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#581 - 02/01/01 05:52 AM More Insurance Questions!
Bear Collector, CRCM Offline
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District of Columbia
I have been reading through Angela's thread regarding the new insurance rules. I have another question that maybe someone out there can address.
Our employees who sell annuities are "dual" employees of both the bank and our affiliated insurance company. When they sell these products, they are not working for the bank. The bank provides a physical place for these sales to take place, but the insurance company, not the bank receives fee income from the sale. If referrals are made from the teller line or the platform, these referrals are made to the investment person, but not for any specific product or service. In fact, non-licensed bank employees are prohibited from recommending any product. As an insurance employee, our investment people give all the appropriate disclosures required, but these are furnished by the company underwriting the annuity, like GE Capital. The customer signs and dates the disclosures and a copy goes into the file. We cannot give that person a disclosure that has the bank's name on it, and nothing with the bank's name or logo is allowed to be placed in the file. The bank is not selling the product, and is not recieving any fee or commission from the sale . So, do we fall under this rule or not? If so, how do we comply?
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General Discussion
#582 - 01/31/01 06:20 PM Re: More Insurance Questions!
De Vonne Offline
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Joined: Jan 2001
Posts: 84
Check 208.82 (j)(1) where it defines "YOU" as "a bank; or any other person only when the person sells, solicits, advertises, or offers an insurance product or annuity to a consumer at an office of the bank or on behalf of the bank. From what you wrote, it seems that the bank is receiving no benefit of any kind from the sale; however, the sale takes place at an office of the bank, using bank personnel, which requires compliance.

As far as how to comply, it sounds like the areas are separate, so as long as the disclosures are given and contain the required attributes, you may already be in good shape.


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#583 - 01/31/01 06:27 PM Re: More Insurance Questions!
Bear Collector, CRCM Offline
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Bear Collector, CRCM
Joined: Nov 2000
Posts: 1,830
District of Columbia
Where I keep getting hung up is that this is not being done on behalf of "the bank", nor are the salespeople "bank employees" when the sale takes place. These folks are actually employees of the insurance company: not the bank. In fact, some sales are done though a non-affiliated investment company, and these same employees are considered to be employees of that company when they speak with customers or make insurance or annuity sales. I hope you are right when you say we should be ok with what we are currently doing.
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#584 - 01/31/01 06:42 PM Re: More Insurance Questions!
De Vonne Offline
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Joined: Jan 2001
Posts: 84
Do your disclosures contain the attributes described in the text? Are the sales people licensed? Remember, the sale is conducted "at the bank" which is covered by the regulation.

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#585 - 01/31/01 07:20 PM Re: More Insurance Questions!
Bear Collector, CRCM Offline
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Bear Collector, CRCM
Joined: Nov 2000
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District of Columbia
All of our sales people are licensed, and the disclosures are the same ones we have been giving out forever: the "Not, Not, May" disclosures. (Not FDIC Insured, Not an obligation of any financial institution, May loose value").
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#586 - 01/31/01 07:24 PM Re: More Insurance Questions!
De Vonne Offline
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Joined: Jan 2001
Posts: 84
How do you handle the loan-related insurance products?

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#587 - 01/31/01 08:06 PM Re: More Insurance Questions!
Bear Collector, CRCM Offline
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Bear Collector, CRCM
Joined: Nov 2000
Posts: 1,830
District of Columbia
We haven't figured that part out yet! I am still trying to determine what products are covered under the law. I know about credit life and property and casualty, but what about PMI? or LPMI? The OCC will be here next week: I may just have to see if I can get any clarification. If I do, I'll post it here.
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