The insurance industry last week criticized the Office of the Comptroller of the Currency for allowing a national bank to own insurance agency offices in towns of more than 5,000 people.
"This is an unprecedented ruling," Ann M. Kappler, counsel to five insurance groups, wrote in a Feb. 13 letter to the agency. "It is a blatant attempt to avoid the limitations on insurance powers contained in federal banking law."
The OCC, in a Nov. 15 letter to Magna Corp. released to the public last month, allowed the Missouri banking company to keep its 33 insurance agency offices when it converted from a state to a federal charter.
The OCC based its decision on Section 35 of the National Bank Act, which gives the agency the power to let converting institutions retain "nonconforming assets." Ms. Kappler called the OCC's interpretation "gross perversion of congressional intent."