I
104TH CONGRESS
1ST SESSION
H. R. 2503
To clarify the authority of States to regulate national bank insurance activity,
to limit the authority of the Comptroller of the Currency to authorize
national banks to engage in new insurance activities, and for other
purposes.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 18, 1995
Mr. SOLOMON (for himself, Mr. BURTON, and Mr. MCINNIS) introduced the
following bill; which was referred to the Committee on Banking and Fi-
nancial Services
A BILL
To clarify the authority of States to regulate national bank
insurance activity, to limit the authority of the Comptrol-
ler of the Currency to authorize national banks to engage
in new insurance activities, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Bank Insurance Regu-
lation Act of 1995’’.
SEC. 2. AUTHORITY OF THE COMPTROLLER OF THE CUR-
RENCY.
(a) STATE SUPERVISION.—Chapter 1 of Title LXII
of the Revised Statutes of the United States (12 U.S.C.
21 et seq.) is amended—
(1) by redesignating section 5136A as section
5136B; and
(2) by inserting after section 5136 (12 U.S.C.
24) the following new section:
‘‘SEC. 5136A. STATE SUPERVISION OF INSURANCE.
‘‘(a) STATE LICENSING
OF INSURANCE ACTIVI-
TIES.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
no provision of section 5136, any other section of
this title, or section 13 of the Federal Reserve Act
may be construed as limiting or otherwise impairing
the authority of any State to regulate—
‘‘(A) the extent to which, and the manner
in which, a national bank may engage within
the State in insurance activities pursuant to
section 13 of the Federal Reserve Act;
‘‘(B) the manner in which a national bank
may engage within the State in insurance ac-
tivities pursuant to section 5136(b)(2)(B) of
the Revised Statutes of the United States; or
‘‘(C) the manner in which a national bank
may engage within the State in insurance ac-
tivities pursuant to section 5136(b)(2)(A) of the
Revised Statutes of the United States through,
and limited to, consumer disclosure require-
ments or licensing requirements, procedures,
and qualifications as described in paragraph
(2)(C).
‘‘(2) PROHIBITION ON STATE DISCRIMINATION
AGAINST NATIONAL BANKS.—Notwithstanding para-
graph (1)—
‘‘(A) PROVIDING INSURANCE AS AGENT OR
BROKER.—No State may impose any insurance
regulatory requirement relating to providing in-
surance as an agent or broker that treats a na-
tional bank differently than all other persons
who are authorized to provide insurance as
agents or brokers in such State, unless there is
a legitimate and reasonable State regulatory
purpose for the requirement for which there is
no less restrictive alternative.
‘‘(B) PROVIDING
INSURANCE
AS
PRIN-
CIPAL, AGENT, OR BROKER.—
‘‘(i) No State may impose on a na-
tional bank any insurance regulatory re-
quirement relating to providing insurance
as principal, agent, or broker that treats
the national bank more restrictively than
any other depository institution (as defined
in section 3(c)(1) of the Federal Deposit
Insurance Act) operating in the State.
‘‘(ii) Nothing in this subparagraph
shall affect the validity of a State law
that—
‘‘(I) prevents a national bank
from engaging in insurance activities
within the State to as great an extent
as a savings association (as defined in
section 3(b)(1) of the Federal Deposit
Insurance Act) may engage in such
activities within the State; and
‘‘(II) was in effect on June 1,
1995.
‘‘(C) LICENSING
QUALIFICATIONS
AND
PROCEDURES.—No State may discriminate
against a national bank with respect to the fol-
lowing requirements, procedures, and qualifica-
tions as such requirements, procedures, and
qualifications relate to the authority of the na-
national bank to act as insurance agent or broker consist-
ent with State law.
‘‘(d) PRESERVATION OF NATIONAL BANK AUTHOR-
ITY CONSISTENT WITH STATE BANK AUTHORITY.—Ex-
cept as provided in subsection (a)(2)(B), no provision of
this section or section 5136(b)(1) shall have the effect of
enabling a State to deny a national bank authority that
the bank otherwise possesses to provide a product in a
State, including as agent, broker, or principal, where the
bank is not providing the product in the State other than
to an extent and in a manner that a State bank (as de-
fined in section 3(a)(2) of the Federal Deposit Insurance
Act) is permitted by the law of the State to provide such
product, except that nothing in this subsection shall be
construed as granting any new authority to a national
bank to provide any product because the law of the State
has authorized State banks to provide such product.
‘‘(e) DEFINITIONS.—For purposes of this section,
section 5136, and section 13 of the Federal Reserve Act,
the following definitions shall apply:
‘‘(1) INSURANCE.—The term ‘insurance’ means
any product defined or regulated as insurance, con-
sistent with the relevant State insurance law, by the
insurance regulatory authority of the State in which
such product is sold, solicited, or underwritten, in-
cluding any annuity contract the income on which is
tax deferred under section 72 of the Internal Reve-
nue Code of 1986.
‘‘(2) STATE.—The term ‘State’ has the same
meaning as in section 3(a)(3) of the Federal Deposit
Insurance Act.
‘‘(f) GRANDFATHER PROVISION.—
‘‘(1) IN GENERAL.—Any national bank which,
before January 1, 1995, was providing insurance as
agent or broker under section 13 of the Federal Re-
serve Act may provide insurance as an agent or
broker under such section, to no less extent and in
a no more restrictive manner as such bank was pro-
viding insurance as agent or broker under such sec-
tion on January 1, 1995, notwithstanding contrary
State law, subject to final, controlling judgment in
a pending action.
‘‘(2) TERMINATION.—This subsection shall
cease to apply with respect to any national bank de-
scribed in paragraph (1) if—
‘‘(A) the bank is subject to an acquisition,
merger, consolidation, or change in control,
other than a transaction to which section
18(c)(12) of the Federal Deposit Insurance Act
applies; or
‘‘(B) any bank holding company which di-
rectly or indirectly controls such bank is subject
to an acquisition, merger, consolidation, or
change in control, other than a transaction in
which the beneficial ownership of such bank
holding company or of a bank holding company
which controls such company does not change
as a result of the transaction.’’.
(b) INTERPRETIVE AUTHORITY OF THE COMPTROL-
LER OF THE CURRENCY.—Section 5136 of the Revised
Statutes of the United States (12 U.S.C. 24) is amend-
ed—
(1) by striking ‘‘Upon duly making and filing
articles of association’’ and inserting ‘‘(a) IN GEN-
ERAL.—Upon duly making and filing articles of as-
sociation’’; and
(2) by adding at the end the following new sub-
section:
‘‘(b) INTERPRETIVE AUTHORITY OF THE COMPTROL-
LER OF THE CURRENCY.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
it shall not be incidental to banking for a national
bank to provide insurance as a principal, agent, or
broker.
‘‘(2) SCOPE
OF
APPLICATION.—Notwithstand-
ing paragraph (1), it shall be incidental to banking
for a national bank to engage in the following activi-
ties:
‘‘(A) Providing, as an agent or broker, any
annuity contract the income on which is tax de-
ferred under section 72 of the Internal Revenue
Code of 1986.
‘‘(B) Providing, as a principal, agent, or
broker, any type of insurance, other than an
annuity or title insurance, which the Comptrol-
ler of the Currency specifically determined, be-
fore May 1, 1995, to be incidental to banking
with respect to national banks.’’.
(c) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) The 11th undesignated paragraph of section
13 of the Federal Reserve Act (12 U.S.C. 92) is
amended by inserting ‘‘, and subject to section
5136A of the Revised Statutes of the United
States,’’ after ‘‘the laws of the United States’’.
(2) The paragraph designated the ‘‘Seventh’’ of
section 5136 of the Revised Statutes of the United
States (12 U.S.C. 24) is amended by striking ‘‘sub-
ject to law,’’ and inserting ‘‘subject to subsection
(b), section 5136A, and any other provision of law,’’.
(3) Section 1306 of title 18, United States
Code, is amended by striking ‘‘5136A’’ and inserting
‘‘5136B’’.
(d) CLERICAL AMENDMENT.—The table of sections
for chapter 1 of title LXII of the Revised Statutes of the
United States is amended—
(1) by redesignating the item relating to section
5136A as section 5136B; and
(2) by inserting after the item relating to sec-
tion 5136 the following new item:
‘‘5136A. State supervision of insurance.’’.
(e) PRESERVATION OF BANK HOLDING COMPANY IN-
SURANCE AUTHORITY.—No provision of this section, and
no amendment made by this section to any other provision
of law, may be construed as affecting the authority of a
bank holding company to engage in insurance agency ac-
tivity pursuant to section 4(c) of the Bank Holding Com-
pany Act of 1956.
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