What Legal Authority Is There For The Purchase of Life Insurance By National Banks, State Banks and Thrifts?
National Banks The authority for national banks to purchase life insurance is found in 12 USC 24 (seventh). The OCC has further delineated the scope of that authority through regulations, interpretive rulings and letters addressing the use of life insurance for purposes incidental to banking. One ruling is OCC 2004-56, which clarified that life insurance, can be purchased if it is convenient or useful in connection with the conduct of the bank’s business. This authority is subject to supervisory considerations. However, such life insurance holdings must be consistent with safe and sound banking practices. State Banks The authority for state banks to purchase life insurance is found in part 362 of FDIC’s regulations. Part 362 implements 12 USC 24 and limits purchases of life insurance to those permissible for national banks (i.e., those permissible under OCC 2004-56). Thrifts The authority for thrifts to purchase life insurance is found in Section 250 of the Regulatory Handbook of the O
