NU Online News Service, Nov. 14, 1:15 p.m. — Washington
Two insurance agent groups have filed a lawsuit against the Office of the Comptroller of the Currency seeking to nullify an OCC determination that four provisions of a West Virginia law regulating bank insurance activities should be preempted.
The Independent Insurance Agents of America and National Association of Professional Insurance Agents, both of Alexandria, Va., charge that the determination exceeds the statutory authority of the OCC.
In addition, the agent groups charge that the OCC, which based its determination on the Gramm-Leach-Bliley Financial Modernization Act, misinterpreted the law.
The lawsuit was filed today in the United States District Court for the District of Columbia.
Robert Rusbuldt, chief executive officer with IIAA, said the OCC determination violates not only the letter, but also the spirit of GLB.
“If left unchallenged, the OCC’s actions could lead to the creation of a dual regulatory system for insurance, a federal one for banks with less oversight and a state-based system for insurance agents,” he said.
Gary Eberhart, executive vice president of PIA, added that agents must challenge OCC justification for the preemption determination; namely, that compliance would impose costs on bank sales of insurance products.
“If left unchecked, this OCC preemption order could be applied to any insurance regulation that applies to banks,” he said.
Specifically, the OCC, in an opinion published in the Oct. 9 Federal Register, determined that four provisions of the West Virginia law either “prevent or significantly interfere” with bank insurance activities and are thus preempted under GLB.