Finance Minister Jim FlahertyGraham Hughes
Federal Finance Minister Jim Flaherty plans changes to the law to curtail the way banks market insurance on their websites.
The law currently restricts banks from marketing most types of insurance in their branches. But the same restrictions have not applied to online banking.
The big banks have been pressing hard into the insurance business recently, and critics charge that they are making a mockery of the restrictions on selling insurance in their branches.
On Wednesday afternoon Quebec Liberal MP Alexandra Mendes put forward a private member's bill seeking to stop the banks from delving further into insurance. Private member's bills rarely become law, but Ms. Mendes sought to bring attention to the issue and press Mr. Flaherty to make changes to the law.
While the Conservatives campaigned on a promise to continue prohibiting banks from marketing insurance in their branches, the banks have been creatively forging ahead. For instance, Royal Bank of Canada and Bank of Nova Scotia have built insurance offices right next door to their branches.
One of the loudest voices in opposition to the trend comes from the insurance brokerage industry, which recently complained to the country's insurance regulator about the way banks were promoting insurance online. The regulator, the Office of the Superintendent of Financial Institutions, ruled that banks' websites are not equivalent to branches, and so marketing insurance on them was not prohibited.
"Since the early 90s we have had the separation of banks do banking in bank branches and don't do insurance work in bank branches. That has been affected technologically by the use of websites," Mr. Flaherty told reporters.
Mr. Flaherty wrote to the banks on Wednesday to tell them the policy will be extended to their websites.
"I asked the banks to quickly stop the practice so that they would be compliant with the government's policy intent," he said.
He intends to change the legislation in order to enforce his decision.