[§412:5-205.6] Requirements of banks engaging in insurance activities. [For effective date, see note below.] (a) Pursuant to section 412:5-205.5 a bank may engage in insurance underwriting if the following requirements are met:

(1) The insurance underwriting activities shall be conducted in a separately capitalized subsidiary of the bank or affiliate of its bank holding company;

(2) A bank or the bank holding company that controls an insurance underwriting subsidiary shall be subject to article 11, chapter 431, relating to insurance company holding systems;

(3) The name of the insurance underwriting subsidiary or affiliate and any assumed business name used by it shall not be identical to that of the bank;

(4) The logo of the insurance underwriting subsidiary or affiliate shall not be identical to that of the bank; and

(5) In no event shall any liabilities or losses associated with the banking activities of the bank be recoverable through the Hawaii Insurance Guaranty Association, the Hawaii Life and Disability Insurance Guaranty Association, or the insurance guaranty fund of another state.

(b) Pursuant to section 412:5-205.5, a bank may engage in insurance sales through an independent insurance agent or agency under contract. In addition, a bank may engage in insurance sales pursuant to section 412:5-205.5, either directly in any department or division of the bank or through a subsidiary or affiliate of the bank, if the following requirements are met:

(1) The bank is prohibited from offering insurance products at teller stations;

(2) An agent of the bank or of its subsidiary or affiliate engaged in selling insurance in this State pursuant to section 412:5-205.5 shall be licensed in accordance with article 9, chapter 431;

(3) The bank or its insurance affiliate or subsidiary shall be subject to article 13, chapter 431, relating to unfair practices;

(4) The bank or its insurance affiliate or subsidiary shall prominently disclose in writing to customers solicited to purchase non-credit insurance that the insurance offered or sold:

(A) Is not a deposit;

(B) Is not insured by the Federal Deposit Insurance Corporation; and

(5) The bank or its insurance affiliate or subsidiary shall disclose in writing to customers solicited to purchase annuities that annuities offered or sold when appropriate, involve investment risk, including potential loss of principal.

(c) Upon receipt of the commissioner's approval under section 412:5-205.5, the bank or its subsidiary or affiliate shall obtain any necessary approvals from the insurance commissioner required under chapter 431 and any insurance administrative rules adopted under chapter 431 or the applicable insurance and banking laws of any jurisdiction other than this State in which the bank will be conducting its insurance and annuity activities. [L 1996, c 225, pt of §1]