Comptroller of the Currency Robert L. Clarke went to bat for the banking industry Thursday, telling Congress that there should be no restrictions on bank sales of insurance.

Further, he told a House Energy and Commerce subcommittee that underwriting of insurance should be permissible as long as banks place these activities in subsidiaries or affiliates of the banks.This is the position of the American Bankers Association. Thomas P. Rideout, president-elect of the bankers, told the subcommittee that banks alone among all the financial players are unfairly singled out by federal law and denied the authority to compete in virtually all aspects of insurance.

Mr. Clarke argued that there is no evidence to support insurance industry arguments that banks will tie credit to insurance sales.

Large segments of the American public believe that entry into insurance markets now closed to banks would yield substantial benefits, he said.

His preferred approach to bank-insurance questions would be to affirmatively authorize national banks to offer a full range of insurance products. State law would continue to govern the insurance activities of state banks.

Mr. Clarke sharply criticized Senate-passed banking legislation that would limit the ability of bank holding companies to offer insurance products.

Roger Levy, vice president of The Travelers Cos., speaking for the American Insurance Association, tried to refute the comptroller of the currency's arguments, one by one.

There is no evidence that consumers yearn for insurance services from their banks, or that they would be better served if bank insurance were more widely available, he said.

He suggested that it is illogical to believe that banks with financial problems of their own could be cured by affiliating with an insolvent insurer.

He said that banks do not have surplus capital to use to create new insurance markets and there is no evidence that they would commit any capital to high-risk, long-tail commercial liability lines such as environmental and pollution liability or medical malpractice.

Banks will not serve low-income inner city residents better, either, Mr. Levy said, as evidenced by consumer group complaints about the lack of bank services to this population.

Banks should be kept out of the insurance industry, Mr. Levy argued,

because combinations can threaten the safety and soundness of banks, because banks can concentrate economic power and because they can leverage credit.

Warren Wise, associate general counsel of Massachusetts Mutual Life Insurance Co., speaking for the American Counci of Life Insurance, also debunked consumer group claims that bank entry into insurance could save consumers $10 billion-$15 billion annually in insurance costs.

Mr. Wise argued that these claims are based on the success of a no-frills, generic type of insurance product sold by savings banks in Massachusetts, Connecticut and New York.

He noted that there is no evidence that consumers would only be interest in generic insurance.

The life insurers prepared a document charging that banks have had ample opportunity to show their concern for consumers and have not done so. Examples of this are high credit-card interest rates, high service charges and banks' resistance to offering life-line banking services for the poor and elderly.