[Federal Register Volume 62, Number 52 (Tuesday, March 18, 1997)]
[Notices]
[Pages 12883-12884]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-6708]


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DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
[Docket No. 97-01]


Preemption Determination

AGENCY: Office of the Comptroller of the Currency, Treasury.

ACTION: Reopening of comment period.

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SUMMARY: The Office of the Comptroller of the Currency (OCC) is 
reopening the public comment period on the OCC's notice and request for 
comment regarding a request it has received for a preemption 
determination regarding certain provisions of the Rhode Island 
Financial Institution Insurance Sales Act.

DATES: Comments must be received by May 15, 1997.

ADDRESSES: Comments should be sent to the Communications Division, 250 
E Street, SW, Third Floor, Washington, DC 20219. Attention Docket No. 
97-01. In addition, comments may be sent by facsimile transmission to 
FAX number

[[Page 12884]]

(202) 874-5274 or by Internet mail to [email protected]. 
Comments will be available for inspection and photocopying at the E 
Street, SW, location. Appointments for inspection of comments can be 
made by calling (202) 874-4700.

FOR FURTHER INFORMATION CONTACT: Suzette Greco, Senior Attorney, 
Securities and Corporate Practices Division, (202) 874-5210 or Stuart 
Feldstein, Assistant Director, Legislative and Regulatory Activities 
Division, (202) 874-5090.

SUPPLEMENTARY INFORMATION: The OCC has been asked to determine whether 
certain provisions of the Rhode Island Financial Institution Insurance 
Sales Act (FIISA), pertaining to sales of insurance by financial 
institutions, are preempted by provisions of Federal law. On January 
14, 1997, the OCC sought comment on this request by notice published in 
the Federal Register (62 FR 1950). The deadline for submission of 
comments was February 13, 1997.
    As the Federal Register notice and request for comment indicated, 
the Rhode Island law imposes a number of requirements upon financial 
institutions engaged in the solicitation and sale of insurance that 
differ from the requirements that apply to other insurance agents and 
agencies. The request for a preemption determination contends that 
these special requirements prevent or significantly interfere with the 
ability of a national bank to exercise its authority under 12 U.S.C. 
92. See Barnett Bank of Marion County, N.A. v. Bill Nelson, Florida 
Insurance Commissioner, et al., 116 S.Ct. 1103, 1109 (1996) (stating 
that state laws are applicable to national banks provided they do not 
``prevent or significantly interfere'' with national banks' exercise of 
their powers).
    Section 92 authorizes a national bank ``located and doing business 
in any place the population of which does not exceed five thousand * * 
* [to] act as the agent for any fire, life, or other insurance 
company,'' to ``solicit[] and sell[] insurance,'' to ``collec[t] 
premiums,'' and to ``receive for services so rendered * * * fees or 
commissions,'' subject to rules and regulations prescribed by the 
Comptroller of the Currency. The FIISA special requirements include a 
provision prohibiting banks from requiring or implying that the 
purchase of insurance products from a bank is related to receiving 
another banking product or service, a provision restricting where a 
bank's licensed agent can solicit the sale of insurance, a provision 
prohibiting certain bank employees from soliciting and selling 
insurance, a provision requiring separate applications for loans and 
insurance, and a provision limiting the ability of a bank to use its 
customer information to solicit and sell insurance.
    The OCC is reopening the comment period until May 15, 1997, to 
allow interested parties the opportunity to consider the effect, if 
any, of a pending Rhode Island regulation that would implement the 
FIISA. On December 13, 1996, the Rhode Island Department of Business 
Regulation (DBR), Insurance Division, published notice of its proposal 
to promulgate Regulation 90, a rule that would apply to the sale of 
insurance by financial institutions in Rhode Island. Copies of the 
proposed regulation are on file at the DBR. Subsequently, on February 
10, 1997, the DBR held a public hearing on proposed Regulation 90. The 
DBR has stated that it intends to file Regulation 90, as amended to 
reflect any changes from the proposed rule, with the Rhode Island 
Secretary of State in early April, 1997. The final regulation is 
expected to take effect in mid-1997.
    In addition, the comments received to date on this matter raise 
certain points on which additional information would be helpful to the 
OCC. Specifically, the OCC invites commenters to address the following 
issues:
    1. How would national banks have to change the way they conduct 
their insurance sales activities to conform to the provisions of the 
FIISA that are described in the January 14, 1997 Federal Register 
notice? Commenters should address with specificity any business or 
operational adjustments, and associated costs, involved in conforming 
their operations to the FIISA provisions.
    2. The FIISA contains certain requirements intended to address the 
potential for customer confusion with regard to bank sales of 
insurance. What other approaches, including other formal mechanisms, 
are available to ensure that consumers are adequately protected?
    3. Would any of the provisions of the FIISA described in the OCC's 
previous notice disproportionately impact community banks with respect 
to personnel or other costs?
    4. To what extent would any of the FIISA provisions impact the 
ability of banks to use streamlined physical facilities which employ 
fewer staff and rely on technology to a greater extent than a 
traditional branch? To the extent there was any impact, how would 
customer convenience be affected? Would any of the provisions have a 
detrimental affect on convenient availability of a full line of 
products to customers?
    5. Banks operating in low-income areas increasingly are seeking to 
develop more efficient, low-overhead facilities and delivery systems 
when providing products and services in these areas. Would compliance 
with any provisions of the FIISA result in operating costs and burdens 
that would deter banks from providing insurance in low-income areas and 
thereby lessen access to a full line of financial products and services 
in low-income communities?
    6. What effect do recent amendments to the Fair Credit Reporting 
Act, 15 U.S.C. 1681 et seq., have on the FIISA provisions limiting the 
ability of a bank to use its customer information to solicit and sell 
insurance? The OCC welcomes comments on these issues and on any aspect 
of the FIISA on which the OCC has been asked to consider preemption.

    Dated: March 11, 1997.
Eugene A. Ludwig,
Comptroller of the Currency.
[FR Doc. 97-6708 Filed 3-17-97; 8:45 am]
BILLING CODE 4810-33-P