Senate Bill No. 58
(By Senators Wooton, Dittmar, Deem, Ball, Anderson, Kimble,
Ross, Sharpe, Bowman, Sprouse, Buckalew, Love, Schoonover,
McKenzie, Walker and Snyder)
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[Introduced February 18, 1997; 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-aof 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
annuities and insurance.
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 two and three of 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) Any state-chartered banking institution having its main
or a branch office in any place the population 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 the company. It
may, additionally, receive for services rendered, all permissible
fees or commissions as may be agreed upon between the bank and
the insurance company for which it acts as agent: Provided, That
no bank may assume or guarantee the payment on insurance policies
issued through its agency by its principal: Provided, however,
That the bank may not guarantee the truth of any statement made
by an insured in filing his or her 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 subsection 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. It shall, additionally, be construed consistently with
the provisions of 12 U.S.C.§92, as well as any regulations
promulgated thereunder, and any other applicable law or
regulations.
(g) Any state-chartered banking institution may, through its
employees or agents, market and sell, as an 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 and its employees directly or through a controlled subsidiary, as defined
in subsection (f) of this section. 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 any other provision to the contrary.
(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, as same is calculated at
the end of the previous calender year, on the activities
permitted by subsections (f) and (g) of this section, on an
aggregate basis together with any of its approved financial
products and financially-related services. For purposes of this
subsection, approved financial products and approved financially- related services means 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, as necessary, propose rules for
Legislative approval relating to the sale of insurance or
annuities, including, but not limited to, rules requiring notice
of the intention to engage in activities involving the offer and
sale of insurance or annuities and any procedures for which state
chartered banks are required to comply which are connected to
these activities. Any state chartered bank and its employees or
agents, engaged in the sale of insurance or annuities permitted hereby, shall comply with all applicable requirements imposed by
the insurance commissioner and by any state or federal
securities regulators.
(f)(j) 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.
NOTE: The purpose of this bill is to provide state chartered
banks parity with national banks in the sale and marketing of
annuities and insurance products in conformity with the policy
decision of the West Virginia Board of Banking and Financial
Institutions previously issued under the authority of W. Va. Code
31A-3-2(a)(5)(B).
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.
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