Finance Minister Jim Flaherty said Wednesday he has written the banks telling them to stop marketing their insurance activities on the bank websites, adding that he intends to pass legislation to make the practice illegal in the future.

Currently banks can sell insurance through separate subsidiary companies, not from bank branches.

In a recent ruling, however, the Office of the Superintendent of Financial Institutions found that under existing law the policy separation did not extend to websites.

Outside the Commons late on Wednesday, Flaherty said in his view, it contravenes the policy intent.

The minister's action comes as Liberal MP Alexandra Mendes introduced a private members bill with the intent, she said, of leveling the playing field between Canada's large banks and independent insurance companies.

The insurance brokerage industry had complained to the federal government and lobbied MPs about the issue.

Mendes called current legislation outdated, noting that the law still refers to telecommunications and not the Internet.

Banks like Royal and TD are major insurance providers through subsidiary companies, RBC Insurance and TD Insurance.

But the banks have been pressing Ottawa for years hoping to get the right to sell personal insurance policies from their branches, saying that consumers would benefit from cheaper premiums for life, auto, home and other types of insurance.