Mr. Speaker, I am pleased to speak to this first group of motions which have been moved by the official opposition. I would like to speak to each of them in order.
Motion No. 1 deals with financial planning and the suggestion that the act be amended to provide that where there is any provincial regulation on the provision of financial planning services, that provincial regulations shall override the Bank Act.
I want to clarify first of all that the amendment is proposed in respect of section 410(3) which deals only with the right to make regulations in respect of new in house services, for instance provision of information processing services and specialized financing services.
The right to make regulations about the provision of financial planning services by banks was introduced in the 1992 Bank Act and is not being changed by Bill C-82. That being said, I think what underlies this motion is the suggestion that the federal government, federal regulators in the Bank Act, have no place whatsoever in the area of financial planning and regulations with respect to financial planning.
It would simply be untenable if the Bank Act and other financial institutions legislation which regulate financially chartered institutions were not to be able to control the scope of powers of those institutions. It is simply unacceptable to carve out certain powers and say you cannot deal with those powers with respect to a federal institution. Clearly concomitant with the right to regulate certain institutions is to regulate the scope of the powers of those institutions.
With respect to the second motion with respect to privacy and the proposal from the official opposition that where there is any provincial regulation on privacy it shall override the Bank Act, I also understand that but I think consumers understand that they are better off that this area of privacy and consumer protection is a matter of shared jurisdiction between the provinces and the federal government when it comes to financial institutions and consumers are the better for it.
The last motion that was just brought forward by the official opposition deals with the transfer of blocks of business between insurance companies. The proposal has been made that the act be amended to permit the Minister of Finance to allow transfers of blocks of insurance business from federally regulated companies to provincially regulated companies.
Again, I understand the motivation for the recommendation of this change. Indeed it is something that officials are looking at. Today in question period one of the hon. members from the official opposition asked the Minister of Finance if he could proceed and make this change at this time. The Minister of Finance indicated he was open to considering such a change but that officials still had work to do.
We have several concerns before we would agree to such a change. Among them is the protection of policy holders and the safety, soundness and prudence of the regulatory system. It is a complex matter. Under current law transfers of blocks of insurance policies that are purchased by one company from another are not permitted when one of those companies, the seller, the vendor, is a federally regulated company and the purchaser, for instance, is a provincially regulated company. The reason for that relates, as I said, to the protection of customers and solvency of federally regulated companies. It is essential in a transfer situation that the same supervisor continue monitoring not only the transferring company but the acquiring company.
If financial difficulties were to arise the superintendent would have the information to take effective action by ordering both
companies to take appropriate measures. This may not be able to be done if the acquiring company is not under the supervision of the superintendent.
I want to focus on some of the problems. That is not to say they are insurmountable. Indeed, as I said a moment ago, federal officials are looking at this suggestion and shortly, if the questions that we have about safety, soundness and consumer protection can be addressed, I could foresee a change along these lines being made, but we are not there yet.
I just want to end by saying that Bill C-82, the financial services legislation, contains many important changes for the financial services sector and in particular the insurance sector. We have been responsive to many of the proposals that were brought to this government before the preparation of the white paper and the consultations that took place after the white paper before the finance committee reflected, and these responses are reflected in this bill.
To be fair, this request for the federal Minister of Finance to grant the discretion to allow these transfers between federally regulated and provincially regulated companies was not something that was brought forward by the industry during these consultations as a priority for the changes it wanted to see in this round. It has been brought to our attention at the 11th hour by certain insurers in the industry and it is a valid suggestion that we should look at, but we must take the time to look at it so we can assure ourselves that prudence and consumer protection are addressed. We are going to do that.