The federal government of Canada had passed the Bank Act in the 1990s banning banks from selling insurance from the branches
The government of Canada has asked all Canadian banks to stop selling insurance products on their respective websites – reported AHN.
The decision justifies that making insurance policies available on their portals was not consistent with Ottawa’s policy, that insurance activities must not be done in bank branches.
The government passed the Bank Act in the 1990s banning banks from selling insurance from the branches to protect the insurance industry from unfair competition.
Jim Flaherty, Finance Minister, clarified that several Canadian banks have been going around the regulation by offering the insurance products online and the regulation was passed before the online transactions were taking place.
The Canadian Bankers Association is against Mr. Flaherty’s new direction as it would limit consumer access to insurance products. According to a study by the Strategic Counsel cited by the CBA, Canadians actually benefit from the high degree of competition and choice in the financial services sector, quoted allheadlinenews.com.