Background
Recent changes in Massachusetts' law now make it permissible for Massachusetts-chartered banks and certain other lenders such as small loan companies and mortgage lenders to engage in the sale of insurance products. The solicitation and sale of insurance by banks may only be conducted by licensed personnel of the institution to the extent required by applicable insurance laws and regulations.
Both the banking and insurance regulators are responsible for ensuring that banks and lenders that engage in insurance sales do so in full compliance with applicable licensing and consumer protection laws and regulations.
The law granting banks the authority to engage in the sale of insurance products also provides important consumer protections relative to the sale of insurance.
Additional Resources
What to know
Banks may not tie the availability or extension of credit by the bank to the purchase of insurance products from the bank.
Written disclosures are required to be given to potential insurance customers which make it clear that insurance products available through the bank are not deposits of the bank; are not protected by the Federal Deposit Insurance Corporation (FDIC) or other type of deposit insurance; and are not obligations of or guaranteed by the bank and may be subject to risk.
Banks are required to disclose that any insurance required as a condition of credit need not be purchased from the bank but may be purchased from a source of the customer's choice.
Procedures must be in place to properly safeguard customer confidential information.
Customers must be informed that complaints may be filed with the Massachusetts Office of Consumer Affairs and Business Regulation (OCABR).
Additional Resources
Consumer complaint resolutions
Banks are required to adopt consumer complaint resolution procedures and to designate personnel who will be responsible for the enforcement of these procedures. Banks must forward all customer complaints to the OCABR and must take reasonable steps to investigate all customer complaints. Banks must also make a good faith effort to resolve complaints in a timely manner.
Additional Resources
What to do if you have a complaint
If an insurance-related problem cannot be solved initially through direct contact with the bank, a consumer should contact OCABR.
After an initial review, this office will refer the complaint to either the Division of Banks (DOB) or the DOI. In the complaint the consumer should state why he or she believes there is a problem, the steps taken to resolve the dispute, and the bank or company's response. Attach copies of any letters, documents, contracts, or receipts pertinent to the complaint. Do not send original documents. Please include the type of insurance policy, dates of transactions, correspondence received, etc. Also, be sure to include the full names, titles, addresses, and telephone numbers of any bank or insurance company employees dealt with.
Each Division will make every effort to bring about a satisfactory resolution to complaints in a timely manner. Occasionally, a resolution may not lie within the jurisdiction of either Division. If this is the case, a consumer may be advised to seek an attorney, to sue in Small Claims Court, or to seek a response from another agency.