Magazine article American Banker

Insurance Drama Continues: First the Ruling, Now the Rules

Magazine article American Banker

Insurance Drama Continues: First the Ruling, Now the Rules

Article excerpt

Bankers' initial joy over the Supreme Court's decision in favor of nationwide insurance sales by banks is giving way to more practical concerns that their programs pass regulatory muster.

Many bankers are now reviewing a draft letter from the Office of the Comptroller of the Currency that lays out guidelines for national banks to sell insurance and annuities.

And for the most part, bankers seem pleased by what they see.

The letter reemphasizes existing bans against tying banking services to insurance sales; acknowledges states' authority in licensing and setting training requirements for bank-insurance employees; and describes generally how bank programs should be run.

For national banks already selling insurance, the guidance appears reassuring. And several executives said the OCC's advisory letter provides a ready roadmap for banks that want to enter the business.

"I don't think complying with the OCC advisory will pose significant burdens for anybody," said James T. McIntyre, general counsel to Association of Banks in Insurance. "Most banks would employ these practices anyway as a part of due diligence and protecting their reputation," he added.

But a few areas remain uncertain in the wake of the Supreme Court's decision barring states from blocking insurance sales by national banks in towns of 5,000. Bankers are eager for the OCC to clarify what exactly a bank must do within a town of 5,000 and what a bank insurance agency can do beyond the town's borders. …

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