[Federal Register: March 18, 1997 (Volume 62, Number 52)] [Notices] [Page 12883-12884] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr18mr97-119] ----------------------------------------------------------------------- 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. ----------------------------------------------------------------------- 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 REGS.COMMENTS@OCC.TREAS.GOV. 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