UPDATE 1-Flaherty to meet Canada banks on insurance rules

* Flaherty to meet with bank executives in coming days

* Wants to stop insurance promotion on web sites
(Adds quote in final paragraph)

By Louise Egan

WASHINGTON, April 24 (BestGrowthStock) – Canadian Finance Minister
Jim Flaherty hopes to reach an agreement with banks within days
that would prohibit them from marketing insurance products on
their websites, he told reporters on Saturday.

Canada’s banking laws forbid banks selling insurance
through branches — the subject of a decades-long political
battle with insurance brokers — but top banks have slowly
expanded into the domestic insurance market by pushing sales on
the Internet, in stand-alone insurance offices or subsidiaries,
carefully skirting government rules meant to keep insurance and
banking separate.

Flaherty advised bankers last October he would crack down
on online promotion of general insurance products on
conventional banking web sites. For example, there should not
be links to general insurance sites on a bank site.
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On the sidelines of the IMF spring meetings in Washington
on Saturday he told reporters he would meet with bank
executives within the next 10 days, after analyzing bank web
sites at their request.

“I’m going to have to make clear to them about what they
can do on their websites,” he said.

“I think we can demarcate what is okay and what is not in
line with that principle (of not selling insurance) at the
meetings that are coming up. I think we can get there in a way
that will be business-like, that they can live with,” he said.

After fighting hard in Washington to persuade his
colleagues in the G20 developing and developed nations to
oppose a proposed global bank levy, Flaherty was asked if he
worried about appearing too cozy with the big banks, which also
oppose the tax.

“The banks aren’t very happy with me about not letting them
sell insurance in their bank branches,” he said.

“So I don’t live in a world where I think the banks are
that fond of me. Nor should they be.”
(Editing by Jeffrey Hodgson)

UPDATE 1-Flaherty to meet Canada banks on insurance rules