The Office of the Comptroller of the Currency issued long-awaited insurance sales guidelines Tuesday that make concessions to state insurance regulators.

"The OCC has carved out a role for state insurance supervisors," said Kathleen W. Collins, Washington counsel to the Financial Institutions Insurance Association. The guidelines, she said, are "an effort by the OCC to strike a balance between the interests of national banks and state insurance regulators."

OCC Chief Counsel Julie Williams said the agency worked closely with state insurance commissioners to address concerns raised by draft guidelines that were released for comment in June.

For example, the final guidelines include a longer list of the types of state insurance laws that are not preempted by the Supreme Court's Barnett decision. That ruling affirmed the OCC's contention that national banks may sell insurance from small towns.

These state laws include:

*Licensing requirements that establish the qualifications of insurance agents.

*Testing and continuing-education requirements for insurance agents.

*Licensing restrictions pertaining to agents wishing to sell various types of insurance.

*Market conduct and unfair trade practices prohibiting insurance agents from making deceptive statements.

This last point concerned some banking lawyers.

"Market conduct and unfair trade practices rules are two big handles that the states have used quite effectively to hamper bank insurance sales," said David Roderer, a partner at Winston and Strawn. "This is bound to be a battleground in the future."

Nevertheless, banking industry representatives applauded the advisory letter, saying that it will give bankers a much-needed road map regarding how to sell insurance.

"These guidelines provide much clarity," said Bankers Roundtable general counsel Richard Whiting.

The OCC also "beefed up" the language regarding anti-tying restrictions, Ms. Williams said. "The language has been strengthened to say that tying is overtly and implicitly illegal," she said.

The letter also notes that the use of customer information such as credit ratings in connection with insurance sales might be illegal.

The guidelines "ensure that (national banks) conduct insurance and annuities sales in a safe and sound manner that protects the interests of their customers," Comptroller Eugene A. Ludwig said in a statement.

The agency stressed that the guidelines are not to be used as an examination checklist for OCC supervisors. Instead, the OCC is developing instructions to guide examiners in the area of insurance and annuities sales.

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