WASHINGTON - Legislation aimed at broadening bank powers should be expanded to permit insured institutions to sell life insurance, a group of bankers and insurance companies said Wednesday.
The Financial Institutions Insurance Association released a report claiming that consumers are "dangerously underinsured" by the traditional system of insurance agents.
Richard D. Starr, the group's chairman, said his organization supports the industry modernization bills introduced by Senate Banking Committee Chairman Alfonse M. D'Amato, R-N.Y., House Banking Committee Chairman Jim Leach, R-Iowa, and Rep. Richard Baker, R-La.
However, he said they don't go far enough.
"Reform will not be accomplished if they do not include federal preemption provisions granting insurance agency and brokerage powers to all federally chartered depositories," Mr. Starr said of the bills.
The group's agenda could help to counteract strong lobbying efforts being mounted on Capitol Hill by the insurance industry, according to Bert Ely, a bank consultant based in Alexandria, Va.
"It's good to have a group like this pushing it's agenda, because it may help to neutralize any reactionary efforts on the part of the insurance agents to use these bills to get roll-backs" of banks' insurance powers, Mr. Ely said.