Canada Pressing Banks on Promoting Insurance on the Internet

Banking laws in Canada don't allow banks to sell insurance through their branches, and to get around those rules, banks have been going to the Internet to promote insurance products, something the Canadian Finance Minister Jim Flaherty is attempting to curtail.

Flaherty has been working with banks concerning eliminating the use of their company web sites as a marketing tool for insurance products.

In the latter part of 2009, Flaherty told banks he would be cracking down on those who continued to use their company web Sites to promote general insurance products. That even includes links on the site sending potential customers to a different website.

Evidently banks has asked Flaherty to go over their web sites in order to get feedback as to whether they're complying with the spirit and/or letter of the rules he has in mind.

Flaherty will be doing that and he said sometime over the next 10 days or so he'll get together with them and let them know where they stand in that regard.

"I'm going to have to make clear to them about what they can do on their websites,"said Flaherty.

"I think we can demarcate what is okay and what is not in line with that principle (of not selling insurance) at the meetings that are coming up. I think we can get there in a way that will be business-like, that they can live with."

The point of this exercise is to keep banking and insurance separate in Canada. There was no mention about other means banks are using to promote insurance, like separate insurance offices or subsidiaries they also use to sell insurance products.

After rightly resisting the proposed global bank tax, some have attempted to paint Flaherty as being too friendly with the banks, one reason it seems he is pushing hard in the insurance area.