An agents group immediately questioned the OCC findings, saying the points of the law in question protect consumers.

One provision at issue prohibits non-licensed personnel from referring a prospective customer to a licensed insurance agent or broker unless asked by the customer.

The second preempted provision bars a bank from compensating an employee for making such a referral.

The third provision prohibits banks from telling loan applicants that insurance products are available from the bank until after the loan application is approved.

In its statement, OCC said it based its decision on the substantive effects of a particular state provision on the ability of a national bank to conduct its insurance business.

OCC added, "none of its conclusions on the Massachusetts law would result in a finding that any provision of the model Unfair Trade Practices Act developed by the National Association of Insurance Commissioners would be preempted."

Jeff Myers, a representative of the Independent Insurance Agents of America, Alexandria, Va., said that IIAA will explore all options to remedy its disagreement with OCC over the Massachusetts law.

He said IIAA strongly disagrees with the OCC's determination. The provisions at issue, Mr. Myers said, are important consumer protection provisions needed to shield consumers from abuses by banks.

This is the second time the OCC has issued a determination preempting a state law regulating bank insurance activities. OCC previously said that four provisions of a West Virginia law should be preempted on the same basis, which is they prevent or significantly interfere with bank insurance activities.

IIAA and the National Association of Professional Insurance Agents, Alexandria, Va., filed a lawsuit against the OCC seeking to overturn its West Virginia determination.