New Mexico bankers are seeking to rid themselves of a law that prohibits banks from selling annuities in their lobbies.
"We're trying to work something out. New Mexico is behind the times," said Barbara Dougherty. executive vice president of the New Mexico Bankers Association.
The efforts by the New Mexico bankers aren't unique. Banker's have waged lobbying campaigns in Texas, Connecticut, and several other states that bar annuities sales by banks.
Many States Are Restrictive
Twenty-one states have "very restrictive" laws against banks selling annuities, according to Ken Williams, vice president of marketing for the Association of Banks in Insurance, a Washington-based trade group.
The New Mexico legislature is unlikely to consider legislation on annuities until 1995. Meanwhile, industry executives have turned to regulators for relief.
At the request of the state bankers association, the New Mexico attorney general's recently issued an opinion on whether banks can sell fixed and variable annuities. The answer, however, was ambivalent.
Assistant attorney general Elizabeth Glenn wrote that state regulators could adopt rules giving state banks the same annuity-sales powers as national banks.
"Absent any other applicable statute, you could exercise your authority and permit state banks to engage in similar activities," Ms. Glenn wrote to Kenneth Carson, director of the state's financial institutions division.
Argument Is offered
However, the state's insurance code prohibits banks from "directly or indirectly" selling insurance products. The code also supports the position of the state insurance superintendent that it is reasonable to prohibit banks from selling annuities.
But Ms. Glenn maintains annuities are not insurance products because annuities aren't paid "in connection with ascertainable risk contingencies."
John Anderson, a lobbyist with the state bankers association, noted that the Office of the Comptroller of the Currency reached that very conclusion in 1990 when it authorized annuity sales for national banks.
Nevertheless, the uncertainty lingers. That has caused some frustration for First Security Corp., a Salt Lake City, Utah, banking company that plans a big acquisition in New Mexico.
Other Banks Find Ways
The bank is having difficulty deciding how to proceed with a planned investment-products program when it acquires First National Bank of Albuquerque, said Fletcher Howe, manager of First Security Investor Services.
Other banks are finding ways to work with the hand they have been dealt.
BankAmerica Corp. has leased space in one of its Albuquerque locations to an annuity salesperson. Boatmen's Bancshares, which acquired New Mexico's Sunwest Bancorp last year, has a similar arrangement.
"It would be nice if we could sell [annuities]. I feel we are missing an arrow in our quiver," said Mark Grieman, New Mexico sales manager for Boatmen's Investment Services Inc.