Banking and insurance split again after banks try web sales
Insurance brokers in Canada has won victory over banks banning them from selling insurance on their websites, just as banks are banned from selling insurance in branches, Reuters reports.
Canadian finance minister Jim Flaherty told Canada's Business News Network (BNN) that rule changes will come in with the next budget implementation bill in early 2010.
It will reverse a decision in favour of the banks earlier this year from Canada's financial regulator.
Virtual bank branches
"I've made it clear now that we will change the rules so that the marketing of insurance via web sites, virtual bank branches, will not be permitted," Flaherty said.
Canada's Bank Act bans banks selling insurance through branches but big banks have slowly expanded into the C$115bn domestic insurance market in a bid to increase earnings and market share.
Banks sell insurance on their websites, in stand-alone branches or through insurance subsidiaries, skirting government regulations meant to keep insurance and banking separate.
Regulator wrong
The Office of the Superintendent of Financial Institutions (OSFI), ruled that "a bank website is not a bank branch".
Flaherty said he disagreed with the ruling.
