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Insurance brokers vs. banks: insurers call foul on RBC and BMO

Canada’s biggest banks seem to be the subject of a strange amount of scandal of late. This month alone, a massive lawsuit was leveled against Royal Bank of Canada, ex-RBC advisers admitted to forging client signatures and a former Bank of Montreal adviser was banned from working in securities. Now, there’s a spat with Canadian insurance brokers, who lodged a complaint with the Office of the Superintendent of Financial Institutions (yes, it’s a real office) and alerted Finance Minister Jim Flaherty that RBC and BMO are openly disregarding rules against promoting insurance on their websites. (Under the Bank Act, banks are allowed to own separate insurance companies, but they’re prohibited from selling or marketing insurance.) Naturally, big insurance wants big banking as far away from its business as possible, and have lobbied hard to have rules in place to keep banking and insurance operations distinct. But large-scale financial institutions are still pushing hard into the territory—the insurance biz made up 10 per cent of RBC’s total profits in the three months ending January 31—and with big, big dollars at stake, we don’t expect them to stop. To the insurance brokers of Canada, we wish you luck. You’ll likely need it. [Globe and Mail]