Barnett Bank of Marion Cty., N. A. v. Nelson, 517 U.S. 25, 5 (1996)

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Cite as: 517 U. S. 25 (1996)

Opinion of the Court

"No [Florida licensed] insurance agent . . . who is associated with, . . . owned or controlled by . . . a financial institution shall engage in insurance agency activities . . . ." Fla. Stat. 626.988(2) (Supp. 1996) (State Statute).

The term "financial institution" includes

"any bank . . . [except for a] bank which is not a subsidiary or affiliate of a bank holding company and is located in a city having a population of less than 5,000 . . . ." 626.988(1)(a).

Thus, the State Statute says, in essence, that banks cannot sell insurance in Florida—except that an unaffiliated small town bank (i. e., a bank that is not affiliated with a bank holding company) may sell insurance in a small town. Ibid.

In October 1993 petitioner Barnett Bank, an "affiliate[d]" national bank which does business through a branch in a small Florida town, bought a Florida licensed insurance agency. The Florida State Insurance Commissioner, pointing to the State Statute (and noting that the unaffiliated small town bank exception did not apply), ordered Barnett's insurance agency to stop selling the prohibited forms of insurance. Barnett, claiming that the Federal Statute pre-empted the State Statute, then filed this action for declaratory and injunctive relief in federal court.

The District Court held that the Federal Statute did not pre-empt the State Statute, but only because of the special insurance-related federal anti-pre-emption rule. The McCarran-Ferguson Act, which creates that rule, says:

"No act of Congress shall be construed to invalidate, impair, or supersede any law enacted by any State for the purpose of regulating the business of insurance, or which imposes a fee or tax upon such business, unless such Act specifically relates to the business of insurance . . . ." McCarran-Ferguson Act, 2(b), 59 Stat. 34, 15 U. S. C. 1012(b).

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