The Supreme Court's green light for national banks to sell insurance in small towns has sent states racing to adjust their own rules.

Because the court go-ahead for such sales also has prompted many banks to enter the insurance business, compliance officers are working overtime.

"Compliance officers have to have control," said Harald Dulberg, insurance compliance specialist with the Washington law firm Goodwin, Proctor & Hoar. "They should be part and parcel with the whole process of setting up the business, and they have to be knowledgable enough about the field to put their house in order."

At least eight states, including Texas and Florida, have changed their laws or regulations to permit banks to sell insurance. Every state also has its own consumer-protection and licensing laws. That means compliance officers must know, among other things, whether agents:

*Are required to be registered at the specific branch where they work.

*Can run more than one office.

*Must live in the state where they sell insurance.

Compliance officers also must know the procedures for documenting the name of the new insurance company, the agents working at each office, and where these filings must be sent.

On the federal level, the Office of the Comptroller of the Currency has released best-practices guidelines for insurance sales. The guidelines address anti-tying rules, the applicability of state laws, and management responsibility for insurance sales.

The five banking trade groups have approved similar guidelines drawn up by the Bankers Roundtable. That plan urges banks to license their insurance brokers, institute safeguards to protect confidential information, and display signs explaining that insurance is not covered by deposit insurance.

Trade group officials said they're doing their part to spread the word about these rules, though no widespread education program is planned. Karen Thomas, director of regulatory affairs at the Independent Bankers Association of America, said her group will soon release a pamphlet to members describing the guidelines. The other groups also plan to make copies of the guidelines available to their members.

Mr. Dulberg said compliance officers should be involved in most, if not all, corporate meetings on forming an insurance firm. They also should have close ties with the bank's audit, sales, and marketing departments to ensure rules are followed. This includes providing training, often with help from outside firms, to different areas of the bank on the intricacies of the state laws.

"This is going to be a big task," said Sam Cook, executive director of Community Bankers of Florida in Tallahassee. "There are just so many unknowns. Everyone's kind of grabbing around trying to find out what they can."

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