The Ohio Supreme Court has ordered the state's Department of Insurance to rule on a Huntington Bancshares unit's application for a property insurance license.
The order, handed down last Wednesday, ends a standoff between the department and the Columbus-based banking company, which applied for both property and life insurance licenses in April 1993. But the court left it up to the department's superintendent to decide on the merits of the applications.
"Huntington has a clear legal right to a determination by the superintendent on its application, and the superintendent has a corresponding legal duty to render the determination," the eight-page order said. It was approved 5 to 1, with one justice abstaining.
"The Insurance Department has done absolutely nothing for two years," said Daniel W. Morton, vice president and counsel at Huntington National Bank. "We think the result should be that the department makes their decision soon."
Although the order does not address Huntington's life insurance application, Mr. Morton said the court's reasoning "responds to the same argument that's being made to delay the life insurance application."
David J. Randall, deputy director of the Department of Insurance, said Friday that the application is under review, but no deadline has been set for a decision. "We fully expect litigation regardless of our decision," he added.
The issuance of the order - formally, a writ of mandamus - was proclaimed a victory by the Ohio Bankers Association, which said it marks "a leap forward" in the industry's push for insurance powers.
But the Independent Insurance Agents of Ohio said it was too soon for bankers to pop open the champagne. The order "doesn't say grant the application, and it doesn't say deny it," said Thomas H. Hardy, executive vice president.
He argued that the Department of Insurance lacks a regulatory framework to grant an insurance license to Huntington's insurance subsidiary and should therefore reject the application.