- Consulting with Canadians -

Insurance Bureau of Canada (IBC) Submission in Response to Finance Canada's Large Bank Mergers in Canada:

January 29, 2004

Mr. Gerry Salembier
Director, Financial Institutions Division
Financial Sector Policy Branch
Department of Finance
L'Esplanade Laurier, 15^th Floor, East Tower
140 O'Connor Street
Ottawa, Ontario KIA 0G5

Dear Mr. Salembier,

This letter outlines the comments of Insurance Bureau of Canada (IBC) on Finance Canada's report «Response of the Government to Large Bank Mergers in Canada: Safeguarding the Public Interest for Canadians and Canadian Businesses».

IBC is the voice of the property and casualty (P&C) insurance industry in Canada. We represent over 220 private companies that insure homes, cars and businesses across Canada.

The concept of competition and choice in financial services has historically received support from Canadians. This principle was supported by the Task Force on the Future of the Canadian Financial Services Sector in September 1998 and endorsed by both the House of Commons Standing Committee on Finance and the Standing Committee on Banking, Trade and Commerce.

We support the focus of the government's response which recognizes the rapidly changing nature of the financial services industry in Canada and the importance of developing public policies that foster greater competition, while at the same time protecting the interests of consumers. We are also pleased that the government is respecting decisions taken during the latest round of reforms and maintaining the current rules governing bank powers in insurance as it considers the mergers issue.

The Canadian property and casualty insurance industry is the most competitive industry in the financial services sector. In our view, the government's priority should continue to focus on maintaining and enhancing the competition and choice available to Canadian consumers as they seek to satisfy not only their insurance needs, but their needs for other financial services as well.

We are pleased to note that the government outlines the need for a broad public interest review by the Minister of Finance of any merger proposal that goes beyond the role of OSFI and the Competition Bureau. There is a valid public interest component in how the financial services sector is organized and how it functions for individuals, businesses of all sizes and the overall economy.

Thank you for the opportunity to provide our comments. We look forward to further discussions with you on this issue.

Yours truly,

Stanley I. Griffin, M.A., CIP

cc: Suzanne Sabourin, Executive Director, Government Relations