**Approval Letter**---**Sale of Insurance and Annuity Products**

\[OCC LOGO\]

Date

Name of Representative

Name of Bank

Address

City, State, ZIP Code

Re: Operating Subsidiary to Engage in Insurance Agency Activities, CAIS
Control Number

Dear Mr. or Ms. (Name):

This responds to your operating subsidiary application, filed on behalf
of \[bank's name\] (the bank) on (*date*). The bank proposes to
establish \[or expand the activities of\], an operating subsidiary (the
subsidiary), to engage in certain general insurance agency activities as
permitted under 12 USC 92 **\[and to act as agent for the sale of fixed
and variable rate annuities pursuant to 12 USC 24(Seventh)\]**.

In the OCC's letter, dated November 4, 1996, responding to operating
subsidiary notifications filed by First Union Corporation (the *First
Union letter*) (copy enclosed), the OCC thoroughly analyzed section 92
and concluded that a national bank insurance agency selling insurance
pursuant to the authority of section 92 should be permitted the same
marketing range and be able to use the same marketing tools and
facilities as generally available for licensed insurance agencies, not
affiliated with a bank, in the state(s) in which the bank agency
operates. Accordingly, the OCC stated that the following general
principles can be distilled to define the scope of solicitation and
sales activities permissible for national banks under 12 USC 92:[^1]

-   The agency located in the "place of 5,000" must, of course, be *bona
    fide*. . . . Agents will be managed through the agency and the
    "place of 5,000" will be the agency's business location for
    licensing purposes. Each agency will be responsible for collecting
    commissions from insurance carriers and paying commissions to its
    licensed sales staff. The agency also generally will be responsible
    for processing insurance applications, delivery of insurance
    policies, and collection of premiums, where consistent with
    procedures of the relevant insurance carriers. In addition, business
    records of the agency, including copies of customer application and
    policy information, and licensing, customer complaint and other
    compliance records, will be available at the "place of 5,000."[^2]

-   The bank agency and its agents may seek the same market range and
    use the same marketing tools and facilities as generally available
    for a licensed insurance agency, not affiliated with a bank, that is
    based in the "place of 5,000."[^3] This will generally allow the
    following:

> --- Meetings with customers and solicitations and sales of insurance
> by agents of the bank agency may take place at locations inside the
> "place of 5,000" as well as at locations outside that "place,"
> provided the agents are managed and paid through the bank agency
> located in the "place of 5,000" and use that location as their place
> of business for licensing purposes. If an insurance company has
> adopted other procedures for its nonbank agents, however, the bank
> agency may follow the same procedures as other insurance agents
> selling the company's policies.
>
> --- Mailings to advertise and sell insurance may originate from inside
> or outside of the "place of 5,000," and brochures, leaflets, and other
> literature alerting potential customers to the bank's insurance
> activities may be distributed from locations both inside and outside
> of the "place of 5,000," including other branches of the same bank.
> Personnel of bank branches outside of the "place of 5,000" also may
> make referrals to the bank's insurance agency. Likewise, telephone and
> cybermarketing may be used and the calls and messages need not
> originate within the "place of 5,000."
>
> --- The bank may contract with third parties to assist the agency's
> sales activities. For example, third parties might provide advertising
> support, direct mail marketing services, telemarketing services,
> payments processing, or other types of "back office" support.

The analysis and discussion set forth in the *First Union letter* are
equally applicable to the notification submitted by the bank and are
hereby incorporated by reference. By letter dated (*date*),
supplementing its notification, the bank has represented that it will
conduct the bank's and the subsidiary's activities consistent with the
principles set forth in the *First Union letter*. Accordingly, the
bank's notification is approved, provided that the insurance sales
activities of the bank and the subsidiary shall be conducted in a manner
consistent with the interpretation of section 92 and the principles for
applying section 92 set forth in the *First Union letter*.

**\[Finally, the subsidiary's proposed sales, as agent, of fixed and
variable rate annuities are authorized under 12 USC 24(Seventh) and,
accordingly, are approved.\]**

If you have any questions, contact (name) at (telephone number) or
(e-mail).

Sincerely,

---Signature---

Name and Title

Enclosure: First Union Letter

[^1]: ^1^The OCC recognized in the *First Union letter* that
    solicitation and sales techniques can vary with the different
    marketing strategies employed by different banks and still be
    consistent with the general principles described in the *First Union
    letter*.

[^2]: ^2^Some of these business records may be maintained and available
    at the agency in electronic form, with the original hardcopy kept in
    off-site storage.

[^3]: ^3^The *First Union letter* does not address and is not intended
    to express any opinion on any state law preemption issues. The
    application of state law would need to comply with recognized
    preemption standards. See generally *Barnett Bank of Marion County,
    N.A. v. Nelson*, 134 L. Ed. 2d 237 (1996), and the cases cited
    therein.