A federal judge has ruled that Deposit Guaranty National Bank, Jackson, Miss., may sell insurance and annuities in Mississippi despite a state law prohibiting it.

U.S. District Judge Henry T. Wingate ruled that the National Bank Act, which lets national banks sell insurance in towns with populations of 5,000 or less, and lets them sell annuities anywhere, preempts a Mississippi law banning banks from the business.

But the Sept. 30 ruling did not determine whether state insurance regulators have the right to oversee Deposit Guaranty's insurance sales.

Judge Wingate's ruling was based largely on the Supreme Court's 1996 Barnett decision that the National Bank Act preempts state insurance laws. Deposit Guaranty sued state insurance commissioner George Dale in 1995 after he barred the bank from selling insurance and annuities in Mississippi.

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