Regulatory Alerts2006-11-22 | ISGC-2006-012-DOBISGC-2006-012-DOB — Direct Insurance Sales By State Commercial Banks
The Washington State Department of Financial Institutions issued this interpretive letter to confirm that state-chartered commercial banks may engage in direct sales of life and disability insurance without specific prior approval or geographic restrictions. The Director of Banks determined that banks can invoke cross-charter and federal parity to assume the powers of federal mutual savings banks, thereby overriding state laws limiting such sales to cities with populations under 5,000. Additionally, the document clarifies that while the Gramm-Leach-Bliley Act preempts certain discriminatory state barriers, banks must still provide advance notice to the DFI and comply with federal and state regulations regarding referral fees and safety and soundness.