WASHINGTON - A number of banking trade groups has asked the federal appeals court in Kentucky to let stand a December ruling allowing Owensboro National Bank to sell insurance.

Industry lawyer David W. Roderer, writing for 10 banking and thrift groups, said in a brief Tuesday that the Sixth U.S. Circuit Court of Appeals should reject a request by Kentucky officials and the insurance industry for a rehearing before the entire court.

A three-judge panel, in a two-to-one split, ruled late last year that states cannot prevent national banks from exercising their authority under the National Bank Act to sell insurance in towns with fewer than 5,000 residents.

Since that decision, the 11th Circuit appellate court in Florida has drawn the opposite conclusion, ruling that a federal insurance law, the McCarran-Ferguson Act, permits states to regulate, and thus ban, bank insurance sales.

Fee income from insurance sales has become increasingly important to banks, although exact figures are not available.

The insurance industry, in a brief filed Jan. 26, asked the Sixth Circuit to reconsider its ruling, especially in light of the 11th Circuit decision.

Ann M. Kappler, a partner at Jenner & Block who represents several insurance groups, wrote that the Sixth Circuit erred early in its analysis when it declared that Kentucky's law improperly regulated a national bank.

Ms. Kappler wrote that the judges should have agreed with other federal appeals courts, which have said that similar laws regulate insurance, and not banking, operations.

Ms. Kappler also wrote that the McCarran-Ferguson Act clearly gives states the right to regulate bank insurance sales, regardless of what the National Bank Act says.

The American Bankers Association, the Consumer Bankers Association, the Association of Banks in Insurance, and seven other industry groups urged the court to uphold its earlier decision and reject the rehearing request.

First, they said the Kentucky law clearly attempts to regulate banking.

Second, they said even if the law regulates insurance, it still must be struck down because Congress exempted from the McCarran-Ferguson Act federal laws that specifically relate to insurance. The National Bank Act, which deals with insurance, falls within the exemption, wrote Mr. Roderer, a partner at Winston & Strawn.

Finally, the trade associations said the Supreme Court ruled earlier this year in NationsBank v. Valic that it is up to Congress and the Comptroller of the Currency to determine what powers national banks can exercise.

A decision is expected within a few weeks.

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