---
kind: "section"
citation: "12 U.S.C. § 1831x"
title: "12"
title_heading: "Banks and Banking"
number: "1831x"
heading: "Insurance customer protections"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/1831x"
units:
  - "Chapter 16 — Federal Deposit Insurance Corporation"
---

# §1831x. Insurance customer protections

- (a) **Regulations required—**
  - (1) **In general—** The [Federal banking agencies](/usc/12/1813.md?p=z) shall prescribe and publish in final form, before the end of the 1-year period beginning on November 12, 1999, customer protection regulations (which the agencies jointly determine to be appropriate) that—
    - (A) apply to retail sales practices, solicitations, advertising, or offers of any insurance product by any [depository institution](/usc/12/1813.md?p=c-1) or any [person](/usc/12/5481.md?p=19) that is engaged in such activities at an office of the institution or on behalf of the institution; and
    - (B) are consistent with the requirements of this chapter and provide such additional protections for customers to whom such sales, solicitations, advertising, or offers are directed.
  - (2) **Applicability to subsidiaries—** The regulations prescribed pursuant to [paragraph (1)](#a-1) shall extend such protections to any [subsidiary](/usc/12/1813.md?p=w-4) of a [depository institution](/usc/12/1813.md?p=c-1), as deemed appropriate by the regulators referred to in [paragraph (3)](#a-3), where such extension is determined to be necessary to ensure the [consumer](/usc/12/5481.md?p=4) protections provided by this section.
  - (3) **Consultation and joint regulations—** The [Federal banking agencies](/usc/12/1813.md?p=z) shall consult with each other and prescribe joint regulations pursuant to [paragraph (1)](#a-1), after consultation with the [State](/usc/12/1813.md?p=a-3) insurance regulators, as appropriate.
- (b) **Sales practices—** The regulations prescribed pursuant to [subsection (a)](#a) shall include antitying and anticoercion rules applicable to the sale of insurance products that prohibit a [depository institution](/usc/12/1813.md?p=c-1) from engaging in any practice that would lead a customer to believe an extension of [credit](/usc/12/5481.md?p=7), in [violation](/usc/12/1813.md?p=v) of [section 1972 of this title](/usc/12/1972.md), is conditional upon—
  - (1) the purchase of an insurance product from the institution or any of its [affiliates](/usc/12/1813.md?p=w-6); or
  - (2) an agreement by the [consumer](/usc/12/5481.md?p=4) not to obtain, or a prohibition on the [consumer](/usc/12/5481.md?p=4) from obtaining, an insurance product from an unaffiliated entity.
- (c) **Disclosures and advertising—** The regulations prescribed pursuant to [subsection (a)](#a) shall include the following provisions relating to disclosures and advertising in connection with the initial purchase of an insurance product:
  - (1) **Disclosures—**
    - (A) **In general—** Requirements that the following disclosures be made orally and in writing before the completion of the initial sale and, in the case of [clause (iii)](#c-1-A-iii), at the time of application for an extension of [credit](/usc/12/5481.md?p=7):
      - (i) **Uninsured status—** As appropriate, the product is not insured by the Federal [Deposit](/usc/12/1813.md?p=l) Insurance Corporation, the United States Government, or the [depository institution](/usc/12/1813.md?p=c-1).
      - (ii) **Investment risk—** In the case of a variable annuity or other insurance product which involves an investment risk, that there is an investment risk associated with the product, [including](/usc/12/1813.md?p=t-1) possible loss of value.
      - (iii) **Coercion—** The approval of an extension of [credit](/usc/12/5481.md?p=7) may not be conditioned on—
        - (I) the purchase of an insurance product from the institution in which the application for [credit](/usc/12/5481.md?p=7) is pending or of any [affiliate](/usc/12/1813.md?p=w-6) of the institution; or
        - (II) an agreement by the [consumer](/usc/12/5481.md?p=4) not to obtain, or a prohibition on the [consumer](/usc/12/5481.md?p=4) from obtaining, an insurance product from an unaffiliated entity.
    - (B) **Making disclosure readily understandable—** Regulations prescribed under [subparagraph (A)](#c-1-A) shall encourage the use of disclosure that is conspicuous, simple, direct, and readily understandable, such as the following:
      - (i) “NOT FDIC—INSURED”.
      - (ii) “NOT GUARANTEED BY THE [BANK](/usc/12/1813.md?p=a-1)”.
      - (iii) “MAY GO DOWN IN VALUE”.
      - (iv) “NOT INSURED BY ANY GOVERNMENT AGENCY”.
    - (C) **Limitation—** Nothing in this paragraph requires the inclusion of the foregoing disclosures in advertisements of a general nature describing or listing the services or products offered by an institution.
    - (D) **Meaningful disclosures—** Disclosures shall not be considered to be meaningfully provided under this paragraph if the institution or its representative [states](/usc/12/1813.md?p=a-3) that disclosures required by this subsection were available to the customer in printed material available for distribution, where such printed material is not provided and such information is not orally disclosed to the customer.
    - (E) **Adjustments for alternative methods of purchase—** In prescribing the requirements under subparagraphs [(A)](#c-1-A) and [(F)](#c-1-F), necessary adjustments shall be made for purchase in [person](/usc/12/5481.md?p=19), by telephone, or by electronic media to provide for the most appropriate and complete form of disclosure and acknowledgments.
    - (F) **Consumer acknowledgment—** A requirement that a [depository institution](/usc/12/1813.md?p=c-1) shall require any [person](/usc/12/5481.md?p=19) selling an insurance product at any office of, or on behalf of, the institution to obtain, at the time a [consumer](/usc/12/5481.md?p=4) receives the disclosures required under this paragraph or at the time of the initial purchase by the [consumer](/usc/12/5481.md?p=4) of such product, an acknowledgment by such [consumer](/usc/12/5481.md?p=4) of the receipt of the disclosure required under this subsection with respect to such product.
  - (2) **Prohibition on misrepresentations—** A prohibition on any practice, or any advertising, at any office of, or on behalf of, the [depository institution](/usc/12/1813.md?p=c-1), or any [subsidiary](/usc/12/1813.md?p=w-4), as appropriate, that could mislead any [person](/usc/12/5481.md?p=19) or otherwise cause a reasonable [person](/usc/12/5481.md?p=19) to reach an erroneous belief with respect to—
    - (A) the uninsured nature of any insurance product sold, or offered for sale, by the institution or any [subsidiary](/usc/12/1813.md?p=w-4) of the institution;
    - (B) in the case of a variable annuity or insurance product that involves an investment risk, the investment risk associated with any such product; or
    - (C) in the case of an institution or [subsidiary](/usc/12/1813.md?p=w-4) at which insurance products are sold or offered for sale, the fact that—
      - (i) the approval of an extension of [credit](/usc/12/5481.md?p=7) to a customer by the institution or [subsidiary](/usc/12/1813.md?p=w-4) may not be conditioned on the purchase of an insurance product by such customer from the institution or [subsidiary](/usc/12/1813.md?p=w-4); and
      - (ii) the customer is free to purchase the insurance product from another source.
- (d) **Separation of banking and nonbanking activities—**
  - (1) **Regulations required—** The regulations prescribed pursuant to [subsection (a)](#a) shall include such provisions as the [Federal banking agencies](/usc/12/1813.md?p=z) consider appropriate to ensure that the routine acceptance of [deposits](/usc/12/1813.md?p=l) is kept, to the extent practicable, physically segregated from insurance product activity.
  - (2) **Requirements—** Regulations prescribed pursuant to [paragraph (1)](#d-1) shall include the following requirements:
    - (A) **Separate setting—** A clear delineation of the setting in which, and the circumstances under which, transactions involving insurance products should be conducted in a location physically segregated from an area where retail [deposits](/usc/12/1813.md?p=l) are routinely accepted.
    - (B) **Referrals—** Standards that permit any [person](/usc/12/5481.md?p=19) accepting [deposits](/usc/12/1813.md?p=l) from the public in an area where such transactions are routinely conducted in a [depository institution](/usc/12/1813.md?p=c-1) to refer a customer who seeks to purchase any insurance product to a qualified [person](/usc/12/5481.md?p=19) who sells such product, only if the [person](/usc/12/5481.md?p=19) making the referral receives no more than a one-time nominal fee of a fixed dollar amount for each referral that does not depend on whether the referral results in a transaction.
    - (C) **Qualification and licensing requirements—** Standards prohibiting any [depository institution](/usc/12/1813.md?p=c-1) from permitting any [person](/usc/12/5481.md?p=19) to sell or offer for sale any insurance product in any part of any office of the institution, or on behalf of the institution, unless such [person](/usc/12/5481.md?p=19) is appropriately qualified and licensed.
- (e) **Domestic violence discrimination prohibition—**
  - (1) **In general—** In the case of an applicant for, or an insured under, any insurance product described in [paragraph (2)](#e-2), the status of the applicant or insured as a victim of domestic violence, or as a provider of services to victims of domestic violence, shall not be considered as a criterion in any decision with regard to insurance underwriting, pricing, renewal, or scope of coverage of insurance policies, or payment of insurance claims, except as required or expressly permitted under [State](/usc/12/1813.md?p=a-3) law.
  - (2) **Scope of application—** The prohibition contained in [paragraph (1)](#e-1) shall apply to any life or health insurance product which is sold or offered for sale, as principal, agent, or broker, by any [depository institution](/usc/12/1813.md?p=c-1) or any [person](/usc/12/5481.md?p=19) who is engaged in such activities at an office of the institution or on behalf of the institution.
  - (3) **Domestic violence defined—** For purposes of this subsection, the term “domestic violence” means the occurrence of one or more of the following acts by a current or former [family member](/usc/12/1707.md?p=e), household member, intimate partner, or caretaker:
    - (A) Attempting to cause or causing or threatening another [person](/usc/12/5481.md?p=19) physical harm, severe emotional distress, psychological trauma, rape, or sexual assault.
    - (B) Engaging in a course of conduct or repeatedly committing acts toward another [person](/usc/12/5481.md?p=19), [including](/usc/12/1813.md?p=t-1) following the [person](/usc/12/5481.md?p=19) without proper authority, under circumstances that place the [person](/usc/12/5481.md?p=19) in reasonable fear of bodily injury or physical harm.
    - (C) Subjecting another [person](/usc/12/5481.md?p=19) to false imprisonment.
    - (D) Attempting to cause or cause damage to property so as to intimidate or attempt to [control](/usc/12/1813.md?p=w-5) the behavior of another [person](/usc/12/5481.md?p=19).
- (f) **Consumer grievance process—** The [Federal banking agencies](/usc/12/1813.md?p=z) shall jointly establish a [consumer](/usc/12/5481.md?p=4) complaint mechanism, for receiving and expeditiously addressing [consumer](/usc/12/5481.md?p=4) complaints alleging a [violation](/usc/12/1813.md?p=v) of regulations issued under the section, which shall—
  - (1) establish a group within each regulatory agency to receive such complaints;
  - (2) develop procedures for investigating such complaints;
  - (3) develop procedures for informing [consumers](/usc/12/5481.md?p=4) of rights they may have in connection with such complaints; and
  - (4) develop procedures for addressing concerns raised by such complaints, as appropriate, [including](/usc/12/1813.md?p=t-1) procedures for the recovery of losses to the extent appropriate.
- (g) **Effect on other authority—**
  - (1) **In general—** No provision of this section shall be construed as granting, limiting, or otherwise affecting—
    - (A) any authority of the Securities and Exchange Commission, any self-regulatory organization, the Municipal Securities Rulemaking [Board](/usc/12/1861.md?p=b-3), or the [Secretary](/usc/12/1715z–22a.md?p=4) of the Treasury under any Federal securities law; or
    - (B) except as provided in [paragraph (2)](#g-2), any authority of any [State](/usc/12/1813.md?p=a-3) insurance commission (or any agency or office performing like functions), or of any [State](/usc/12/1813.md?p=a-3) securities commission (or any agency or office performing like functions), or other [State](/usc/12/1813.md?p=a-3) authority under any [State](/usc/12/1813.md?p=a-3) law.
  - (2) **Coordination with State law—**
    - (A) **In general—** Except as provided in [subparagraph (B)](#g-2-B), insurance customer protection regulations prescribed by a [Federal banking agency](/usc/12/1813.md?p=z) under this section shall not apply to retail sales, solicitations, advertising, or offers of any insurance product by any [depository institution](/usc/12/1813.md?p=c-1) or to any [person](/usc/12/5481.md?p=19) who is engaged in such activities at an office of such institution or on behalf of the institution, in a [State](/usc/12/1813.md?p=a-3) where the [State](/usc/12/1813.md?p=a-3) has in effect statutes, regulations, orders, or interpretations, that are inconsistent with or contrary to the regulations prescribed by the [Federal banking agencies](/usc/12/1813.md?p=z).
    - (B) **Preemption—**
      - (i) **In general—** If, with respect to any provision of the regulations prescribed under this section, the [Board](/usc/12/1861.md?p=b-3) of Governors of the Federal Reserve System, the Comptroller of the Currency, and the [Board of Directors](/usc/12/1813.md?p=k) of the Corporation determine jointly that the protection afforded by such provision for customers is greater than the protection provided by a comparable provision of the statutes, regulations, orders, or interpretations referred to in [subparagraph (A)](#g-2-A) of any [State](/usc/12/1813.md?p=a-3), the appropriate [State](/usc/12/1813.md?p=a-3) regulatory authority shall be notified of such determination in writing.
      - (ii) **Considerations—** Before making a final determination under [clause (i)](#g-2-B-i), the Federal agencies referred to in [clause (i)](#g-2-B-i) shall give appropriate consideration to comments submitted by the appropriate [State](/usc/12/1813.md?p=a-3) regulatory authorities relating to the level of protection afforded to [consumers](/usc/12/5481.md?p=4) under [State](/usc/12/1813.md?p=a-3) law.
      - (iii) **Federal preemption and ability of States to override Federal preemption—** If the Federal agencies referred to in [clause (i)](#g-2-B-i) jointly determine that any provision of the regulations prescribed under this section affords greater protections than a comparable [State](/usc/12/1813.md?p=a-3) law, rule, regulation, order, or interpretation, those agencies shall send a written preemption notice to the appropriate [State](/usc/12/1813.md?p=a-3) regulatory authority to notify the [State](/usc/12/1813.md?p=a-3) that the Federal provision will preempt the [State](/usc/12/1813.md?p=a-3) provision and will become applicable unless, not later than 3 years after the date of such notice, the [State](/usc/12/1813.md?p=a-3) adopts legislation to override such preemption.
- (h) **Non-discrimination against non-affiliated agents—** The [Federal banking agencies](/usc/12/1813.md?p=z) shall ensure that the regulations prescribed pursuant to [subsection (a)](#a) shall not have the effect of discriminating, either intentionally or unintentionally, against any [person](/usc/12/5481.md?p=19) engaged in insurance sales or solicitations that is not affiliated with a [depository institution](/usc/12/1813.md?p=c-1).

## Source credit

(Sept. 21, 1950, ch. 967, § 2[47], as added Pub. L. 106–102, title III, § 305, Nov. 12, 1999, 113 Stat. 1410.)