Canadian banks likely to continue selling home and auto insurance beyond 2019

Published: November 15, 2017

Updated: July 24, 2018

Author: Luke Jones

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One politician says there is unlikely to be a change to banks selling property and casualty insurance when federal restrictions are up for review in 2019. Francesco Sorbara, MP for Vaughan-Woodbridge offered the opinion at the IBTR breakfast attended by Insurance Brokers of Toronto Region members on Tuesday.

“I think we need to ensure that we have a healthy competitive marketplace for insurance at the point of origination of insurance,” Francesco Sorbara said.

The current Bank Act allows Canadian banks to sell auto and home insurance through subsidiary companies, although they cannot give direct links to those companies on their web pages. The act has a five-year sunset clause that passed in 2016, but an extension was granted until March 29, 2019.

“I don’t foresee a lot of changes with regards to insurance,” Sorbara said Tuesday. “I heard the issues from the industry associations.”

“If there is any kind of subtle pressure to place insurance when you are applying for either a mortgage or if it’s commercial lending as well – that is not appropriate,” said Philomena Comerford, president and CEO of Toronto-based Baird MacGregor Insurance Brokers LP in an interview with Canadian Underwriter.

“Not everyone has the financial literacy to be buying coverage without advice especially if you are into complex commercial risks,” Comerford added in a phone interview.