By RCCAQ
2019: the review of the federal Bank Act is only two years away, but it would be a mistake not to focus our attention on it right now. In the world of politics, time flows in a dimension all its own, and even with bureaucratic delays or uncertainty surrounding the political agenda, 2019 is indeed fast approaching.
What better example of this is there than Bill 188? For two years now we have been working very hard on the proposed review and modernization of this provincial law. And even though we continue to make representations to push for the tabling of the Act, to date, we have no guarantee that this will happen.
What, then, turned the issue of the Bank Act review into a battle we need to prepare for right now? How is the struggle taking shape today? Overview on the occasion of the 2017 edition of Parliament Hill Day in Ottawa.
David versus Goliath
To properly understand what is at issue, it should be remembered that the Bank Act is a federal law that governs Canadian banks, allowing them to carry on certain types of business.
Overall, the Bank Act has very little effect on the insurance sector, but for brokerage, this effect is of vital importance. Without going into legal details, the issue can be summed up as follows: banks are allowed to own and operate an insurance company, but they can only do this outside of their banking operations (branches). The insurer must then be “separate and distinct” from the bank.
In this respect, the Desjardins Group, since it is not a bank, does not come under the federal legal framework, but is governed instead by an array of provincial laws, such as the Act respecting financial services cooperatives. Because of the loophole already created by Desjardins in Québec, the Bank Act becomes all the more critically important, since it is the last bastion to protect insurance brokerage from being swallowed up by the banking sector.
This is what the battle is all about: on one side the powerful bank lobby, which wants to integrate the sale of damage insurance products into already well established infrastructures, and on the other side, insurance brokers acting on behalf of consumers, who believe that they are better protected when the risk of coercion or influence is averted by the law at the time a bank loan is granted.
The battle is on a large scale. And since the Act is subject to the review clause, every time it is reopened, the sustainability of brokerage and consumer protection are at stake. Lowering our guard is therefore not an option. Once the battle is lost, there can be no turning back.
Meeting at the top … of the Hill
Faced with the prospect of preparing for a tough uphill battle, action is being taken right now.
How? By making MPs aware of the consequences that a change in the law would have for their electors. MPs, who form a bridge between the consumer and the political system, must first be convinced of the merits of the part of the Act that we are defending. Furthermore, this step is also particularly important at a time when the federal government came to power only very recently and many of the MPS are recently elected (all parties combined). One essential step therefore involves explaining and arguing our point of view, which cannot be taken lightly or delayed.
To make sure that our message gets across, the Insurance Brokers Association of Canada (IBAC) organizes a day every year when brokers from all over the country besiege Parliament Hill in Ottawa to meet MPs. Naturally, the RCCAQ plays an active part in this exercise, dispatching a delegation of ten or so professionals and attending meetings scheduled with MPs. This is only one step, of course, but it is a crucially important one, and it will be followed by many others.
Would you like to contact us about the Bank Act? If you are well acquainted with your federal MP and you want to become involved in this fight, contact us right now. We will need every available resource to deal with this. Your future is at stake, now!
