With federal financial services legislation up for renewal in spring 2007, a new C.D. Howe Institute study questions whether a prohibition should continue on banks selling most kinds of insurance in their branches.

In “Insurers and Banks: Levelling the Regulatory Playing Field,” author Mark Daniels examines the debate and asks: is it time to let more competition in the market?

A few years ago, the case for the prohibition was reasonable, he says. Much of it was centred on the need to create a level playing field for the providers of insurance services. Today, argues Daniels, “Broader access to a range of insurance products, supplied by an existing network of reliable, well-capitalized financial services providers is surely in the interest of consumers.”

An outstanding question: who would regulate sales of insurance by banks? Amending federal legislation to incorporate provincial regulation could offer part of the answer, says Daniels.