Thompson’s Daily Insurance News Service: Flaherty

April 28, 2010

Best to withdraw Canadian p&c ratings that rely solely on publicly available data: reflects increasing challenges facing the industry

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IBAC says recent comments by federal finance minister Flaherty show financial pillars separation a matter of principal
(Copyright Thompson’s World Insurance News Not to be redistributed by individual recipients)

The Insurance Brokers Association of Canada is taking recent comments from Finance Minister Jim Flaherty as evidence of the government’s commitment to clarifying the rules surrounding the separation of the country’s financial pillars.

“This appears to be an issue of principal for the minister,” association ceo Dan Danyluk told Thompson’s.

“It’s a re-commitment of his stand of last October.”

He said there is a sincere effort by government to make sure that the banks operate by the rules set down for them regarding the promotion of insurance products.

“What Mr. Flaherty said publicly is what he said privately to the brokers: that the banks ought not to try to do indirectly what one cannot do directly.

“This hasn’t changed from his position last year.”

Mr. Flaherty said that government would be making clear to the banks what they can do on their websites.

The ministry would be meeting with some of the bank executives within the next ten days or so.

Ottawa placed restrictions on banks marketing of insurance 18 years ago. The concern then was that the banks, which were becoming the dominant force in financial services, might have too much power over consumer choice.

 

April 27, 2010

Daily Insurance News Service

Saying he’s not the minister for banks, federal Finance Minister Jim Flaherty knows they are not happy with him over online insurance selling

It appears Canada’s finance minister is serious about calling the country’s banks to the carpet regarding online insurance marketing.

“They aren’t very happy with me about not letting them sell insurance in their bank branches Jim Flaherty told reporters in Washington, D.C.

“We’ve had the discussions but I’m going to have to make clear to them what they can do on their websites.

“I’ll be meeting with some of the bank executives within the next 10 days or so and that will be one of the subjects we’ll talk about.”

In October the government urged the banks to stop promoting insurance on the Internet.

Mr. Flaherty said if the banks didn’t change their websites voluntarily he’d make sure the rules are clear.

Mr. Flaherty added: “I don’t live in a world where I think the banks are that fond of me nor should they be.

“They’re in business. They’re in business to make a profit but they have a protected public position in Canada so they have to accept that government has a significant role to play and that role is on behalf of the Canadian people.

“I’m not the minister for the banks. I’m the minister of finance.”