Texas insurance regulators are trying to overturn a court decision barring them from regulating national bank annuity sales.
The case in the District Court for the Western District of Texas pitted the Texas Bankers Association and the Office of the Comptroller of the Currency against the state insurance department. The plaintiffs sued the insurance regulator for barring Texas banks from selling annuities anywhere except in small towns.
In the Aug. 7 decision Judge James R. Nowlin wrote that annuities are not insurance products, therefore state insurance rules do not apply to national banks selling the product.
"The order should be reconsidered, because it causes confusion regarding the extent of the commissioner's authority to regulate the sale and underwriting of annuities by banks," John M. Hohengarten, Texas assistant attorney general, wrote on behalf of the department of insurance.
In the Aug. 21 request for reconsideration Mr. Hohengarten argued that Judge Nowlin's decision could allow banks that sell annuities in Texas to ignore consumer protections mandated by the state insurance regulator.
-Dean Anason and Olaf de Senerpont Domis