Court blocks bank entry into ins. (federal appeals court, South Dakota)

National Underwriter Property & Casualty-Risk & Benefits Management, April, 1989 by Brostoff, Steven

Court Blocks Bank Entry Into Ins. WASHINGTON--A federal appeals court has at least temporarily sidetracked a Federal Reserve Board decision opening up the South Dakota loophole. The Fed's decision would allow state-chartered subsidiaries of bank holding companies to engage in any insurance activities permitted by state law.

In a major victory for insurance agents, the Second Circuit Court of Appeals in New York last week issued a stay of the Fed's decision, meaning that the decision cannot go into effect until the court rules on its legality. That could take several months. Oral arguments are tentatively scheduled for sometime in June. At issue is whether an Indiana bank holding company--Merchants National Corp.--can sell and underwrite insurance...

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