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Letter 7: Credit Life Insurance

The following resolution pertaining to the sale of credit life, health and accident insurance sold by banks in connection with loans was adopted by the Banking Review Board in meeting May 9, 1969, as a department directive:

Credit Life, Health and Accident Insurance sold in connection with loans is directly related to the business of banking. In order to eliminate the possibility of a conflict of interest the commissions on the sale of such insurance must be paid to the bank.

The sale of other forms of insurance or brokerage of real estate by an officer of employe of a state bank may be carried on only after authorization of the Board of Directors, duly recorded in the minutes of the meeting of the Board of Directors.

Directors may require the officer to submit such records of income producing activity as they deem necessary.

Bkg. Ltr. #7, May 12, 1969, Commissioner Heironimus