Government Bans Banks from Selling Insurance Online

The Canadian government has banned banks from selling insurance through their corporate websites.

Reuters has reported that the government has committed to keeping banking and insurance to distinct realms of financial planning by deeming life, property and casualty insurance illegal for banks to sell on the web. Instead, they can link to subsidiaries that deal in these unauthorized products.

"These measures were made necessary by the evolving use of technology by banks," said Finance Minister Jim Flaherty in a statement.

The ban comes just a year after the Office of the Superintendent for Financial Institutions said that "a bank website is not a bank branch" and ruled that banks could go ahead and sell insurance on their websites.

Under the new law banks will still be allowed to sell authorized insurance products such as travel and credit insurance, but will not be able to expand beyond those, as they had originally planned.

Independent brokers like LSM will still be there for your insurance needs, so if you need a hand call us at 1-866-899-4849, or visit our Instant Quote Page.

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