Table
of Contents:
Section
1. Authority
Section
2. Purpose
Section
3. Definitions
Section
4. Regulatory Authority
Section
5. Licensure Requirement
Section
6. Separate Transactions, Records and Documents
Section
7. Extensions of Credit
Section
8. Insurance and Financial Institution Products
Section
9. Rebating and Discounting
Section
10. Discrimination
Section
11. Disclosure
Section
12. Misleading Advertising
Section
13. Commissions and Compensation
Section
14. Confidential Customer Information
Section
15. Severability
Section
16. Effective Date
Section 1. Authority
This Regulation is promulgated by the Commissioner of Insurance pursuant to the authority granted to him by Miss. Code Ann. 25-43-1 et seq., 83-5-1 and 83-17-211, and is promulgated in accordance with Mississippi Department of Insurance Regulation No. 88-101, said regulation being the Rules of Practice and Procedure before the Mississippi Department of Insurance.
Section 2. Purpose
The purpose of this regulation is to provide guidelines under which financial institutions may sell insurance in the State of Mississippi and to protect the interests of the insurance policyholders of this state.
Section 3. Definitions
(B)
The term "insurance" includes all products defined or regulated as insurance
by Title 83, Mississippi Code of
1972, except:
(1) Credit property as
defined in Miss. Code Ann. 83-17-1, credit life, accident and health; credit
involuntary unemployment insurance, mortgage life; and mortgage accident
and health;
(2) Insurance placed by
a financial institution in connection with collateral pledged as security
for a
loan when the debtor breaches the contractual obligation to provide that
insurance;
(3) Private mortgage insurance;
(4) Land Title; and
(5) Travel Accident and Baggage.
(C)
The term "loan" means an agreement to lend money or to finance goods or
services. The term "loan" does not
include the financing of insurance premiums, loans made by broker-dealers
registered in accordance with
applicable State and Federal securities laws that are wholly collateralized
by securities, or a loan from the cash
value of an insurance policy.
(D)
The terms "agent" and "agency" shall include all persons or entities as
defined by Title 83, Mississippi Code of
1972.
(E)
The term "person" shall include any natural person, partnership, corporation,
association, unincorporated
organization, or other form of business enterprise, plural or singular,
as the case demands.
All financial institutions that are authorized to engage in the solicitation and sale of insurance products are subject to the insurance laws of the State of Mississippi and all other regulations of the Mississippi Department of Insurance and other applicable provisions of law.
Section 5. Licensure Requirement
Solicitation for the purchase or sale of any insurance products shall be conducted only by persons or entities who have complied with all applicable state insurance licensing, appointment laws and regulations and who have been issued an agent or broker's license pursuant to Miss. Code Ann. 83-17-1, et seq. However, employees of financial institutions who are not licensed as an agent or broker may make referrals of financial institution customers or prospects to licensed agents and receive a one-time nominal fee per referral of a fixed dollar amount for each customer consistent to referral fees received in other non-deposit investment products. The term "nominal fee" means an amount not to exceed Twenty Dollars ($20.00). The payment of this referral fee cannot depend on whether the referral results in the sale or issuance of an insurance product or service.
Section 6. Separate Transactions, Records and Documents
It is strongly recommended that insurance sales activities be conducted through separate divisions or subsidiaries. However, whether the financial institution obtains an agency license or operates through a subsidiary, division or affiliated agency, separate records must be maintained for all insurance transactions distinct from any other activities in connection with a loan or other credit transaction. These records shall be made available to the Mississippi Department of Insurance for inspection. The credit and insurance transactions must be completed separately and through separate documents.
Section 7. Extensions of Credit
No person shall delay or impede the completion of a loan transaction or other transactions involving the extension of credit for the purpose of influencing a customer to purchase insurance from them or through any affiliated entity.
Section
8. Insurance and Financial Institution Products
(B)
A financial institution that offers banking products or services in conformity
with the provisions of 106 of the
Bank Holding Company Act Amendments of 1970 (12 U.S.C. 1972), shall be
deemed to be in compliance
with the provisions of subsection (A) of this section.
(C)
No person shall require that a customer or prospective customer purchase
an insurance product from any
particular insurance agent as a condition for the lending of money or extension
of credit, the establishment or
maintenance of a checking, savings, or other deposit account, the establishment
or maintenance of a trust
account, or the provision of services related to any such activities.
(D)
No person may offer an insurance product in combination with banking products
unless the insurance products
and banking products are available separately.
(E)
No person may include the expense of insurance premiums in the primary
credit transaction without the express
written consent of the customer.
(B)
No person may offer a discount on a loan or extension of credit for the
purpose of inducing the customer to
purchase insurance required in connection with the loan or extension of
credit.
No financial institution may:
(B)
In connection with a loan or extension of credit that requires a borrower
to obtain insurance, reject an insurance
policy solely because the policy has been issued or underwritten by any
person who is not associated with a
particular entity;
(C)
Impose any requirement or additional charge for any insurance purchased
from an agent who is not associated
with a financial institution that is not imposed on any insurance agent
who is associated with the financial
institution.
(1) Is not a deposit;
(2) Is not insured by the
Federal Deposit Insurance Corporation, or in the case of a credit union,
by
the National Credit Union Share Insurance Fund;
(3) Is not guaranteed by
the insured financial institution or an affiliated insured depository institution;
and
(4) Where appropriate, involves investment risk, including potential loss of principal.
(B)
Any financial institution that requires a customer to obtain insurance
in connection with a loan or other extension
of credit and that offers insurance either directly or through an affiliate
shall clearly disclose to the customer their
choice of insurance provider will not affect the decision of the financial
institution in extending credit to the
customer.
(C)
Any person required under subsections (A) or (B) of this section to make
disclosures to a customer shall obtain
a written acknowledgment of receipt by the customer of such disclosures,
including the date of receipt and the
customer's name and address, prior to or at the time of the execution of
any application for insurance sold by
the person. Such acknowledgment shall be in a separately executed document
or in a separately signed
section of the application for insurance. The acknowledgment required by
this paragraph shall not be required
if an executed application for insurance or other document by which the
customer applies for insurance is not
submitted in writing or is not executed by the customer.
No person may employ any advertisement that would mislead or otherwise cause a reasonable person to believe mistakenly that the State of Mississippi or the federal government is responsible for the insurance sales activities of the financial institution or stands behind the financial institution's credit, or that the financial institution, the State of Mississippi, or the federal government guarantees any returns on insurance products or is a source of payment of any insurance obligation of or sold by the financial institution.
Section 13. Commissions and Compensation
No person shall pay directly or indirectly, any commission, service fee, brokerage or other valuable consideration to any person for services as an insurance agent, unless the person performing the service holds a valid license for the class of insurance as to which the service is rendered. No person or agency shall accept any commission, service fee, brokerage or other valuable consideration for such services unless properly licensed in accordance with the Mississippi Department of Insurance. However, referral fees as provided in Section 5 are authorized.
Section 14. Confidential Customer Information
(B) Subsection (A) of this section shall not apply to:
(1) Names, addresses and telephone numbers derived
in any manner from the financial institution's
records; or
(2) The release of insurance information as otherwise authorized or prohibited by State or federal law.
(C)
A financial institution shall not require premium information when requiring
evidence of insurance in connection
with a loan or extension of credit and shall not use such premium information
for the purpose of soliciting
insurance without the written consent of the customer.
(D)
A financial institution may not use health information obtained from a
customer's insurance records for any
purpose other than for its own activities pursuant to this Code.
If any provision of any section of this regulation or the application thereof to any circumstance or person or entity is held invalid, such invalidity shall not affect any other provision of that section or application of the regulation which can be given effect without the invalid provision or application, and to this end the provisions of this regulation are declared to be severable.
Section 16. Effective Date
This regulation shall become effective March 31, 1999.