Capital Briefs: Fla. Bank Allowed to Open Insurance Agency

Florida regulators gave Community National Bank of Sarasota County permission last week to open an insurance agency in Nokomis, a small unincorporated community near the bank's headquarters in Venice.

Community National is the bank that sparked the Office of the Comptroller of the Currency's controversial ruling giving national banks broad authority to base insurance operations in urban areas.

In a Feb. 27 letter to Florida officials, OCC Chief Counsel Julie L. Williams said bank insurance operations may be based in any so-called "census designated place" with fewer than 5,000 residents, not just in incorporated small towns.

Florida regulators initially balked at Community National's request because state law requires bank insurance offices to be based in "cities of 5,000 or less."

But prompted by the OCC's ruling, Florida Insurance Commissioner Bill Nelson approved the new agency on March 16. The bank's insurance agents, however, may not establish permanent offices outside of Nokomis, he said. Customers living in other communities may be solicited by direct mail or telephone. The OCC has suggested that national banks may locate agents outside of the small community, but it has never formally ruled on the matter.

Nokomis has 3,500 residents, and Venice has a population of 17,000.

Officials for the Independent Insurance Agents of America said Monday they are still considering whether to challenge the comptroller's decision in court. Insurance groups in Florida are not expected to challenge the state insurance commissioner's ruling.