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Canadian Government Bans Banks From Selling Insurance On Their Web Sites

Canadian banks will no longer be allowed to sell insurance products on their Web sites. Canadian Finance Minister Jim Flaherty informed Canada's banking industry of...
October 13, 2009

Canadian banks will no longer be allowed to sell insurance products on their Web sites. Canadian Finance Minister Jim Flaherty informed Canada's banking industry of the decision. Already, banks in Canada are not allowed to sell insurance in their individual branches. A letter from Flaherty to banks and their industry groups obtained by BestWire says their Web sites "will be subject to the same insurance business regime that currently applies to branches."

"We think it's a great decision for our consumers of insurance," said Steve Masnyk, spokesman for the Insurance Brokers Association of Canada. "Banks have been using loopholes and gray areas of the regulation to push their products, despite the law being very, very clear. The law states explicitly and clearly that banks are not allowed to be in the insurance business. Period."

What It Means to Agents:  It is interesting to note that our neighbors to the north still separate banking and insurance. Their firewall between the two remains intact, while the United States long ago abandoned ours with the repeal of the Glass-Steagall Act and subsequent passage of the Gramm-Leach-Bliley Act.

Canadian Government to Banks: No Insurance Sales on Web (BestWire 10/8/09)