Florida bankers this week won a preliminary victory in their fight to sell insurance.

Administrative Law Judge William F. Quattlebaum on Tuesday struck down several limits the Florida Department of Insurance had put on banks. Judge Quattlebaum said regulators overstepped their authority in May 1997 by placing more severe requirements on insurance agents affiliated with banks than on independent agents.

"The ruling should ultimately yield a more fair set of bank insurance sales regulations," said Jeff Grady, executive director of the Community Bankers of Florida.

Don Dowdell, the insurance department's deputy general counsel, predicted the agency would appeal the decision. "I think it's wrong," he said. "We attempted to set forth rules as required by the legislature."

Banking trade groups had challenged four of the agency's 14 rules, claiming the insurance department did not have authority to issue new consumer protection rules aimed only at banks.

Judge Quattlebaum agreed, ruling that the insurance department's authority is "limited to assuring that no insurance agency or agent is subject to more or less stringent regulation than another ... on the basis of the regulatory status of the entity that owns the agency."

The rules voided by Judge Quattlebaum include a provision requiring banks to disclose that personal data may be used for cross-marketing purposes each time a bank customer fills out an information forms. "We were concerned that banks would need to make disclosures on trivial transactions," Mr. Grady said.

Bankers also opposed rules forbidding institutions from making loan approvals contingent upon purchases of insurance and from engaging in insurance underwriting. "We argued these rules were redundant because these practices are already illegal under federal law," said J. Thomas Cardwell, counsel for the Florida Bankers Association and a partner in the Orlando law firm Akerman, Senterfitt & Eidson.

Finally, bankers opposed a rule requiring insurance sales offices to be physically separated from a branch's lending area.

Insurance industry officials said the decision would hurt consumers. "The rules struck a fair balance between allowing banks into the insurance business and protecting consumers from coercion," said David Turner, director of state government relations for the Independent Insurance Agents of America.

The insurance sales rules were issued last year to keep Florida- chartered banks on par with national banks after the Supreme Court's 1996 decision allowing national banks to sell insurance from communities with fewer than 5,000 residents. The state sales rules were applied to both state and national banks.

Florida has long been a battleground for disputes of state regulation of bank insurance sales. The Supreme Court's 1996 decision was instigated by the former Barnett Banks Inc. of Jacksonville, Fla., which sued the state insurance commissioner.

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