WASHINGTON - Signaling a change in position, a senior official at the Florida Department of Insurance said Friday that his office now believes that banks can sell annuities.

Donald Dowdell, an assistant general counsel at the insurance department, said the Supreme Court's recent decision in NationsBank v. Valic prevents the insurance commissioner from banning national bank annuity sales. Banking advocates noted that the position change also affects state banks because a wild-card statute gives state banks the same annuity powers as national banks.

Mr. Dowdell's comments came at a hearing Friday on draft rules governing annuity sales.

"That was said and it is implicit in the draft rules," said Tom Valentine, a senior attorney at the insurance department who attended the hearing.

The comment delighted bank lawyers and lobbyists, who had threatened to sue Florida if it continued to outlaw bank annuity sales.

"It was an amazingly important bit of information," said Mathew Street, associate general counsel at the American Bankers Association, who attended the hearing. "It is an amazingly important position to take. It means instead of fighting, they believe in Justice Ginsburg and her other eight colleagues."

The flip carries added significance because the insurance industry carries substantial clout in the state, said Bankers Roundtable general counsel Richard Whiting.

"I think it is in line with the trend across the country," Mr. Whiting said. "State insurance commissioners are bowing to the force of Valic."

Mr. Street said Mr. Dowdell's comments, coming at the end of a three- hour hearing in Tallahassee, altered his impression of the entire event.

That hearing included comments from bankers and insurers about what impact bank annuity sales would have in Florida. Mr. Street said banking advocates stressed that most other states permit bank annuity sales. And, they said consumers understand that annuities are not covered by deposit insurance.

Ann M. Kappler, a partner at Jenner & Block, spearheaded the insurance industry's case. Ms. Kappler was out of the office and could not be reached for comment.

But, Mr. Street said Ms. Kappler argued that Valic permits states to regulate, and thus ban, bank annuity sales.

Mr. Valentine said the public has until March 31 to submit written comments, which the insurance department will consider before publishing a formal proposal next month.

"My guess is that what we come up with will still draw a challenge," Mr. Valentine said. "But maybe it will be appealing enough to not be challenged."

But, Mr. Valentine said he is confident the state could win a challenge because insurance agents already must comply with many of the rules to which bankers are objecting.

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