The Canadian Bankers Association, on behalf of Canada’s banking industry, is asking the Alberta Court of Queen’s Bench to clarify that Alberta’s new insurance legislation does not apply to the banking industry, which is federally regulated.

The banking industry has turned to the courts for a decision following the proclamation on September 1, 2001 of new insurance legislation in Alberta.

Some of the provisions in the new legislation would extend to the banks’ promotion of insurance products, such as creditor insurance, long considered part of the business of banking.

The federal government has exclusive authority over banks and the business of banking under Canada’s constitution and as a result, the banking industry believes that these new laws are unnecessary for banks and go beyond the authority of the Alberta legislature.

Additionally, the CBA maintains that a national approach to the regulation of the financial services industry is necessary. The CBA says it is concerned that the existing system for regulation of the financial services industry is already excessively cumbersome. It says that if provinces were to duplicate federal regulations, it would add yet more costs to what is already a complicated and costly system.

The CBA is asking the courts to clarify if the provincial government has the authority to make laws on these federally-regulated matters. It says this action follows discussions with the Alberta Department of Finance over the last two- and-a-half years, in which the banking industry tried to resolve these issues.