Jim Flaherty and Canadian banks are headed for a showdown, with banks continuing to skirt federal rules over selling insurance on their websites.
Speaking to reporters in Washington on the weekend, Flaherty said the issue, which first emerged in October, is “still around,” even though the Harper government is intent on stopping the practice. By selling insurance online, banks are violating rules that forbid big banks from selling insurance in their branches.
Flaherty and the Government of Canada plan to clarify what banks can do online and will be meeting with bank executives over the next couple weeks.
Not surprisingly, the Insurance Brokers Association of Canada supports further action that’ll protect Canadian consumers from predatory pressures when it comes to insurance.
CEO Dan Danyluk, in an October 2011 press release, said banks should adhere to Flaherty’s 2009 request that they stop indirectly selling or promoting insurance products, and called for strict rules to finally be put in place. As of March 1, 2012, Flaherty’s rules officially came into force, and will help separate the banking and insurance industries.
The IBAC, in a recent complaint to regulators, alleged RBC and Bank of Montreal are among the banks continuing to break the rules and coerce consumers.