A federal court has rejected the insurance industry's challenge to a government decision that let a bank operate insurance agencies indefinitely in Missouri cities.
The U.S. Court of Appeals for the District of Columbia ruled last Thursday that the case is moot because Magna Bank of St. Louis has agreed to sell the controversial insurance operations by Oct. 9, 2000, as part of its merger last year with Union Planters Bank of Memphis.
The judges also vacated a trial court ruling and the Comptroller of the Currency's 1995 decision letting Magna keep the agencies when it converted from a state to a national charter. By vacating both decisions, the court ruled in effect that they could not be cited as precedents in future lawsuits.
Both the OCC and the insurance industry applauded the appeals court ruling, which lawyers received Tuesday.
"We argued the case was moot," said Julie L. Williams, chief counsel at the Office of the Comptroller of the Currency. "This result is fine with us."
"Our objective in pursuing this case once Magna and Union Planters merged was to get rid of the administrative and court precedents," said Gary E. Hughes, vice president and general counsel of the American Council of Life Insurers. "This decision does precisely that."