WASHINGTON - Banking Committee Chairman Jim Leach recommended to House leaders that two controversial insurance amendments contained in regulatory relief legislation be voted on as an "all or nothing" package.
One measure would allow banks and insurance companies to affiliate in certain states, the other would restrict the Comptroller of the Currency's power to grant new national bank insurance powers.
Details about the Leach letter, reportedly sent to Speaker Newt Gingrich, were sketchy Friday, as it was being closely held by the House Banking Committee staff.
However, congressional sources said that the Iowa Republican wants the two provisions to be linked in such a manner that they are either approved or rejected as a package.
"It is not the best option for small business," said Robert A. Rusbuldt, vice president of federal affairs for the Independent Insurance Agents of America. "But it is one of many options that will be available to the Republican leadership when they sit down and decide how they want to proceed on the House floor."
The agents group, as well as the American Bankers Association, could face some tricky decisions if Rep. Leach's recommended pairing takes place. The agents support the restrictions on the Comptroller's office , but are vehemently opposed to allowing banks to affiliate with insurance companies.
The ABA, on the other hand, opposes the idea of hampering the comptroller's ability to expand national bank insurance powers, but likes the idea of allowing holding companies to own both banks and insurance firms.
One industry source said that House Rules Committee Chairman Gerald B.H. Solomon, R-N.Y., is "very skeptical about the Leach proposal."
