WASHINGTON - House Banking Committee Jim Leach warned last week that the banking industry might suffer if insured institutions were permitted to affiliate with insurance companies.
"Banks are more vulnerable than insurance companies to takeovers because of the fact that so many major insurance companies are mutuals, which are invulnerable to takeovers," he said in a speech to bank executives assembled by MasterCard.
A mutual insurance company is owned by its policyholders and is not publicly traded. Rep. Leach said the four largest insurance comnpanies - and seven of the top 10 - are mutuals.
"Because mutual insurance companies can purchase banks, from a takeover perspective, integration produces in many instances a one-way, not a two- way street," he said.
Insurance companies, he added, have "the green light going in their direction."