Would Leach Bill Help Banks Sell Insurance? Tell Us Another

By White, Michael D. | American Banker, May 16, 1996 | Go to article overview

Would Leach Bill Help Banks Sell Insurance? Tell Us Another


White, Michael D., American Banker


House Banking Chairman Jim Leach's May 3 speech before the Chicago Federal Reserve Bank's conference on bank structure and competition may be the best piece of fiction since Walt Disney's "Pollyanna."

Mr. Leach asserts that his legislation "allows for insurance underwriting and agency affiliations," and that "regardless of what critics contend, the bill is a floor, not a ceiling."

If his latest version is a floor, that floor is a sub-basement whose ceiling is lower than the cellar door.

The Supreme Court's Barnett decision was a sweeping victory for banks. It changed Mr. Leach's strategy and that of insurance agents. Why else could the Independent Insurance Agents of America swallow the latest bill?

This bill would subject the industry to unending rounds of litigation in which the law would be tilted in favor of 50 separate insurance commissioners and agent trade associations.

The Barnett decision affirms the supremacy of section 92 of the National Bank Act over the McCarran Ferguson Act. It strikes down state anti affiliation statutes used to bar national banks from selling insurance, and establishes a far broader preemption analysis than the single line lifted from the court's decision and proclaimed as the "Barnett standard."

This alleged standard has been hoisted by bank insurance foes - and is a counterfeit. Bankers are not taken in by language and terms crafted by the very forces that would keep banks out of the insurance business in order to defend their special privileges and protected marketplace.

In fact, the Barnett decision aids state-chartered banks in their quest for insurance agency powers. The Leach legislation would not.

Because the Leach bill would undermine Barnett's supremacy, state and national banks in anti-affiliation states would lose the opportunity to set up and implement efficient and cost-effective insurance agency activities.

Bankers recognize the potential lost opportunities of supporting the Leach bill. They understand that only a 5% share of the life insurance market would earn them four to five times the revenue of their recent annuity sales.

The imprecise language in sections of the Leach bill is unacceptable as well. Instead of eliminating state anti-affiliation statutes that limit or impair national bank insurance activities, the bill stipulates that none of its provisions "may be construed as limiting or otherwise impairing the authority of any state to regulate the manner (including the manner of consumer protection) in which a national bank may provide insurance within the state."

This reference to the manner of selling insurance is far broader than the reference to the manner of selling annuities, which is limited to "consumer disclosure requirements or licensing requirements, procedures, and qualifications."

Mr. Leach has added a version of the Baker amendment that generally would make insurance companies owned by bank holding companies, the holding companies themselves, and their affiliated banks subject to state anti affiliation laws.

This would further balkanize the financial services industry and is inappropriate "functional regulation. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • A full archive of books and articles related to this one
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Would Leach Bill Help Banks Sell Insurance? Tell Us Another
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

    Already a member? Log in now.