Financial Update (January-March 2001)
New Birmingham Building
Agencies Adopt Consumer Protection Rules for Insurance Sales
inal consumer protection rules for the sale of insurance products by depository institutions were announced in December by the Federal Reserve Board of Governors, the Federal Deposit Insurance Corp. (FDIC), the Office of the Comptroller of the Currency and the Office of Thrift Supervision. The rules go into effect April 1, 2001, implementing section 305 of the Gramm-Leach-Bliley Act of 1999.
The new rules apply to depository institutions or any person that sells, advertises or offers insurance products or annuities to consumers or solicits such purchases at an office of the institution or on behalf of the institution.
Under the new rules, a depository institution must make a number of disclosures.
These disclosures must be made orally and in writing before the sale of an insurance product or annuity is completed or, for an extension of credit, at the time the consumer applies for the credit. Disclosure may also be made electronically if certain conditions are met.
For more information, see the press release at www.federalreserve.gov/boarddocs/press/boardacts/2000/20001204.