New York Codes, Rules and Regulations › Title 3 - BANKING › Chapter I - GENERAL REGULATIONS OF THE SUPERINTENDENT › Part 6 - Additional Authority Of Banks, Trust Companies, Savings Banks And Savings And Loan Associations Pursuant To Banking Law, Sections 14-g And 14-h › Section 6.3 - Additional insurance powers of banks and trust companies

Current through Register Vol. 46, No. 28, July 10, 2024
(a) The Banking Board hereby finds that the
				promulgation of this section is consistent with the policy of the State of New
				York as declared in section 10 of the New York Banking Law and thereby protects
				the public interest, including the interests of depositors, creditors,
				shareholders, stockholders and consumers and is necessary to achieve or
				maintain parity between banks and trust companies and national banks with
				respect to rights, powers, privileges, benefits, activities, loans, investments
				or transactions.
(b) The Banking
				Board hereby finds that  title 12, United States Code, section 92, and title 12,
				Code of Federal Regulations,[FN*] section 7.1001, permit national banks located
				and doing business in places the population of which does not exceed 5,000
				persons to sell insurance directly. Such power of national banks to sell
				insurance directly pursuant to title 12, United States Code,* section 92, was
				unanimously upheld by the United States Supreme Court in the case of Barnett
				Bank of Marion County, N.A. v. Nelson, 517 U.S. 25, 116 S. Ct. 1103
				(1996).
(c) Banks and trust
				companies located and doing business in any place the population of which does
				not exceed 5,000 inhabitants, as shown by the last preceding decennial census,
				may act as the agent for any fire, life, or other insurance company authorized
				by the authorities of the state in which the bank is located to do business in
				such state, by soliciting and selling insurance and collecting premiums on
				policies issued by such company; and may receive for services so rendered such
				fees or commissions as may be agreed upon between the bank or trust company and
				the insurance company for which it may act as agent; provided, however, that no
				such bank or trust company shall in any case assume or guarantee the payment of
				any premium on insurance policies issued through its agency by its principal;
				and provided further, that the bank shall not guarantee the truth of any
				statement made by an assured in filing his or her application for
				insurance.
(d) This section is
				applicable to any office of a bank or trust company when the office is located
				in a place with a population of less than 5,000, even though the principal
				office of such bank or trust company is located in a place with a population
				exceeding 5,000.
(e) Banks and
				trust companies engaging in the business of insurance pursuant to this section
				shall do so subject to regulation by the State Insurance Department and
				pursuant to all the insurance laws, rules and regulations, provided, however,
				that the Banking Board, in consultation with the Superintendent of Insurance,
				may exempt banks or trust companies from any insurance law, rule or regulation
				which has been preempted under Federal law, rule or regulation for national
				banks if such law, rule or regulation has been preempted because it applies to
				insurance activities of banks or trust companies and not to insurance
				activities of other entities.
(f)
				Banks and trust companies engaging in the business of insurance pursuant to
				this section shall comply with the following requirements relating to the sale
				of insurance.
(1) Except with respect to a
				credit unemployment insurance policy, group credit life insurance policy, a
				group credit health, group credit accident or group credit health and accident
				policy, or similar group credit insurance covering the person of the insured,
				banks, trust companies and any person soliciting the purchase of or selling
				insurance on the premises thereof, must disclose or cause to be disclosed in
				writing, in clear and concise language, to their customers and prospective
				customers who are solicited therefor that any insurance offered or sold:
(i) is not a deposit;
(ii) is not insured by the Federal Deposit
				Insurance Corporation; and
(iii) is
				not guaranteed by the bank or trust company.