November 24, 1998

Ms. Julie L. Williams
Acting Comptroller of the Currency
250 E Street, S.W.
Washington, D.C. 20219

Dear Ms. Williams:

In recent years, the Office of the Comptroller of the Currency (OCC) has granted national banks significant new authority to engage in the business of insurance. Just last month, the OCC issued an interpretation greatly expanding the "small town exception" in federal banking law (12 U.S.C. section 92) to permit the sale of insurance in any branch of a bank-owned insurance agency, as long as that bank-owned agency has its main office in a "place" with a population of 5,000 or fewer people.

The same OCC rulings that have significantly increased the ability of banks to sell insurance have called into question the ability of state insurance regulators to ensure that consumers enjoy the same protections when purchasing insurance from a bank as when purchasing insurance from insurance agents. Without strong consumer protections, consumers may be pressured to buy insurance from the banks that are also approving their mortgage or auto loans.

Putting aside, for purposes of this letter, disagreements over the OCC's rulings and the adequacy of regulatory authority and consumer protections, there can be no doubt that far more banks are engaging in insurance activities today than has ever been the case in the past. It is on this matter, the extent to which banks are currently engaged in the business of insurance and the circumstances and volume of their insurance activities, that I would like your help and assistance. In all the discussions on financial services deregulation over the last two years, I have never seen a comprehensive listing of those banks that are currently involved in insurance activities.

As the agency which has responsibility for regulating national banks, the OCC, I am certain, has information concerning the insurance activities of the banks it regulates. In this regard, I am requesting that you provide me with your written response to the following questions and requests for information by no later than close of business on December 21, 1998:

1. What are the names and all operating locations of banks, including all affiliates and subsidiaries of banks by name and operating location, that are currently engaged in insurance activities?

   a. For each bank and bank affiliate or subsidiary identified, please describe the type of insurance activities being undertaken: sales; underwriting; or reinsurance.

   b. For each bank and bank affiliate or subsidiary identified, please describe the insurance product being sold, underwritten, or reinsured: life insurance; property casualty; health insurance; etc.

   c. For each bank and bank affiliate or subsidiary identified, please identify both the premium value and the full insured/at-risk value of all insurance products sold, underwritten, or reinsured for each year, 1993 through 1997.

2. How many agents are currently selling insurance in banks and bank affiliates or subsidiaries? Are all of these agents licensed by state insurance regulators, and if not, which ones are not, and why are they not state-licensed?

3. How many bank personnel involved in loan activities are licensed insurance agents?

4. What banks and bank affiliates or subsidiaries (please provide names and operating locations) are currently engaged in insurance underwriting? By which state insurance regulators are these banks and bank affiliates or subsidiaries licensed to engage in insurance underwriting? Are any operating under authority of foreign insurance regulators to engage in insurance underwriting, and if so, please identify by name and operating locations?

5. Are there any banks or bank affiliates or subsidiaries (please provide names and operating locations) whose insurance activities, including reinsurance activities, are being run by independent contractors or managing general agents?

Thank you for your cooperation. I look forward to receiving the information I have requested.

Sincerely,

JOHN D. DINGELL
RANKING MEMBER

cc: The Honorable Tom Bliley, Chairman
Committee on Commerce

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