Court Upholds Occ Pre-emption of State Insurance Law
In an unpublished opinion, a three-judge panel of the Fourth Circuit of the U. S. Court of Appeals disagreed with the West Virginia insurance commissioner that the OCC had overstepped its authority. Using its authority under the Gramm-Leach-Bliley Act (GLBA), the OCC had declared certain restrictions in the West Virginia statute regarding bank sales of insurance were pre-empted by GLBA. The three-judge panel held that the OCC acted properly.
This is the first decision upholding the OCC's authority under GLBA. While some claimed a victory for national banks and the OCC, others questioned whether this would establish a firm precedent. The West Virginia insurance commissioner has already indicated that it will not be bound by the decision, although they may ask the court to reconsider. A similar case is pending in Massachusetts.