OCC Preempts Three Provisions of Massachusetts Insurance Sales Law
The OCC determined that the bank insurance sales provisions of the Gramm-Leach-Bliley Act ("GLBA") preempt three provisions of the Massachusetts bank insurance sales law (the "Massachusetts Law"). Among other requirements, the Massachusetts Law prohibits bank personnel who are not licensed as insurance agents from referring prospective customers to a licensed insurance agent except upon an inquiry initiated by the customer (the "Referral Prohibition"), and it prohibits payment of any additional compensation to non-licensed bank personnel who make a referral, even if the compensation is not conditioned upon the sale of insurance (the "Referral Fee Prohibition"). The Massachusetts Law also prohibits banks from soliciting insurance in connection with any application for the extension of credit until after the application has been approved and, in the case of a mortgage application (provided that the bank is named as loss
