The Office of the Comptroller of the Currency is planning to sue Texas insurance regulators for barring banks from selling annuities.
The agency on Friday asked the U.S. District Court for the Western District of Texas to let it join the Texas Bankers Association in a suit filed Oct. 8. The court has not responded yet, but is expected let the OCC intervene.
The OCC and the trade group are accusing the Texas Department of Insurance of ignoring the so-called Valic decision. In that case, the Supreme Court said national banks may sell annuities without interference from state regulators.
Texas regulations allow only corporations or limited liability companies in the state to obtain insurance licenses, effectively banning banks from selling the products.
OCC Chief Counsel Julie L. Williams in an interview Wednesday said the rules in Texas are preempted by federal law.
Officials at the Texas Bankers Association are glad OCC wants to join the lawsuit. "Having federal regulators involved always helps to expedite the case," said John Heasley, general counsel for the Texas Bankers Association.
Meanwhile, Texas lawmakers are expected to introduce a bill soon after the legislative session begins Jan. 14 that would allow banks to sell insurance and annuities. However, the measure could still contain several restrictions on bank insurance sales.
State insurance agents are asking lawmakers to base the bill on model legislation circulated by the Independent Insurance Agents of America, Mr. Heasley said.
That model would bar most bank employees from selling insurance, and would prohibit banks from selling insurance to a customer while a loan application is pending. Another provision would require banks to physically separate insurance sales from deposit taking and lending operations.
