Restricting online retailing by banks gets predictable reaction

The posting of federal regulations restricting online retailing of insurance by banks (Thompson’s daily news service, Feb. 14) drew swift and predictable reaction.

The national brokers’ group liked it. The bankers’ group didn’t.

“Our position has always been that consumers benefit when there is choice and competition in the insurance market and we do not believe that restrictions should be placed on that choice and competition,” said Canadian Bankers Association president and ceo Nancy Hughes Anthony in a prepared statement.

“We live in the Internet age where consumers are doing their research and shopping around online for a wide variety of products and services, including financial products.

Insurance Brokers Association of Canada ceo Dan Danyluk called the changes “sane and reasonable” and a natural extension of existing restrictions on insurance retailing in bank branches.

“And let’s face it, online (sales and promotion) really is another branch of the bank,” Mr. Danyluk told Thompson’s.

“It is an operation of the bank and recognizing that it should function as a branch makes good sense.”

He said the proposed regulations show that federal Finance Minister Jim Flaherty and his department are staying true to his promises on keeping a distance between banking and insurance.

“Even the big banks ought to have to follow rules.”