RBC shared customer data, brokers allege
FINANCIAL SERVICES REPORTER
Canada's insurance brokers are asking regulators to look into the possibility that Royal Bank of Canada is sharing customer data with its insurance arm.
The move escalates the already heated battle between brokers and the banks, which are doing all they can to muscle further into the insurance business. RBC, the country's largest bank, says it is complying with regulations.
The complaint stems from a marketing letter that RBC Insurance sent to an individual in Alberta.
"As an RBC Royal Bank credit card client, you already have a relationship with RBC Royal Bank," the letter states. "Now you can trust RBC Insurance for your insurance needs."
As it turned out, this customer was a member of the Insurance Brokers Association of Canada.
Ottawa has rules designed to stop banks from marketing or selling insurance in their vast branch networks.
The rules were created partly out of concern that banks would have too much power over potential customers if they were able to tie the granting of credit or loans to buying insurance. The rules include restrictions on the flow of information between banks and their insurance arms.
A spokesperson for the bank said "RBC operates on the fundamental principle of regulatory compliance, which includes designing our work flows and processes to respect the Bank Act and privacy legislation, while at the same time delivering a superior client experience."
In a letter to the Office of the Superintendent of Financial Institutions, the chief executive of the brokers' association alleges that RBC has broken the rules by sharing this particular customer's information with RBC Insurance.
In response, the regulator sent an e-mail to the association to say it is looking into the matter.