FDIC Consumer Protection in Bank Insurance Sales

Legal Authority

• 12 U.S.C. § 1819 — Federal Deposit Insurance Act: grants FDIC general authority to regulate insured depository institutions; basis for Part 343's regulation of insurance sales practices in banks
• Gramm-Leach-Bliley Act § 305 (Pub. L. 106-102, 1999): requires federal banking regulators and the SEC to jointly establish minimum consumer protection standards for insurance sales in banks; Part 343 is FDIC's implementation for state nonmember banks
• 12 CFR Part 343 — FDIC regulations implementing GLB Act § 305 consumer protection requirements for bank insurance and annuity sales

Key Mechanics

Part 343 establishes disclosure and sales practice standards for when banks sell insurance or annuities. The core requirements: banks must clearly disclose at the time of the sale that insurance products are (1) not FDIC insured; (2) not bank deposits or obligations; (3) not guaranteed by any federal government agency; and (4) may involve investment risk including possible loss of value. These "NCUA Approved" equivalents are colloquially known as the "RADV disclosures" (Risk, Agency, Deposit, Value). The rule also prohibits conditioning credit extension on the purchase of insurance and requires physical separation of insurance sales areas from deposit-taking areas where practicable.

Current Rule (2026)

What This Rule Does

Banks and their affiliates increasingly sell insurance products and annuities directly to retail customers — life insurance, homeowners insurance, annuities, and credit-life insurance — often in the same branch where customers hold FDIC-insured deposit accounts. This creates a consumer confusion risk: customers may not understand that insurance products sold by their bank are not federally insured, are not bank deposits, and may lose value.

12 CFR Part 343 establishes the FDIC's consumer protection requirements for retail insurance sales at FDIC-supervised state nonmember banks. It implements the interagency rule required by the Gramm-Leach-Bliley Act § 305, which mandated that all federal banking regulators issue parallel consumer protection rules for bank insurance sales. (The OCC's parallel rule is 12 CFR Part 14; the Federal Reserve's is 12 CFR Part 208.83.)

Key Provisions

• § 343.10 — Purpose and scope: protections apply to retail sales, solicitations, advertising, or offers of any insurance product or annuity by FDIC-supervised institutions or their affiliates to a retail customer at any office of, or on behalf of, the institution
• § 343.20 — Definitions: "Insurance product" means any product regulated as insurance by a state; "annuity contract" means any financial product that is an annuity under state insurance law; "retail customer" means a natural person obtaining insurance primarily for personal, family, or household purposes
• § 343.30 — Prohibited practices: institutions may not (a) condition any extension of credit on the purchase of insurance (anti-tying rule); (b) make any undue "suggestion" that credit will be denied if insurance is not purchased from the institution; (c) engage in deceptive practices that cause a customer to believe the insurance product is FDIC-insured or is a deposit
• § 343.40 — Required disclosures: at the initial purchase of an insurance product or annuity, the institution must clearly and conspicuously disclose that: (1) the product is not FDIC-insured; (2) the product is not a deposit or bank obligation; (3) the product is not guaranteed by the bank; (4) the product may lose value; disclosures must be made orally in person and in writing before the transaction is completed; acknowledgment of receipt required
• § 343.50 — Location requirements: to the extent practicable, banks must conduct insurance transactions in a space that is physically distinct from the deposit-taking area; if separate space is not practicable, the bank must use other means (signage, disclosures) to make clear that insurance activities are distinct from banking activities
• § 343.60 — Licensing requirements: banks may not permit any person to sell or offer insurance products unless that person holds all applicable state insurance licenses; the institution must comply with all state licensing laws governing insurance sales

How It Affects You

If you are a bank customer: When a bank employee offers you an annuity, life insurance policy, or credit insurance product, federal law requires them to tell you clearly — in writing and orally — that the product is not insured by the FDIC, is not a deposit, and can lose value. If you feel the bank skipped these disclosures or pressured you to buy insurance to get a loan, you can file a complaint with the FDIC (fdic.gov/consumers/assistance).

If you are a bank: Insurance sales must be conducted under a compliance program that includes staff training, supervision, and disclosure procedures. Violations are subject to FDIC enforcement action, including civil money penalties. The interagency nature of the rule means it is applied consistently across OCC-supervised, Fed-supervised, and FDIC-supervised banks — eliminating regulatory arbitrage.

If you are a state insurance regulator: State licensing requirements for insurance salespeople apply fully inside banks. Part 343 does not preempt state insurance law — it operates alongside it. Banks must comply with both the federal disclosure framework and any additional state-level consumer protection rules for insurance sales.

Statutory Authority

This rule implements:

• 12 U.S.C. § 1819 — FDIC general authority to prescribe rules and regulations
• Gramm-Leach-Bliley Act § 305 (15 U.S.C. § 6714) — which required the federal banking regulators to issue interagency rules protecting consumers from misleading insurance product sales at depository institutions

Recent Rulemakings

Part 343 was adopted in 2001 as part of the interagency implementation of the GLB Act's insurance sales provisions. The four federal banking regulators (OCC, Fed, FDIC, OTS) issued substantively identical rules simultaneously to ensure a level playing field. No major amendments have been made since the original 2001 adoption. The FDIC, OCC, and Federal Reserve periodically issue supervisory guidance updating examination procedures for compliance with the disclosure and physical-space requirements.

Pending Action