Massachusetts Insurance Law Case Dismissed
A federal appeals court has dismissed a petition by the Massachusetts insurance commissioner that sought to set aside OCC's determination that three provisions of Massachusetts law restricting bank insurance sales are preempted by federal law. The court's dismissal of the petition leaves the issue up in the air. ICBA was an amicus party in the suit supporting the OCC.
The court held that there was no "regulatory conflict" to adjudicate because OCC's informal opinion letter provides guidance to banks, but does not have the force of law. The court also noted that determination of whether the state insurance law is preempted because it hinders the ability of national banks to engage in insurance sales is a factual matter that should be considered after presentation of evidence in a trial court, not by an appellate court.
Resolution of the issue must now await further developments, for example, action by Massachusetts against individual banks to enforce the law, rather than action against the OCC.