SENATE BILL REPORT

SB 5192

BYSenators Owen, Deccio, Warnke, Metcalf, Hansen, Johnson, Conner, Nelson and Bauer

Prohibiting sale of insurance on bank premises.

Senate Committee on Financial Institutions

Senate Hearing Date(s):January 29, 1987

Senate Staff:Stephanie Yates (786-7416)

AS OF JANUARY 28, 1987

BACKGROUND:

State-chartered savings banks and savings and loan associations are permitted to engage in insurance agency activities.  Authority for state-chartered and nationally-chartered banks to engage in insurance agency activities is restricted to credit-related insurance and insurance agency activities in towns of less than 5,000 people.

SUMMARY:

Insurance agency activities are prohibited on bank premises.  Employees of a bank are prohibited from engaging in insurance agency activities on or off bank premises.  However, insurance agency activities previously authorized for banks are grandfathered at their present levels.

An insurance agent may serve as an officer or director of a bank, provided that such agent contributes no earnings to the bank which are derived from his or her insurance activities.

A retail establishment which engages in insurance agency activities, either directly or through a subsidiary, and which owns an out-of-state bank, is exempt from the above prohibition against engaging in insurance agency activities on bank premises.

Fiscal Note:      none requested

Effective Date:The bill contains an emergency clause and takes effect immediately.