What is it? Canadian banks are still reeling from the shock of being told they will no longer be able to sell insurance online. The Canadian government, egged on by insurance brokers, plans to close a legal loophole that allows banks to do so. Under the Bank Act and supporting regulations, banks are not allowed to market or sell insurance through branches. They can own insurance companies, but they must keep their banking and insurance businesses - including branch networks - separate. However, banks have been promoting insurance on websites and channelling consumers to their insurance subsidiary websites to finalise sales. It is all perfectly legal, but the government says it is against the spirit of the rules.
James Flaherty, Canada's minister of finance, is therefore changing the rules. He has written to Nancy Hughes Anthony, president of the Canadian Bankers Association (CBA), and to the large Canadian banks reminding them that they are not allowed to sell insurance in a bank branch and telling them that the government intends to subject websites to the same restrictions as branches.
