TORONTO – The time has come to enhance consumers� ability to make informed choices in Canada�s insurance market. Canadians want and should have access to insurance information and referrals when and where they want it � it just makes sense. That�s the message that Raymond J. Protti, President and Chief Executive Officer of the Canadian Bankers Association (CBA), delivered today in a speech to the Economic Club of Toronto.
“Ninety per cent of Canadians agree that it is important to have as many choices as possible when it comes to information about the insurance products available, including in bank branches,� said Mr. Protti. �Consumers should be able to get the insurance information or referral they need when and where they want it. It�s time to make this happen.”
The CBA has made four recommendations to amend the Bank Act and its regulations � the federal government legislation that governs how banks operate in Canada � so that consumers are better able to shop the market and make the choices that work best for them:
Consumers should be able to have ready access to specific information in bank branches about the full range of insurance products relevant to their needs and circumstances;
Consumers should have the ability to obtain a referral from their bank branch to an insurance professional outside of the branch who could provide further advice and access to particular insurance products;
Consumers should have the ability to give their bank permission to provide them with insurance information tailored to their individual and family circumstances; and
Consumers should have the ability to give their bank permission to pass on relevant client information to an insurance professional to make it easier to obtain information and advice on insurance matters.
The current restrictions that forbid banks from providing brochures, information and referrals for insurance were left on the table following a 2001 package of consumer-oriented reforms to the Bank Act. The federal government chose to move cautiously at the time, requiring that a number of provisions be put in place before opening up the market, including protections against coercive tied selling, protection of consumer privacy, and a financial services marketplace that fostered increased competition and consumer choice.
All of those requirements have now been met through the establishment of federal privacy legislation, prohibitions against coercive tied selling, the creation of a dedicated consumer regulator in The Financial Consumer Agency of Canada, and the growth of a competitive marketplace, where three of Canada�s largest financial institutions are insurance companies.
Today’s speech coincides with the release of a poll commissioned by the CBA and conducted by The Strategic Counsel on consumer attitudes towards access to insurance information. Conducted in May 2005 and considered accurate within +/- 3.1 percentage points, 19 times out of 20, the poll of 1358 adult Canadians found that:
85 per cent of Canadians support changing the current regulations to allow banks to provide insurance information in bank branches,
83 per cent of Canadians support changing the current regulations so that customers could obtain a referral from branch staff to a qualified insurance professional, and
when asked for their reaction to the current restrictions, nearly three-quarters of Canadians believe that not having information available at bank branches just doesn�t make sense.
Banks are in the insurance business in Canada but, currently, are prohibited from providing information about some of their insurance products, such as home, life and auto insurance, to bank branch customers who request it. While information on such products is available through advertisements, by mail, on the phone or through bank financial groups� websites, out-dated legislation prevents bank branch staff from providing the same information at the local branch. This is confusing for customers.
Moreover, as Mr. Protti pointed out in his speech, customers can get information about insurance at grocery stores, department stores and discount warehouses, such as Costco. “This is exactly the kind of thing we think you should be able to get in a bank branch. Really, if you can pick up information about financial products at the place you buy frozen hamburgers or vegetables, isn�t it logical that you should be able to get the same information at the bank?”
“While laws are generally designed to protect the interests of citizens and consumers, sometimes they accomplish the opposite by limiting choice and restricting consumers� ability to make their own decisions,� he added. “It�s time to put consumers first, to stop restricting them from having the resources they need to make their own decisions. Canadians say it just makes sense. And, we agree.”
The results of The Strategic Counsel poll are available on the CBA website at www.cba.ca/insurance . The full text of Mr. Protti�s speech and the CBA�s submission on the Bank Act review can be found at www.cba.ca/bankact.
The Canadian Bankers Association is an industry association representing the domestic and foreign-chartered banks of Canada and their 239,000 employees.