1550-0106 (Supporting Statement)

SUPPORTING STATEMENT
Consumer Protections for Depository Institution Sales of Insurance
OMB Control No. 1550-0106

A.

JUSTIFICATION

1.

Circumstances and Need

These information collections are required under section 305 of the Gramm-Leach-Bliley
Act (GLB Act), Public Law No. 106-102. Section 305 of the GLB Act required the Office of the
Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal
Deposit Insurance Corporation, and Office of Thrift Supervision (collectively, the Agencies) to
prescribe joint consumer protection regulations. OTS’s regulations are found at 12 CFR part
536. The regulations apply to retail sales practices, solicitations, advertising, and offers of any
insurance product by a depository institution or by other persons performing these activities at an
office of the institution or on behalf of the institution. Section 305 requires those performing
such activities to disclose certain information to consumers (for instance, that insurance products
and annuities are not FDIC-insured) and to obtain consumers’ acknowledgements.
2.

Use of Information Collected

Consumers will use the disclosures to understand the risks of buying insurance products
or annuities and to understand that the FDIC does not insure such products. Institutions and
others will use the consumers’ acknowledgment to verify that consumers received the
disclosures.
3.

Use of Technology to Reduce Burden

Institutions are not prohibited from using any technology that is reasonable and
appropriate for its circumstances, so long as the method is consistent with facilitating consumer
receipt and response. 12 CFR 536.40(c) provides specific disclosure rules for the timing and
method for electronic and telephone disclosures. Where a consumer agrees, an institution may
provide the written disclosures through electronic media if they are provided in a format that the
consumer may retain or obtain later, for example, by printing or storing electronically, such as by
downloading.
4.

Efforts to Identify Duplication

The collections of information are unique and cover the institution’s particular
circumstances. No duplication with other regulatory requirements exists. The disclosure and
acknowledgment requirements do, however, contain some overlap with prior guidance issued by
the Agencies in the Interagency Statement on Retail Sales of Nondeposit Investment Products
(February 15, 1994).

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5.

Minimizing the Burden on Small Businesses

This collection does not differentiate the disclosure requirements based on a savings
association’s size because the requirements apply to all savings associations that engage in
insurance product and annuity transactions.
6.

Consequences of Less Frequent Collection

The information collection is conducted only for retail sales practices, solicitations,
advertising, and offers of any insurance product by a savings association or by other persons
performing these activities at an office of the institution or on behalf of the institution. Less
frequent notice would impair the effectiveness of the program.
7.

Special Circumstances Requiring Data Collection Inconsistent with 5 CFR Part 1320

This information collection will be conducted in a manner that is consistent with the
guidelines set forth in 5 CFR § 1320.
8.

Consultation with Persons Outside OTS

Notice of intent to renew this information collection was published in the Federal
Register on April 17, 2007 (72 FR 19230). No comments were received.
9.

Payments of Gifts
No payments or gifts will be made in connection with this information collection.

10.

Confidentiality
Not applicable.

11.

Information of a Sensitive Nature
No questions of a personally sensitive nature are required by this information collection.

12.

Estimate of Annual Hour Burden
Estimated number of respondents:
Estimated total responses:
Estimated time per response:
Estimated total annual burden hours:

845
841,826
1.5 minutes
21,046

The estimated number of respondents is based on data for all OTS-regulated institutions
that filed a Thrift Financial Report (TFR) as of December 31, 2006. The estimated total number
of responses is based on 1% of the total deposit accounts on the TFRs as of December 31, 2006.
The time spent by a savings association in making these disclosures will vary based on

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institution size and the scope and volume of its insurance product and annuity activities.
Therefore, the estimated annual burden per institution may vary substantially from institution to
institution.
The cost of complying is estimated to be $552,450. This estimate is based on the
following calculations:

13.

•

95% Support time @ $25 per hour. 21,046 x .95 = 19,994 hours x $25 = $499,850

•

5% Professional time @ $50 per hour. 21,046 x .05 = 1,052 hours x $50 = $52,600
Estimate of Annual Cost Burden

Savings associations should be able to use readily available equipment to comply with
the information collections. However, some software costs likely will be incurred to provide the
disclosures and acknowledgments. Savings associations may add these materials to existing
institution documents, which tend to be dynamic in nature and revised on a continuing basis.
Therefore, the cost would be a part of usual and customary business practice.
14.

Estimates of Annualized Cost to Government

Not applicable. Compliance with this regulation will be verified as part of the existing
examination process.
15.

Reason for Change in Burden

The estimated burden for this information collection is an increase of 6,012 hours. This
is due to a decrease in the number of respondents from 928 to 845, an increase in the number of
responses from 601,347 to 841,826 (based on 1% of the number of deposit accounts), and a
decrease in the estimated time per response from 5 minutes to 1.5 minutes. In 2000, this was a
new collection and there were no actual numbers to go by. Beginning with the 2004 submission,
actual numbers have been used for the calculations.
16.

Publication
The information will not be published.

17.

Expiration Date

We are not seeking approval to not display the expiration date for OMB approval of the
information collection.

18.

Exceptions

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There are no exceptions to the certification statement.
B.

COLLECTIONS OF INFORMATION EMPLOYING STATISTICAL METHODS
Not applicable.