
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 15USC6701]

 
                      TITLE 15--COMMERCE AND TRADE
 
                          CHAPTER 93--INSURANCE
 
Sec. 6701. Operation of State law


(a) State regulation of the business of insurance

    The Act entitled ``An Act to express the intent of Congress with 
reference to the regulation of the business of insurance'' and approved 
March 9, 1945 (15 U.S.C. 1011 et seq.) (commonly referred to as the 
``McCarran-Ferguson Act'') remains the law of the United States.

(b) Mandatory insurance licensing requirements

    No person shall engage in the business of insurance in a State as 
principal or agent unless such person is licensed as required by the 
appropriate insurance regulator of such State in accordance with the 
relevant State insurance law, subject to subsections (c), (d), and (e) 
of this section.

(c) Affiliations

                           (1) In general

        Except as provided in paragraph (2), no State may, by statute, 
    regulation, order, interpretation, or other action, prevent or 
    restrict a depository institution, or an affiliate thereof, from 
    being affiliated directly or indirectly or associated with any 
    person, as authorized or permitted by this Act or any other 
    provision of Federal law.

                            (2) Insurance

        With respect to affiliations between depository institutions, or 
    any affiliate thereof, and any insurer, paragraph (1) does not 
    prohibit--
            (A) any State from--
                (i) collecting, reviewing, and taking actions (including 
            approval and disapproval) on applications and other 
            documents or reports concerning any proposed acquisition of, 
            or a change or continuation of control of, an insurer 
            domiciled in that State; and
                (ii) exercising authority granted under applicable State 
            law to collect information concerning any proposed 
            acquisition of, or a change or continuation of control of, 
            an insurer engaged in the business of insurance in, and 
            regulated as an insurer by, such State;

        during the 60-day period preceding the effective date of the 
        acquisition or change or continuation of control, so long as the 
        collecting, reviewing, taking actions, or exercising authority 
        by the State does not have the effect of discriminating, 
        intentionally or unintentionally, against a depository 
        institution or an affiliate thereof, or against any other person 
        based upon an association of such person with a depository 
        institution;
            (B) any State from requiring any person that is acquiring 
        control of an insurer domiciled in that State to maintain or 
        restore the capital requirements of that insurer to the level 
        required under the capital regulations of general applicability 
        in that State to avoid the requirement of preparing and filing 
        with the insurance regulatory authority of that State a plan to 
        increase the capital of the insurer, except that any 
        determination by the State insurance regulatory authority with 
        respect to such requirement shall be made not later than 60 days 
        after the date of notification under subparagraph (A); or
            (C) any State from restricting a change in the ownership of 
        stock in an insurer, or a company formed for the purpose of 
        controlling such insurer, after the conversion of the insurer 
        from mutual to stock form so long as such restriction does not 
        have the effect of discriminating, intentionally or 
        unintentionally, against a depository institution or an 
        affiliate thereof, or against any other person based upon an 
        association of such person with a depository institution.

(d) Activities

                           (1) In general

        Except as provided in paragraph (3), and except with respect to 
    insurance sales, solicitation, and cross marketing activities, which 
    shall be governed by paragraph (2), no State may, by statute, 
    regulation, order, interpretation, or other action, prevent or 
    restrict a depository institution or an affiliate thereof from 
    engaging directly or indirectly, either by itself or in conjunction 
    with an affiliate, or any other person, in any activity authorized 
    or permitted under this Act and the amendments made by this Act.

                         (2) Insurance sales

        (A) In general

            In accordance with the legal standards for preemption set 
        forth in the decision of the Supreme Court of the United States 
        in Barnett Bank of Marion County N.A. v. Nelson, 517 U.S. 25 
        (1996), no State may, by statute, regulation, order, 
        interpretation, or other action, prevent or significantly 
        interfere with the ability of a depository institution, or an 
        affiliate thereof, to engage, directly or indirectly, either by 
        itself or in conjunction with an affiliate or any other person, 
        in any insurance sales, solicitation, or crossmarketing 
        activity.

        (B) Certain State laws preserved

            Notwithstanding subparagraph (A), a State may impose any of 
        the following restrictions, or restrictions that are 
        substantially the same as but no more burdensome or restrictive 
        than those in each of the following clauses:
                (i) Restrictions prohibiting the rejection of an 
            insurance policy by a depository institution or an affiliate 
            of a depository institution, solely because the policy has 
            been issued or underwritten by any person who is not 
            associated with such depository institution or affiliate 
            when the insurance is required in connection with a loan or 
            extension of credit.
                (ii) Restrictions prohibiting a requirement for any 
            debtor, insurer, or insurance agent or broker to pay a 
            separate charge in connection with the handling of insurance 
            that is required in connection with a loan or other 
            extension of credit or the provision of another traditional 
            banking product by a depository institution, or any 
            affiliate of a depository institution, unless such charge 
            would be required when the depository institution or 
            affiliate is the licensed insurance agent or broker 
            providing the insurance.
                (iii) Restrictions prohibiting the use of any 
            advertisement or other insurance promotional material by a 
            depository institution or any affiliate of a depository 
            institution that would cause a reasonable person to believe 
            mistakenly that--
                    (I) the Federal Government or a State is responsible 
                for the insurance sales activities of, or stands behind 
                the credit of, the institution or affiliate; or
                    (II) a State, or the Federal Government guarantees 
                any returns on insurance products, or is a source of 
                payment on any insurance obligation of or sold by the 
                institution or affiliate;

                (iv) Restrictions prohibiting the payment or receipt of 
            any commission or brokerage fee or other valuable 
            consideration for services as an insurance agent or broker 
            to or by any person, unless such person holds a valid State 
            license regarding the applicable class of insurance at the 
            time at which the services are performed, except that, in 
            this clause, the term ``services as an insurance agent or 
            broker'' does not include a referral by an unlicensed person 
            of a customer or potential customer to a licensed insurance 
            agent or broker that does not include a discussion of 
            specific insurance policy terms and conditions.
                (v) Restrictions prohibiting any compensation paid to or 
            received by any individual who is not licensed to sell 
            insurance, for the referral of a customer that seeks to 
            purchase, or seeks an opinion or advice on, any insurance 
            product to a person that sells or provides opinions or 
            advice on such product, based on the purchase of insurance 
            by the customer.
                (vi) Restrictions prohibiting the release of the 
            insurance information of a customer (defined as information 
            concerning the premiums, terms, and conditions of insurance 
            coverage, including expiration dates and rates, and 
            insurance claims of a customer contained in the records of 
            the depository institution or an affiliate thereof) to any 
            person other than an officer, director, employee, agent, or 
            affiliate of a depository institution, for the purpose of 
            soliciting or selling insurance, without the express consent 
            of the customer, other than a provision that prohibits--
                    (I) a transfer of insurance information to an 
                unaffiliated insurer in connection with transferring 
                insurance in force on existing insureds of the 
                depository institution or an affiliate thereof, or in 
                connection with a merger with or acquisition of an 
                unaffiliated insurer; or
                    (II) the release of information as otherwise 
                authorized by State or Federal law.

                (vii) Restrictions prohibiting the use of health 
            information obtained from the insurance records of a 
            customer for any purpose, other than for its activities as a 
            licensed agent or broker, without the express consent of the 
            customer.
                (viii) Restrictions prohibiting the extension of credit 
            or any product or service that is equivalent to an extension 
            of credit, lease or sale of property of any kind, or 
            furnishing of any services or fixing or varying the 
            consideration for any of the foregoing, on the condition or 
            requirement that the customer obtain insurance from a 
            depository institution or an affiliate of a depository 
            institution, or a particular insurer, agent, or broker, 
            other than a prohibition that would prevent any such 
            depository institution or affiliate--
                    (I) from engaging in any activity described in this 
                clause that would not violate section 106 of the Bank 
                Holding Company Act Amendments of 1970 [12 U.S.C. 1971 
                et seq.], as interpreted by the Board of Governors of 
                the Federal Reserve System; or
                    (II) from informing a customer or prospective 
                customer that insurance is required in order to obtain a 
                loan or credit, that loan or credit approval is 
                contingent upon the procurement by the customer of 
                acceptable insurance, or that insurance is available 
                from the depository institution or an affiliate of the 
                depository institution.

                (ix) Restrictions requiring, when an application by a 
            consumer for a loan or other extension of credit from a 
            depository institution is pending, and insurance is offered 
            or sold to the consumer or is required in connection with 
            the loan or extension of credit by the depository 
            institution or any affiliate thereof, that a written 
            disclosure be provided to the consumer or prospective 
            customer indicating that the customer's choice of an 
            insurance provider will not affect the credit decision or 
            credit terms in any way, except that the depository 
            institution may impose reasonable requirements concerning 
            the creditworthiness of the insurer and scope of coverage 
            chosen.
                (x) Restrictions requiring clear and conspicuous 
            disclosure, in writing, where practicable, to the customer 
            prior to the sale of any insurance policy that such policy--
                    (I) is not a deposit;
                    (II) is not insured by the Federal Deposit Insurance 
                Corporation;
                    (III) is not guaranteed by any depository 
                institution or, if appropriate, an affiliate of any such 
                institution or any person soliciting the purchase of or 
                selling insurance on the premises thereof; and
                    (IV) where appropriate, involves investment risk, 
                including potential loss of principal.

                (xi) Restrictions requiring that, when a customer 
            obtains insurance (other than credit insurance or flood 
            insurance) and credit from a depository institution, or any 
            affiliate of such institution, or any person soliciting the 
            purchase of or selling insurance on the premises thereof, 
            the credit and insurance transactions be completed through 
            separate documents.
                (xii) Restrictions prohibiting, when a customer obtains 
            insurance (other than credit insurance or flood insurance) 
            and credit from a depository institution or an affiliate of 
            such institution, or any person soliciting the purchase of 
            or selling insurance on the premises thereof, inclusion of 
            the expense of insurance premiums in the primary credit 
            transaction without the express written consent of the 
            customer.
                (xiii) Restrictions requiring maintenance of separate 
            and distinct books and records relating to insurance 
            transactions, including all files relating to and reflecting 
            consumer complaints, and requiring that such insurance books 
            and records be made available to the appropriate State 
            insurance regulator for inspection upon reasonable notice.

        (C) Limitations

            (i) OCC deference

                Section 6714(e) of this title does not apply with 
            respect to any State statute, regulation, order, 
            interpretation, or other action regarding insurance sales, 
            solicitation, or cross marketing activities described in 
            subparagraph (A) that was issued, adopted, or enacted before 
            September 3, 1998, and that is not described in subparagraph 
            (B).
            (ii) Nondiscrimination

                Subsection (e) of this section does not apply with 
            respect to any State statute, regulation, order, 
            interpretation, or other action regarding insurance sales, 
            solicitation, or cross marketing activities described in 
            subparagraph (A) that was issued, adopted, or enacted before 
            September 3, 1998, and that is not described in subparagraph 
            (B).
            (iii) Construction

                Nothing in this paragraph shall be construed--
                    (I) to limit the applicability of the decision of 
                the Supreme Court in Barnett Bank of Marion County N.A. 
                v. Nelson, 517 U.S. 25 (1996) with respect to any State 
                statute, regulation, order, interpretation, or other 
                action that is not referred to or described in 
                subparagraph (B); or
                    (II) to create any inference with respect to any 
                State statute, regulation, order, interpretation, or 
                other action that is not described in this paragraph.

              (3) Insurance activities other than sales

        State statutes, regulations, interpretations, orders, and other 
    actions shall not be preempted under paragraph (1) to the extent 
    that they--
            (A) relate to, or are issued, adopted, or enacted for the 
        purpose of regulating the business of insurance in accordance 
        with the Act entitled ``An Act to express the intent of Congress 
        with reference to the regulation of the business of insurance'' 
        and approved March 9, 1945 (15 U.S.C. 1011 et seq.) (commonly 
        referred to as the ``McCarran-Ferguson Act'');
            (B) apply only to persons that are not depository 
        institutions, but that are directly engaged in the business of 
        insurance (except that they may apply to depository institutions 
        engaged in providing savings bank life insurance as principal to 
        the extent of regulating such insurance);
            (C) do not relate to or directly or indirectly regulate 
        insurance sales, solicitations, or cross marketing activities; 
        and
            (D) are not prohibited under subsection (e) of this section.

            (4) Financial activities other than insurance

        No State statute, regulation, order, interpretation, or other 
    action shall be preempted under paragraph (1) to the extent that--
            (A) it does not relate to, and is not issued and adopted, or 
        enacted for the purpose of regulating, directly or indirectly, 
        insurance sales, solicitations, or cross marketing activities 
        covered under paragraph (2);
            (B) it does not relate to, and is not issued and adopted, or 
        enacted for the purpose of regulating, directly or indirectly, 
        the business of insurance activities other than sales, 
        solicitations, or cross marketing activities, covered under 
        paragraph (3);
            (C) it does not relate to securities investigations or 
        enforcement actions referred to in subsection (f) of this 
        section; and
            (D) it--
                (i) does not distinguish by its terms between depository 
            institutions, and affiliates thereof, engaged in the 
            activity at issue and other persons engaged in the same 
            activity in a manner that is in any way adverse with respect 
            to the conduct of the activity by any such depository 
            institution or affiliate engaged in the activity at issue;
                (ii) as interpreted or applied, does not have, and will 
            not have, an impact on depository institutions, or 
            affiliates thereof, engaged in the activity at issue, or any 
            person who has an association with any such depository 
            institution or affiliate, that is substantially more adverse 
            than its impact on other persons engaged in the same 
            activity that are not depository institutions or affiliates 
            thereof, or persons who do not have an association with any 
            such depository institution or affiliate;
                (iii) does not effectively prevent a depository 
            institution or affiliate thereof from engaging in activities 
            authorized or permitted by this Act or any other provision 
            of Federal law; and
                (iv) does not conflict with the intent of this Act 
            generally to permit affiliations that are authorized or 
            permitted by Federal law.

(e) Nondiscrimination

    Except as provided in any restrictions described in subsection 
(d)(2)(B) of this section, no State may, by statute, regulation, order, 
interpretation, or other action, regulate the insurance activities 
authorized or permitted under this Act or any other provision of Federal 
law of a depository institution, or affiliate thereof, to the extent 
that such statute, regulation, order, interpretation, or other action--
        (1) distinguishes by its terms between depository institutions, 
    or affiliates thereof, and other persons engaged in such activities, 
    in a manner that is in any way adverse to any such depository 
    institution, or affiliate thereof;
        (2) as interpreted or applied, has or will have an impact on 
    depository institutions, or affiliates thereof, that is 
    substantially more adverse than its impact on other persons 
    providing the same products or services or engaged in the same 
    activities that are not depository institutions, or affiliates 
    thereof, or persons or entities affiliated therewith;
        (3) effectively prevents a depository institution, or affiliate 
    thereof, from engaging in insurance activities authorized or 
    permitted by this Act or any other provision of Federal law; or
        (4) conflicts with the intent of this Act generally to permit 
    affiliations that are authorized or permitted by Federal law between 
    depository institutions, or affiliates thereof, and persons engaged 
    in the business of insurance.

(f) Limitation

    Subsections (c) and (d) of this section shall not be construed to 
affect--
        (1) the jurisdiction of the securities commission (or any agency 
    or office performing like functions) of any State, under the laws of 
    such State--
            (A) to investigate and bring enforcement actions, consistent 
        with section 77r(c) of this title, with respect to fraud or 
        deceit or unlawful conduct by any person, in connection with 
        securities or securities transactions; or
            (B) to require the registration of securities or the 
        licensure or registration of brokers, dealers, or investment 
        advisers (consistent with section 80b-3a of this title), or the 
        associated persons of a broker, dealer, or investment adviser 
        (consistent with such section 80b-3a of this title); or

        (2) State laws, regulations, orders, interpretations, or other 
    actions of general applicability relating to the governance of 
    corporations, partnerships, limited liability companies, or other 
    business associations incorporated or formed under the laws of that 
    State or domiciled in that State, or the applicability of the 
    antitrust laws of any State or any State law that is similar to the 
    antitrust laws if such laws, regulations, orders, interpretations, 
    or other actions are not inconsistent with the purposes of this Act 
    to authorize or permit certain affiliations and to remove barriers 
    to such affiliations.

(g) Definitions

    For purposes of this section, the following definitions shall apply:

                            (1) Affiliate

        The term ``affiliate'' means any company that controls, is 
    controlled by, or is under common control with another company.

                         (2) Antitrust laws

        The term ``antitrust laws'' has the meaning given the term in 
    subsection (a) of section 12 of this title, and includes section 45 
    of this title (to the extent that such section 45 relates to unfair 
    methods of competition).

                     (3) Depository institution

        The term ``depository institution''--
            (A) has the meaning given the term in section 1813 of title 
        12; and
            (B) includes any foreign bank that maintains a branch, 
        agency, or commercial lending company in the United States.

                             (4) Insurer

        The term ``insurer'' means any person engaged in the business of 
    insurance.

                              (5) State

        The term ``State'' means any State of the United States, the 
    District of Columbia, any territory of the United States, Puerto 
    Rico, Guam, American Samoa, the Trust Territory of the Pacific 
    Islands, the Virgin Islands, and the Northern Mariana Islands.

(Pub. L. 106-102, title I, Sec. 104, Nov. 12, 1999, 113 Stat. 1352.)

                       References in Text

    The McCarran-Ferguson Act, referred to in subsecs. (a) and 
(d)(3)(A), is act Mar. 9, 1945, ch. 20, 59 Stat. 33, which is classified 
generally to chapter 20 (Sec. 1011 et seq.) of this title. For complete 
classification of this Act to the Code, see Short Title note set out 
under section 1011 of this title and Tables.
    This Act, referred to in subsecs. (c)(1), (d)(1), (4)(D)(iii), (iv), 
(e), and (f)(2), is Pub. L. 106-102, Nov. 12, 1999, 113 Stat. 1338, 
known as the Gramm-Leach-Bliley Act. For complete classification of this 
Act to the Code, see Short Title of 1999 Amendment note set out under 
section 1811 of Title 12, Banks and Banking, and Tables.
    Section 106 of the Bank Holding Company Act Amendments of 1970, 
referred to in subsec. (d)(2)(B)(viii)(I), is Pub. L. 91-607, title I, 
Sec. 106, Dec. 31, 1970, 84 Stat. 1766, as amended, which is classified 
generally to chapter 22 (Sec. 1971 et seq.) of Title 12, Banks and 
Banking.

          Termination of Trust Territory of the Pacific Islands

    For termination of Trust Territory of the Pacific Islands, see note 
set out preceding section 1681 of Title 48, Territories and Insular 
Possessions.

                  Section Referred to in Other Sections

    This section is referred to in sections 6711, 6713, 6715, 6805 of 
this title; title 12 section 1844.
