New York Explains Procedures For Insurance Sales by Banks

The New York State Banking Department issued an advisory letter Monday explaining how state-chartered institutions can sell insurance in the Empire State.

The six-page letter addresses two components to the application process. The first section explains how the department will review requests to sell insurance and what role the insurance commissioner will play. The second reviews the disclosure, consumer compliance, and staffing issues that a bank must address.

"The banking department seeks, by this letter, to identify several issues that banks and trust companies may wish to address in their applications to the banking board," New York Banking Superintendent Neil D. Levin said in a prepared statement. "They are offered as suggestions only. It is not mandatory that applications address every point herein."

Gov. George E. Pataki declared in June that state-chartered banks may sell insurance throughout New York. His decision came three months after the U.S. Supreme Court ruled that states cannot prevent national banks from selling insurance from small towns.

Gov. Pataki ordered the banking department to create guidelines explaining the procedure banks should use to take advantage of this new power.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER