banks to market their insurance products to clients based on client information, with client permission.

“The results of the poll clearly show that consumers want access to information so that they can decide what insurance products are best for them,” Hubberstey says. “The insurance brokers’ argument that a better-informed consumer will lead to job losses and less consumer choice is bewildering. Who can argue against a better informed consumer?”