Vendor Pitching Insurance Products in Bank Lobby

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Question:

Our business development department wants to bring in a third party vendor to approach our customers in the lobby to entice them to purchase insurance related products. With the exception of the third party vendor issues, are there any other specific compliance issues that need to be explored?

Answer:

You need to become very familiar with the rules on consumer protection in sales of insurance. For state non-member banks, these regulations are at 12 CFR 343. Mirror regulations are also in effect for state member banks (12 CFR 208), national banks (12 CFR 14) and OTS-regulated thrifts (12 CFR 536). These regulations govern insurance sales by the bank as well as covering persons selling insurance at an office of a bank or on behalf of the bank.

First published on BankersOnline.com 10/13/08