THE INSURANCE industry may be at risk if the federal government allows banks to share information with financial technology companies more freely, the ceo of the Canadian Association of Mutual Insurance Companies has warned.
Normand Lafrenière said he is worried that the government is moving too fast to facilitate a more technology-friendly financial sector. And CAMIC is urging the government to be more cautious in allowing information-sharing. “There is an advantage for a bank to pass information to a fintech, that can pass it to a (subsidiary) so the information can be passed on indirectly,” he said. “The prohibition of selling insurance products within banks could be circumvented by this, so we want to make sure that won’t happen.”
He said CAMIC lobbied the government before the budget announcement and during the review of the financial services framework.
But he said the government seems to have an appetite for rapid change. The 2018 budget said the Liberals intend to amend legislation to enhance the financial sector’s ability to work with financial technology companies.
“They seem to be taking these actions right away, before the deadline of the review,” Mr. Lafrenière said. “We are not necessarily against passing this information to fintech companies but we are saying that they should be regulated so that the information to be used by insurance companies would be protected.
“We don’t want them doing from the back door what they can’t do from the front door and want the government to be aware of this risk.”
He said there is still time to address this issue and CAMIC will continue its lobbying efforts.
It is also hoping to salvage the tax exemption for farmers and fishermen.
After the 2017 budget announced it would eliminate the exemption as of Jan. 1, 2019. CAMIC has met with the Atlantic caucus, the agricultural caucus and it hopes to meet soon with the insurance caucus.
“We still have some time and have a chance of succeeding,” Mr. Lafrenière said.
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