A house bill passed by the Senate includes a section that could prevent originators of some government-backed reverse mortgages from selling insurance products.
Sen. Claire McCaskill, D-Mo., requested the addition of the provision, Section 2122, to the Senate version of H.R. 3221.
Members of the Senate voted to approve H.R. 3221 last week.
The insurance products covered by Section 2122 are life insurance, annuities and long-term care insurance.
The provision would require the banks and mortgage companies that originate reverse mortgages for seniors to hire third-party agents to sell insurance, or to use firewalls and other safeguards to insure that the reverse mortgage originators have no incentive to sell the seniors insurance.
The House version of H.R. 3221 has a different insurance provision, Section 219.
At this point, the House insurance provision appears to be far less restrictive and far more acceptable to the insurance industry than the Senate provision, according to Maurice Perkins, a vice president at the American Council of Life Insurers, Washington.
“We don’t oppose anti-tying provisions, meaning that sale of one product is tied to another,” Perkins said. “But what we have here is something entirely different. This is basically a blanket prohibition.”