National Bank president says banks need more powers to sell insurance

National Bank of Canadas outgoing president and CEO, Ral Raymond, indicated in a Mar. 7, 2007 speech to shareholders that the banks have clearly not given up advocating for changes in the Bank Act respecting insurance.
Revisions to the Bank Act, anticipated to be passed in April 2007, currently do not include provisions that would allow banks to retail or to promote information about insurance products in their retail branches. Raymond said to shareholders at the banks annual general meeting that this situation should change.
In his speech, Raymond said the banking industrys contribution to the economy must grow. He said he saw no reason why Canadian banks should be prevented from competing fully with insurers.
And yet, Raymond said in his speech, banks are still not permitted to make full use of their expertise in designing and distributing insurance products, even though allowing them to do so would result in better access, reduced costs and continuous innovation.
Canadas brokers have publicly argued against this notion, saying the banks argument in favour of more competition in the insurance market is really just a thinly-disguised power play for increased control over the insurance market.
Thus far, brokers arguments have held sway with Prime Minister Stephen Harper. At the 2006 annual convention of the Insurance Brokers Association of Ontario in Niagara Falls, Harper reaffirmed his partys earlier commitment not to change the Bank Act to allow banks to retail or provide information about insurance in local bank branches.