Minister of Finance letters to associations regarding banking and insurance

2009FIN299856

Mr. Gerald M. Soloway
Chairman
Trust Companies Association of Canada
145 King Street West
Toronto, Ontario M5H 1J8

Dear Mr. Soloway:

As you know, the business of insurance is not permitted in the branch of a trust or loan company, other than for some limited activities, as laid out in the Trust and Loan Companies Act and supporting regulations. The regulations reflect the government’s policy intent that deposit-taking institutions should separate insurance business from deposit-taking business. It has come to my attention that some institutions are using their websites to undertake insurance business activities. The Government of Canada intends, at the earliest opportunity, to adopt specific policy measures by adapting our policy to reflect technological advances. This means that websites will become subject to the same insurance business regime that currently applies to branches.

This is an issue of importance to insurance brokers and agents in Canada. I have written to the Insurance Brokers Association of Canada in this regard. Therefore, in the meantime, I would expect your institutions to initiate steps quickly to adapt the business practices of institutions to meet this policy objective.

Sincerely,

James M. Flaherty

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2009FIN299856

Mr. Dan Danyluk
Chief Executive Officer
The Insurance Brokers Association of Canada
1230-155 University Avenue
Toronto, Ontario M5H 3B7

Dear Mr. Danyluk:

I understand that the advertisement and availability of insurance in bank branches is an important issue to insurance brokers and agents in Canada.

As you know, the business of insurance is not permitted in a bank branch, other than for some limited activities, as laid out in the Bank Act and supporting regulations. The regulations reflect the government’s policy intent that banks should separate insurance business from banking business. It has come to my attention that some banks are using their websites to undertake insurance business activities. The Government of Canada intends, at the earliest opportunity, to adopt specific policy measures by adapting our policy to reflect technological advances. This means that websites will become subject to the same insurance business regime that currently applies to branches.

Therefore, I have written to the large Canadian banks as well as the Canadian Bankers Association and the Trust Companies Association of Canada to communicate my intent in this regard and to ask them to initiate steps quickly to adapt their business practices to meet this policy objective.

Sincerely,

James M. Flaherty

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2009FIN299856

Ms. Nancy Hughes Anthony
President & C.E.O.
Canadian Bankers Association
Box 348
Commerce Court West
199 Bay Street, 30th Floor
Toronto, Ontario M5L 1G2

Dear Ms. Hughes Anthony:

As you know, the business of insurance is not permitted in a bank branch, other than for some limited activities, as laid out in the Bank Act and supporting regulations. The regulations reflect the government’s policy intent that banks should separate insurance business from banking business. It has come to my attention that some banks are using their websites to undertake insurance business activities. The Government of Canada intends, at the earliest opportunity, to adopt specific policy measures by adapting our policy to reflect technological advances. This means that websites will become subject to the same insurance business regime that currently applies to branches.

This is an issue of importance to insurance brokers and agents in Canada. I have written to the Insurance Brokers Association of Canada in this regard. Therefore, in the meantime, I would expect your institutions to initiate steps quickly to adapt the business practices of banks to meet this policy objective.

Sincerely,

James M. Flaherty