Agent Groups Challenge OCC Stance in West Virginia
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 OCCs determination exceeds its statutory authority.
The Falls Church, Va.-based National Association of Insurance and Financial Advisors decided not to participate in a legal challenge to the OCCs determination.
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 on Nov. 13 in the United States District Court for the District of Columbia.
The OCC, in an opinion published in the Oct. 9, 2001, 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.
1. A requirement that financial institutions use separate employees for insurance sales;
2. A timing restriction that bars banks from soliciting loan customers for insurance until after the loan has been approved;
3. A restriction that bars bank affiliates from sharing information acquired in the course of a loan transaction or insurance solicitation; and
4. A requirement that insurance activities be physically separate from deposit-taking and loan activities.
Reproduced from National Underwriter Life & Health/Financial Services Edition, November 19, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.