ENGROSSED
Senate Bill No. 268
(By Senators Helmick, Ross, McKenzie,
Fanning, Prezioso, Kessler and Sprouse)
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[Introduced January 30, 1998; referred to
the Committee on Banking and Insurance.]
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A BILL to amend and reenact section thirteen, article four,
chapter thirty-one-a of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, relating to
providing West Virginia state-chartered banks authority and
parity with national banks in the marketing and sale of
insurance and annuities.
Be it enacted by the Legislature of West Virginia:
That section thirteen, article four, chapter thirty-one-a of
the code of West Virginia, one thousand nine hundred thirty-one,
as amended, be amended and reenacted to read as follows:
ARTICLE 4. BANKING INSTITUTIONS AND SERVICES GENERALLY.
§31A-4-13. Powers of state banking institutions generally.
(a) Any state-chartered banking institution shall have and
exercise all of the powers necessary for, or incidental to, the
business of banking, and without limiting or restricting such
general powers, it shall have the right to buy or discount
promissory notes and bonds, negotiate drafts, bills of exchange
and other evidences of indebtedness, borrow money, receive
deposits on such terms and conditions as its officers may
prescribe, buy and sell, exchange, bank notes, bullion or coin,
loan money on personal or other security, rent safe-deposit boxes
and receive on deposit, for safekeeping, jewelry, plate, stocks,
bonds and personal property of whatsoever description and provide
customer services incidental to the business of banking,
including, but not limited to, the issuance and servicing of and
lending money by means of credit cards as letters of credit or
otherwise. Any state-chartered banking institution may accept,
for payment at a future date, not to exceed one year, drafts
drawn upon it by its customers. Any state-chartered banking
institution may issue letters of credit, with a specified
expiration date or for a definite term, authorizing the holders
thereof to draw drafts upon it or its correspondents, at sight or
on time. Any such banking institution may organize, acquire,
own, operate, dispose of and otherwise manage wholly owned
subsidiary corporations for purposes incident to the banking
powers and services authorized by this chapter.
(b) Any state-chartered banking institution may acquire,
own, hold, use and dispose of real estate, which shall in no case
be carried on its books at a value greater than the actual cost:
Provided, That such property shall be necessary for the
convenient transaction of its business, including any buildings,
office space or other facilities to rent as a source of income:
Provided, however, That such investment hereafter made shall not
exceed sixty-five percent of the amount of its capital stock and
surplus, unless the consent in writing of the commissioner of
banking is first secured.
(c) Any state-chartered banking institution may acquire,
own, hold, use and dispose of real estate, which shall be carried
on its books at the lower of fair value or cost as defined in
rules promulgated by the commissioner of banking, subject to the
following limitations:
(1) Such as shall be mortgaged to it in good faith as
security for debts in its favor;
(2) Such as shall be conveyed to it in satisfaction of debts
previously contracted in the course of its business dealings; and
(3) Such as it shall purchase at sales under judgments,
decrees, trust deeds or mortgages in its favor, or shall purchase
at private sale, to secure and effectuate the payment of debts
due to it.
(d) The value at which any real estate is held shall not be increased by the addition thereto of taxes, insurance, interest,
ordinary repairs or other charges which do not materially enhance
the value of the property.
(e) Any real estate acquired by any such banking institution
under subdivisions (2) and (3), subsection (c) of this section
shall be disposed of by the banking institution at the earliest
practicable date, but the officers thereof shall have a
reasonable discretion in the matter of the time to dispose of
such property in order to save the banking institution from
unnecessary losses:
Provided, That in every case such property
shall be disposed of within ten years from the time it is
acquired by the banking institution, unless an extension of time
is given in writing by the commissioner of banking.
(f) The sale of
annuities insurance by state-chartered
banking institutions shall be subject to the following:
Any state-chartered banking institution having its main or
a branch office in any place the population of which does not
exceed five thousand inhabitants, as shown by the last preceding
decennial census, through its employees or agents, may, from that
place or office, directly or through a controlled subsidiary, act
as agent for any fire, life, casualty, liability or other
insurance company authorized by the authorities of the state to
do business in this state, by soliciting and selling insurance
and collecting premiums on policies issued by such company; and may receive for services so rendered all permissible fees or
commissions as may be agreed upon between the bank and the
insurance company for which it may act as agent:
Provided, That
no such bank shall in any case assume or guarantee the payment on
insurance policies issued through its agency by its principal:
Provided, however, That the bank shall not guarantee the truth of
any statement made by an insured in filing his, her or its
application for insurance. For purposes of this section, a
"controlled subsidiary" is one in which the state-chartered
banking institution owns at least eighty percent of all classes
of stock. This provision is intended to give state-chartered
banking institutions parity with national banks operating in this
state with regard to the marketing and sale of insurance
notwithstanding the prohibitions and limitations contained in
article eight-c or elsewhere in this chapter, and shall be
construed consistently with interpretations of 12 U.S.C. §92, the
regulations promulgated thereunder, and any successor legislation
or regulations.
(g) Any state-chartered banking institution may, through its
employees or agents, market and sell, as agent, annuities, either
at its main office or at any of its branches. The marketing and
sale of annuities may be made by the bank, through its employees
or agents, directly or through a controlled subsidiary, as
defined in subsection (f) above. This provision is intended to give state-chartered banks parity with national banks operating
in this state with regard to the sale of annuities,
notwithstanding the prohibitions and limitations contained in
article eight-c or elsewhere in this chapter.
(h) Unless waived in writing by the commissioner, a state- chartered bank may not invest or otherwise expend in excess of
ten percent of its capital and surplus calculated at the end of
the previous calendar year on the activities permitted by
subsections (f) and (g) of this section on an aggregate basis
together with any of its approved financially related products
and services. For purposes of this section, approved financially
related products and services means those products and services
offered by a state-chartered bank pursuant to an approved
application submitted under article eight-c of this chapter.
(i) The commissioner shall promulgate rules in accordance
with chapter twenty-nine-a of this code relating to the sale of
insurance or annuities, including, but not limited to, rules
requiring notice of the intention to engage in such activities
and relating to the policies and procedures state-chartered
banking institutions should adopt in connection with such
activities.
(j) Any state-chartered banking institution and its
employees or agents engaged in the sale of insurance or annuities
permitted hereby must also comply with all applicable requirements for the sale of such products imposed by the West
Virginia commissioner of insurance and by any state or federal
securities regulator.
(k) No state-chartered banking institution shall hereafter
invest more than twenty percent of the amount of its capital and
surplus in furniture and fixtures, whether the same be installed
in a building owned by such banking institution, or in quarters
leased by it, unless the consent in writing of the commissioner
of banking is first secured.