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Finance Minister tells banks that Web sites will soon be treated the same as branches for purpose of selling insurance


October 7, 2009   by Canadian Underwriter


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The Insurance Brokers Association of Canada (IBAC) is applauding Minister of Finance Jim Flaherty for sending formal letters to the large Canadian banks and the Canadian Bankers Association, making it clear the government intends to adopt policy measures that would require bank Web sites to be subject to the insurance business regime that currently applies to branches.
“As you know, the business of insurance is not permitted in a bank branch, other than for some limited activities, as laid out in the Bank Act and supporting regulations,” Flaherty said in a letter to Dan Danyluk, CEO of IBAC.
“The Government of Canada intends, at the earliest opportunity, to adopt specific policy measures by adapting our policy to reflect technological advances. This means that Web sites will become subject to the same insurance business regime that currently applies to branches,” Flaherty continued.
“Insurance brokers from across the country applaud the government and Minister Flaherty for ensuring that rules governing bank branches will be the same as bank conduct on the Internet,” said Danyluk in a separate release.
IBAC’s policy stance is that consumers are extremely vulnerable at the point at which credit is granted. Flaherty’s actions “ensures that consumers are able to make a free choice when buying insurance products,” the association says.
“Today’s decision by the Minister of Finance is a victory for consumers,” said Danyluk. “We are pleased that Minister Flaherty listened to his caucus colleagues, the public, and made the right choice for Canadians.”
IBAC added that Flaherty’s policy direction enjoys broad multi-partisan support in the House of Commons. For example, Danyluk also applauded Bill C-457, An Act respecting the insurance business (banks and bank holding companies) regulation, by the Member of Parliament from Brossard-La Prairie in Quebec, Alexandra Mendes.


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