D-day approaches on banks retailing insurance

This month federal Finance Minister Paul Martin will release his report outlining the proposed future of financial institutions in Canada. With brokers and insurers weary of banks being allowed to retail insurance out of their branches, the associations are standing by ready to release their responses to the public.

Insurance Bureau of Canada vice president of government relations Mark Yakabuski is confident the government, which has been silent of late, will maintain its support for the insurance industry. “People have been playing their cards fairly close to their vest. The IBC will respond quickly and clearly to the government’s paper just as we did when the MacKay task force report was released,” he says.

The MacKay Report advocated the banks be allowed to retail insurance from their branches. The government’s latest report is expected to dismiss the notion. Still up in the air though, according to the Insurance Brokers Association of Canada president-elect Jim Ball, is whether support for the insurance industry will be definitive or whether the bank retail question will linger. “We’re not sure if the report will prohibit banks from retailing insurance for a number of years or whether it will put the onus on the banks to prove consumers want them in insurance. Our lobbying efforts concluded on our May 3rd cross-country lobbying day. Now it is time for us to wait for the report.”