Mississippi Gov. Kirk Fordice on Monday signed a law designed to enable state-chartered banks to sell insurance.
The measure, which will take effect July 1, will give state-chartered banks parity with nationally chartered institutions that are already allowed to sell insurance.
The state Senate passed the bill late last month, following the House.
The parity bill, which the state chapter of the Independent Insurance Agents of America opposed, was crafted to let banks throughout the state move into insurance on an equal playing field.
The bill was "our top priority this year," said Aubrey Burns Patterson, chairman of $2.3 billion-asset Bank of Mississippi, Tupelo.
"What all of us will be doing is meeting with our friends in the insurance business and developing strategies," said Mr. Patterson, "whether they be agency purchases, joint ventures, or whatever.".
The Bank of Mississippi is already entering into insurance operations through an affiliate in Tennessee and plans to expand those operations into Mississippi as soon as possible.
But Mississippi's state banks face at least one more hurdle: The state insurance commissioner has barred all banks-national and state-chartered- from pursuing insurance activities.
Jackson-based Deposit Guaranty National Bank sued Commissioner George Dale in 1995 over his refusal to let banks get into the business. Its case was bolstered last year when the U.S. Supreme Court ruled that the National Bank Act supersedes state laws limiting bank insurance powers. But Deposit Guaranty continues to await a ruling in its case in U.S. District Court in Jackson.
Meanwhile, the insurance commissioner and the state Banking Department are working together to satisfy both insurance industry advocates and banking interests. The officials have tentatively agreed to a joint directive that sets out how insurance activities by banks will be regulated.
That directive, which includes a provision for the licensing of bank insurance options, is awaiting approval of the state attorney general's office.
Jeff Myers, spokesman for the Independent Insurance Agents of America, said it viewed the joint directive as a victory that helps offset its failure to derail the parity bill.