OSFI rules a bank’s Web site is not a branch

The Office of the Superintendent of Financial Institutions (OSFI) has ruled that a bank’s Web site is not a branch, and it can therefore promote and sell insurance products or services on its Web site.
The Insurance Brokers Association of Canada had asked OSFI to clarify the issue of whether or not a bank that promoted and sold insurance through its Web site constituted a breach of the Bank Act.
The Bank Act specifies that a bank must sell insurance in a building that is separate and distinct from its bank branches.
In a ruling posted on June 30, OSFI says that the Bank Act’s definition of “branch” refer to physical premises.
“Furthermore, there are numerous provisions in that statute that specifically distinguish a Web site from being a branch,” the ruling says.
The definition of a “branch” under the act is as follows:
(a) in respect of a bank, means an agency, the head office or any other office of the bank, and;
(b) in respect of an authorized foreign bank, means an agency, the principal office or any other office of the authorized foreign bank in Canada at which is carried on the business in Canada of the authorized foreign bank.
“OSFI concluded that, for purposes of the regulations, a bank Web site is not a bank branch,” the ruling says. “As a result, a bank may, on its Web site, promote in Canada any insurance policies or any insurance companies, agents or brokers, subject to the conditions that the regulations impose on such promotion outside a branch.”