Canada’s banks are asking the federal government for the right to use their extensive networks of branches to give consumers information on insurance products.

Current restrictions against in-branch insurance information are “anti-consumer and anti-competitive,” said Raymond Protti, president and CEO of the Canadian Bankers Association in a speech Wednesday to the Economic Club of Canada in Toronto.

The CBA says bank branches should be permitted to provide consumers with ready access to insurance information (such as brochures) and specific information tailored to individuals. As well, branch personnel should be able to refer consumers to insurance professionals and pass on client information, with the client’s permission, to insurers.

The insurance proposals are part a raft of recommendations the CBA submitted to the Minister of Finance June 1 in anticipation of the government’s 2006 financial services review. Other recommendations include establishing a national securities regulator, streamlining the regulatory approval regime, and introducing remaining elements to a holding company system.

The banks stopped short of asking Ottawa for the right to sell insurance at the branch level. Protti said that the CBA’s proposals reflect what the public wants and are not tied to the ever-present bank merger issue. A poll commissioned by the CBA indicates that 85% of Canadians support changing the current restrictions preventing banks from providing insurance information in branches.

Protti argued that as the banks’ parent financial groups already sell insurance, and that information about those products is available to consumers on-line and by phone, it makes sense that banks should be able to provide consumers with the same information at the retail level.

He pointed out that both Quebec and B.C. have adopted more “flexible approaches” to the issue. In both jurisdictions, customers can be referred, at the branch level, to outside insurance professionals.

During the 2001 financial service legislation review, Ottawa didn’t give banks the right to provide insurance information at the branch level because of concerns about consumer protection and competition. However, the CBA says the financial services industry is a much more competitive one than five years ago and the banks have adopted policies protecting privacy and preventing so-called coercive tied selling of insurance products at the retail level.