Old National Bank in Evansville, Ind., may create an operating subsidiary to insure the business activities of the bank, its affiliates, and holding company, the Office of the Comptroller of the Currency has ruled.
The OCC's October decision has not been made public yet, but a copy was obtained by American Banker. It is the first time the agency has given a bank permission to underwrite its own risk. The ruling is expected to be made public this month.
Though banks are not allowed to underwrite insurance to third parties, they do manage the risks associated with the normal course of business, the OCC letter stated.
The Old National operating subsidiary will not be taking on any more risk than the bank and its affiliates already incur, the OCC said.