Federal restrictions on banks selling property and casualty insurance are up for review again in 2019 but a politician told brokers Tuesday he does not foresee many changes affecting insurance.
“I think we need to ensure that we have a healthy competitive marketplace for insurance at the point of origination of insurance,” Francesco Sorbara, MP for Vaughan-Woodbridge, told Insurance Brokers of Toronto Region members Tuesday during the IBTR breakfast.
Currently under the Bank Act, Canadian banks may sell home and auto insurance through subsidiaries, but they cannot provide access from their web pages to other web pages where non-authorized forms of insurance are sold.
This version of the federal Bank Act has a five-year sunset clause, which was extended in 2016 to March 29, 2019.
“I don’t foresee a lot of changes with regards to insurance,” Sorbara said Tuesday of the Bank Act review during the IBTR breakfast, held in Markham. “I heard the issues from the industry associations.”
Brokers want to let consumers make informed decisions on coverage, price and carrier without feeling any pressure to take the bank’s offer of insurance while negotiating a mortgage or a loan, said Greg Robertson, president of R. Robertson Insurance Brokers Ltd., on Tuesday during a phone interview with Canadian Underwriter.
“If there is any kind of subtle pressure to place insurance when you are applying for either a mortgage or if it’s commercial lending as well – that is not appropriate,” said Philomena Comerford, president and CEO of Toronto-based Baird MacGregor Insurance Brokers LP.
“Not everyone has the financial literacy to be buying coverage without advice especially if you are into complex commercial risks,” Comerford added in a phone interview.
Robertson hopes “the government will still stay true to the stance that they have had for many, many years, which is we do not want to have insurance sales in the branches and we don’t want to allow the branches to discuss it or solicit it.”
The Toronto Dominion Bank is the only Big 6 Canadian bank that underwrites home and auto insurance, through Meloche Monnex Inc. Aviva Canada completed its acquisition of RBC General Insurance Company in 2016.
The Canadian Imperial Bank of Commerce and the Bank of Nova Scotia sell home and auto insurance underwritten by subsidiaries of Desjardins Group. The National Bank of Canada used to be part-owner of a joint venture with Intact Financial Corp., but Intact in 2016 bought back from National Bank the shares that it did not already own of InnovAssur assurances générales inc.