Capital Briefs: Maryland: Banks Need Licenses to Sell Insurance

National and state-chartered banks must obtain state licenses before they can sell insurance in Maryland, according to a letter distributed Thursday by the state's banking and insurance departments.

The state requires licenses for both bank that sell insurance and any employee who does so. But it exempted tellers and clerical workers who do not receive bonuses for referring customers to agents.

The state did not specify whether banks must limit their insurance activities to small towns.

"It is up to the Comptroller of the Currency and the Commissioner of Financial Regulation to determine which branches and offices a given bank may use to sell insurance," wrote H. Robert Hergenroeder and Dwight K. Bartlett III, the respective banking and insurance commissioners.

The letter gives banks permission to sell insurance directly or through subsidiaries. It also said the Maryland Unfair Trade Practices Act applies to bank insurance sales.

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