Clearing up GLB provisions

patbaker12

Condition 1 below seems to contradict 2 and 3:
1. Prohibits formation of national bank subsidiaries that sell insurance
2. Prohibits state actions that would prevent bank-related firms from selling insurance on the same basis as insurance producers
3. Separates the underwriting & marketing of insurance. Banks can market insurance sold by affiliates

It seems to me that the first condition above should be re-worded to, "Prohibits formation of national bank subsidiaries that underwrite insurance." Would that be a fair assumption?

graham

I went back to the Porter text and it does indeed agree with what you said:

• GLB prohibits national banks from forming subsidiaries to underwrite insurance.

Porter also says:

• GLB treats insurance underwriting differently from insurance sales and marketing.

But the answer to 2018.Spring.Q5 in the examiner's report uses term sell instead of underwrite which in light of the above seems to be inaccurate.

Thanks for pointing that out. I will edit the BattleCard answer for that question.

jcam

So the wiki says

PROHIBITS formation of insurance-selling subsidiaries by national banks
PROHIBITS preventing banks from selling insurance (states can't make laws to prevent banks from selling insurance)

These seem very close to contradictory.

So banks are prohibited by having subsidiaries that sell/underwrite insurance, but the banks themselves can sell insurance?

graham

That does seem close to contradictory but I double-checked the Porter text and that is exactly what it says. I suspect the actual legislation is very detailed and a thorough study of it would probably clear this up. That would be well beyond what you need to know for the exam however.

Here's an old exam problem on GLB (part a) and the answer is pretty much verbatim from the source text (and the wiki.)

• https://battleacts6us.ca/pdf/Exam_(2018_1-Spring)/(2018_1-Spring)_(05).pdf

I think if you just memorize that bullet point list, you're good to go on this topic.