Legislation allowing Indiana-chartered banks to sell life insurance is expected to be signed soon by Gov. Frank O'Bannon.
The measure, unanimously approved by the Indiana Senate Monday, would require Hoosier State banks to sell insurance in a part of the lobby physically separate from lending and deposit-taking operations. In addition, banks would be barred from using personal information from borrowers to solicit insurance without the customer's permission.
Despite these restrictions, banking industry representatives said the new law finally will put Indiana's 150 state-chartered banks on even footing with national banks, thrifts, and credit unions there.
"Every other financial institution in the state is allowed to sell life insurance except our state-chartered banks," Indiana Bankers Association lobbyist Kerry Spradlin said Wednesday. "We've been working at this for the past nine years, and it looks like we are finally going to break through."
Gov. O'Bannon is expected to sign the bill into law this month, Ms. Spradlin said.
The Indiana Senate approved four other banking bills on Monday. Those bills would: grant state-chartered banks the same powers as national banks; allow Indiana banks to operate foreign corporations as subsidiaries; drop a requirement that Indiana banks must surrender to the state deposit accounts abandoned for seven years; and streamline several sections of the Indiana banking code.