The Financial Institutions Insurance Association is up in arms over attempts to wrap bank insurance powers in legislation shoring up the thrift insurance fund.
Details of the thrift bill are still being hammered out, but Rep. Jim Leach is pushing a provision that would give state insurance commissioners broad authority to license agents.
Michael White, president of the trade group, spelled out his objections in a Sept. 10 letter to members of Congress. Excerpts follow:
HR 1858 ... threatens the ability of both national and state-chartered banks to sell annuities and insurance in an open and competitive marketplace.
Its provisions provide a method to undermine the Barnett and Valic decisions. They are clearly designed to forestall the further entry of banks into insurance sales by reopening issues such as federal preemption (of state laws) and the Comptroller's ability to authorize activities that are incidental to banking, like annuity sales.
(The bill would) prevent bank holding companies and their nonbank subsidiaries from acquiring agencies. It offers new, mischievous opportunities to challenge statutory national bank insurance powers. Finally, it appears to roll back the (Federal Reserve) Board's January determination that section 20 companies may sell annuities.