(1) Except with respect to a credit unemployment insurance policy, group credit life insurance policy, a group credit health, group credit accident or group credit health and accident policy, or similar group credit insurance covering the person of the insured, banks, trust companies and any person soliciting the purchase of or selling insurance on the premises thereof, must disclose or cause to be disclosed in writing, in clear and concise language, to their customers and prospective customers who are solicited therefor that any insurance offered or sold:

(2) Except with respect to a flood insurance policy, or a credit unemployment insurance policy, group credit life insurance policy, a group credit health, group credit accident or group credit health and accident policy, or similar group credit insurance covering the person of the insured, when a customer obtains insurance and credit from a bank or trust company, then the credit and insurance transactions shall be completed through separate documents. The expense of insurance premiums may not be included in the primary credit transaction without the express written consent of the customer.

(3) Banks and trust companies shall not extend credit, lease or sell property of any kind, or furnish any services, or fix or vary the consideration for any of the foregoing, on the condition or requirement that the customer obtain insurance from the bank or trust company, its affiliate or subsidiary, or a particular insurer, agent or broker. This prohibition shall not prevent a bank or trust company from informing a customer that insurance is required in order to obtain a loan or credit, that loan or credit approval is contingent upon the customer's procurement of acceptable insurance, or that insurance is available from the bank or trust company; provided, however, that the bank or trust company shall also inform the customer in writing that his or her choice of insurance provider shall not affect the bank or trust company's credit decision or credit terms in any way. Such disclosure shall be given again prior to or at the time that a bank, trust company or person selling insurance on the premises thereof solicits the purchase of any insurance from a customer who has applied for a loan or extension of credit.

(1) Preemption of Insurance Law, section 2501. Pursuant to section 2501 of the Insurance Law, a licensed insurance agent or broker who is owned or controlled, directly or indirectly, by a bank shall not negotiate any insurance policy covering real or personal property which is the subject matter of, or security for, a loan or extension of credit made by the bank or by any other bank which is owned or controlled, directly or indirectly, by such bank. For purposes of section 2501 of the Insurance Law, the term bank includes, among other entities, a national bank whose principal office is located in New York.

(2) The superintendent hereby finds that the restrictions of section 2501 of the Insurance Law are preempted with respect to banks and trust companies. The superintendent further finds, that section 2501 of the Insurance Law has been preempted because it applies to insurance activities of banks and trust companies and not to insurance activities of other entities. In support of such findings, the superintendent takes note that the United States District Court for the Western District of New York has ruled in the case of New York Bankers Association, Inc. et al. v. Neil D. Levin, et al., 97-CIV-6423T, March 27, 1998, that section 2501 of the New York State Insurance Law is preempted by title 12, United States Code, section 92, and the superintendent may not impose the restrictions of section 2501 of the Insurance Law against a national bank doing business pursuant to title 12, United States Code, section 92, in a place the population of which does not exceed 5,000 inhabitants.