Regulatory Alerts1982-10-25
Alabama State Banking Department Policy on Sale of Credit Life Insurance
The Alabama State Banking Department issued this letter to clarify policies regarding the selection of insurance providers and the handling of commissions from credit life insurance sales. The Board of Directors must base provider selection on service and benefits, while any ownership interests held by bank officers or directors must be disclosed and excluded from the decision-making process. All income derived from these sales, including performance bonuses, must be credited directly to the bank's income to prevent conflicts of interest and embezzlement.
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