Canada’s Finance Minister Jim Flaherty announced late last week that the Canadian government intends to introduce legislation that would prohibit banks from selling financial products that function like annuities.
“Since taking office, this government has taken steps to clarify the separation of banking and insurance activities,” said Flaherty in a statement released by the Department of Finance. “This will ensure that the business of insurance continues to be subject to the appropriate rules and regulations.”
The statement goes on to say that life annuity products fall under the same regulatory charter as insurance companies. Furthermore, under current Canadian law, banks are banned from promoting or selling life annuities, which are considered insurance products.