Sec. 38a-775. (Formerly Sec. 38-72a). Sale of annuities or insurance by banks, out-of-state banks or their subsidiaries. Sale by licensed insurance producers of annuities or insurance recommended or s
Sec. 38a-775. (Formerly Sec. 38-72a). Sale of annuities or insurance by banks,
out-of-state banks or their subsidiaries. Sale by licensed insurance producers of
annuities or insurance recommended or sponsored by or on the premises of banks,
out-of-state banks or their subsidiaries. (a) As used in this section:
(1) "Bank" has the same meaning as set forth in section 36a-2, but does not include
a trust company that does not accept federally insured deposits and does not engage in
insurance sales or solicitation activities, either directly or indirectly through a third-party
marketing organization, that would require such trust company to obtain an insurance
producer's license under the laws of this state;
(2) "Out-of-state bank" has the same meaning as set forth in section 36a-2, provided
the institution (A) maintains in this state a branch, as defined in section 36a-410, or (B)
engages in insurance sales or solicitation activities, either directly or indirectly through
a third-party marketing organization, that would require the institution to obtain an
insurance producer's license under the laws of this state, but does not include a trust
company that does not accept federally insured deposits and does not engage in insurance
sales or solicitation activities, either directly or indirectly through a third-party marketing organization, that would require such trust company to obtain an insurance producer's license under the laws of this state;
(3) "Subsidiary" has the same meaning as set forth in section 36a-2;
(4) "Insurance" has the same meaning as set forth in section 38a-1, but does not
include title insurance;
(5) "Customer" means any person who establishes a deposit, trust, investment, loan
or credit account with a bank, out-of-state bank or subsidiary of such bank or out-of-state bank;
(6) "Insurance information" means copies of, or the information contained in, insurance policies, binders, rates, declaration pages and expiration dates that are acquired by
a bank, out-of-state bank or subsidiary of such bank or out-of-state bank in connection
with its lending activities; and
(7) "Insurance producer" has the same meaning as set forth in section 38a-702a.
(b) Any bank, out-of-state bank or subsidiary of such bank or out-of-state bank
engaged in the sale of annuities or life insurance in this state, or any licensed insurance
producer that sells annuities or life insurance recommended or sponsored by or on the
premises in this state of a bank, out-of-state bank or subsidiary of such bank or out-of-state bank, shall disclose in writing prior to or at the time an annuity or life insurance
product is purchased, in any advertisement or promotional material soliciting sales of
annuities or life insurance products, and orally during any sales presentation, that any
annuity or life insurance product offered, recommended, sponsored or sold (1) is not a
deposit, (2) is not insured by the Federal Deposit Insurance Corporation, (3) is not
guaranteed by the bank or out-of-state bank, and (4) where appropriate, involves investment risk, including potential loss of principal. Any bank, out-of-state bank or subsidiary
of such bank or out-of-state bank that does not accept insured deposits shall not be
required to provide the disclosures required by subdivisions (1), (2) and (3) of this
subsection.
(c) (1) No bank, out-of-state bank or subsidiary of such bank or out-of-state bank
engaged in the sale of annuities or insurance in this state, and no licensed insurance
producer that sells annuities or insurance recommended or sponsored by or on the premises in this state of a bank, out-of-state bank or subsidiary of such bank or out-of-state
bank, may require or imply that a customer or prospective customer must purchase an
annuity or insurance policy from such bank, out-of-state bank or subsidiary of such bank
or out-of-state bank as a condition to receiving any other product or service offered by
such bank, out-of-state bank or subsidiary of such bank or out-of-state bank. For purposes of this subdivision, "other product or service" does not include financing in connection with insurance products being offered or sold.
(2) Any bank, out-of-state bank or subsidiary of such bank or out-of-state bank that
makes loans or other extensions of credit and engages in the sale of insurance in this
state, or any licensed insurance producer that sells annuities or insurance recommended
or sponsored by or on the premises in this state of a bank, out-of-state bank or subsidiary
of such bank or out-of-state bank, shall disclose to customers, in connection with a loan
or other extension of credit where insurance is offered by such bank, out-of-state bank
or subsidiary of such bank or out-of-state bank, that insurance may be purchased from
an insurance producer of the customer's choice and that the customer's choice of another
insurance producer shall not affect the credit decision of the bank, out-of-state bank or
subsidiary of such bank or out-of-state bank. For purposes of this subdivision, "loan or
extension of credit" does not include financing in connection with insurance products
being offered or sold.
(3) If any insurance, other than credit life and disability insurance, is required as a
condition of obtaining a loan from any bank, out-of-state bank or subsidiary of such
bank or out-of-state bank that makes loans or other extensions of credit and engages in
the sale of insurance in this state, the credit transaction and the insurance transaction
shall be completed independently and through separate documents.
(d) (1) No bank, out-of-state bank or subsidiary of such bank or out-of-state bank
engaged in the sale of annuities or insurance in this state may provide any financial
records, as defined in section 36a-41, to any person for the purpose of selling annuities
or insurance without the prior written consent of the customer to whom such financial
records pertain.
(2) No bank, out-of-state bank or subsidiary of such bank or out-of-state bank engaged in the sale of annuities or insurance in this state may use any insurance information
to solicit or sell insurance to customers, or provide any insurance information to a third
party in connection with the third party's solicitation or sale of insurance to customers,
without the prior written consent of the customer to whom such insurance information
pertains.
(e) The Insurance Commissioner, in consultation with the Banking Commissioner,
may adopt regulations, in accordance with chapter 54, to carry out the provisions of this
section. Nothing in this section shall be construed to limit the regulatory jurisdiction of
the Insurance Commissioner over the sale of insurance in this state.
(P.A. 73-264, S. 1-3; P.A. 77-614, S. 163, 610; P.A. 80-256, S. 1; 80-482, S. 285, 345, 348; P.A. 90-243, S. 30; P.A.
93-236, S. 6; P.A. 96-39, S. 2, 3; P.A. 97-317, S. 3, 4; P.A. 01-113, S. 28, 42; P.A. 03-84, S. 29.)
History: P.A. 77-614 placed insurance commissioner within the department of business regulation and made insurance
department a division within that department, effective January 1, 1979; P.A. 80-256 inserted new Subsec. (c), relettering
former Subsec. (c) accordingly; P.A. 80-482 restored insurance commissioner and division to prior independent status and
abolished the department of business regulation; P.A. 90-243 referenced the definition of "affiliate" as defined in the
general definition section and made technical corrections for statutory consistency; Sec. 38-72a transferred to Sec. 38a-775 in 1991; P.A. 93-236 amended Subsec. (c) to authorize the licensing and sale of life insurance by certain nonbank
banks; P.A. 96-39 inserted new Subsec. (d) re annuity sales to let the commissioner license banks and their affiliates,
officers and employees, and to require the commissioner to adopt prescribed regulations, relettering existing Subsec. as
(e), effective May 2, 1996; P.A. 97-317 replaced former provisions with new Subsecs. (a) to (e), inclusive, re sale of
annuities or insurance by or on the premises of banks, out-of-state banks or their subsidiaries, effective July 8, 1997; P.A.
01-113 amended definition of "insurance producer" in Subdiv. (a)(7) to substitute "section 38a-702a" for "section 38a-702", effective September 1, 2002; P.A. 03-84 changed "Commissioner of Banking" to "Banking Commissioner" in
Subsec. (e), effective June 3, 2003.
Annotations to former section 38-72a:
Grandfather clauses of statute do not impose requirement of "continuous licensure". 209 C. 175.