CRA accepts that commercial businesses can make GST-exempt arranging-for supplies of insurance as a sideline “incidental” activity
CRA refers to an “incidental seller” as “a person who assists the insurer in the issuance of insurance but whose principal business is normally carried on outside the insurance industry (such as retailers, automotive dealers, banks, travel agents)” and notes that an “incidental seller’s service supplied to the insurer would typically include promoting the insurance, assisting the incidental seller’s customer in understanding and obtaining the insurance from the insurer, and collecting the premium from the customer and sending it to the insurer.”
The CRA will apply principles from these decisions to an incidental seller’s supply of services of arranging for the supply of insurance to an insurer.
Where the essential character of the service for which an incidental seller earns its fees is the sale of insurance on behalf of the insurer to the customer, it will generally be considered an exempt supply of a financial service. In such circumstances, the supply by the incidental seller is arranging for the issuance of a financial instrument (such as, an insurance policy).
This is less grudging than the statement in Excise and GST/HST News - No. 109 that:
The CRA will only apply the Zomaron decision to supplies made by an ISO/MSP if the same fact situation exists.
Neal Armstrong. Summary of Excise and GST/HST News - No. 110 under the heading “Incidental sellers of insurance”, 8 December 2021 under ETA s. 123(1) – financial service – para. (l).