PIA Welcomes NAII Decision to Join Challenge to OCC on W.Va. Insurance Laws

February 11, 2002

The National Association of Professional Insurance Agents (PIA) has welcomed the decision of the National Association of Independent Insurers (NAII) to join in a court challenge to the Office of the Comptroller of the Currency’s (OCC) assertion of federal preemption of West Virginia’s banking insurance sales laws.

The controversy involves the decision by the OCC that certain elements of the State’s consumer protection laws governing insurance sales and solicitations cannot be applied to national banks, as they are superseded by federal statutes. Specifically at issue are provisions that prohibit insurance personnel from engaging in banking activities, except in smaller banks; prohibit the solicitation of insurance while loan applications are pending, and require physical separation of insurance and banking facilities.

The NAII has now joined the PIA and the IIAA in challenging the OCC’s decision as a usurpation of state law which contravenes the established principle that the individual states have primary responsibility for regulating insurers who do business within their borders.

“We are delighted that NAII has joined PIA in the lawsuit against the OCC that we filed in conjunction with the Independent Insurance Agents of America (IIAA),” stated PIA Sr. VP of Government Affairs Patricia A. Borowski. “The NAII’s decision to support our position adds a powerful ally to our effort to protect state regulation of insurance.”

Mike Koziol, NAII senior director and counsel, explained why his organization had decided to file an amicus brief in the U.S. District Court of the District of Columbia challenging the OCC’s preemption opinion. “The NAII is challenging the OCC and fighting the attack on state authority because we believe the individual states should be the regulators of the insurance business. If a bank regulator gets away with issuing a preempting opinion about whether a state law exceeds permissible scope, state regulation of insurance may be diminished.”

The OCC is expected to respond to the lawsuit by February 18.

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