A regulatory loophole that has enabled
Canadian banks to circumvent draconian restrictions on their
ability to sell insurance is about to be closed by Canada’s
minister of finance, Jim Flaherty.
Acting on a warning he issued in January this
year, Flaherty has announced plans to prohibit the promotion of
non-authorised insurance products on the web pages of Canadian
banks.
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Use of their websites by banks to promote their
insurance operations has enabled them to overcome to an extent a
regulation that limits them to sell non-authorised insurance
products only through specialist insurance branches separate from
those of their banking operations.
Non-authorised products include life, property
and casualty insurance.
Insurance products authorised to be sold
through bank branches are limited to credit and travel-related
insurance.
Under Flaherty’s proposal only the corporate
web page of a bank, where no financial products are promoted, will
be permitted to display links to insurance subsidiaries dealing in
non-authorised insurance.
