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INSURANCE PROVISIONS OF FINANCIAL SERVICES MODERNIZATION BILLS IN THE 106TH CONGRESS: ANTECEDENT SUPREME COURT DECISIONS, May 13, 1999 1 (May 13, 1999)

handle is hein.tera/crser0182 and id is 1 raw text is: Order Code RS20132 Updated May 13, 1999 CRS Report for Congress Received through the CRS Web Insurance Provisions of Financial Services Modernization Bills in the 106th Congress: Antecedent Supreme Court Decisions M. Maureen Murphy Legislative Attorney American Law Division Summary Part Of th e backgrond aginst wich financial services modernization legislaton is proceeding involes the way thd e ois ae tr ated insurance powers of national banks. Recent Supreme Court decisions have upheld regulatory interpretations establishing the ability of national banks to conduct varo oics kid s of surnce acivities. Na0,tionsellank of North Carolina, NA.. V Variable Anniyig Lank Insuirance Co. opened the a for natiOna basns tovslld in s psrance nationwide from towns of under 5,000, under te atorty Of sectiol 92 of tfe National Bank Act. Barned Bank of Marion County, NA. v1. NelsonI held thlat section 92 preempts State law s to the extent thlat thley prev ent or Significantly interfere ith the national bank's exercise of its powers. s ert will nlot be Updated. Financial services modernization legislation' is proceeding against a background of regulatory rulings and court decisions regarding insurance activities of national banks. Generally, banks by virtue of their charters and their enabling statutes, which may be state or federal, have limited powers that are generally confined to the business of banking. In some instances, they are specifically excluded from insurance activity. Over the course of the years, however, various legal authorities have permitted certain insurance sales activities. Three recent Supreme Court decisions have upheld regulatory interpretations establishing the ability of national banks to sell insurance from offices in towns of less than 5,000, to sell annuities, and to preempt state law forbidding bank sale of insurance. The Supreme Court decisions invalidating state prohibitions on national bank insurance sales leave open the possibility of some form of state regulation provided it does not 1 See CRS Report RS20098, 'Insurance Provisions of Financial Services Modernization Bills in the 10611 Congress; CRS Report RS20027, Financial Reform Legislation in the 106 1h Congress: Early Activity; CRS Issue Brief IB 1003 5, Financial Services Modernization Legislation in the 106 th Congress. Congressional Research Service +.s The Library of Congress

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