The Office of the Comptroller of the Currency has determined that four provisions of a West Virginia law regulating bank insurance sales are preempted under the Gramm-Leach-Bliley Financial Modernization Act.
The action came in response to a request by the Charleston, W.V.-based West Virginia Bankers Association.
The OCC determined that the four provisions of the West Virginia law violate the standard that state laws may not “prevent or significantly interfere” with the ability of banks to conduct their insurance business by imposing additional and unnecessary expenses. The provisions:
1. Require banks to use separate employees for insurance sales.
2. Bar insurance solicitations to loan customers until the loan has been approved.
3. Restrict the sharing of information among bank affiliates in the course of a loan transaction or offer to sell insurance.
4. Require banks to physically separate banking activities from insurance activities.