Battles Continue over Bank Insurance Rules

Article excerpt

With Barnett Banks Inc.'s 1996 victory over state regulators in

the U.S. Supreme Court, banks won the war over their ability to

sell insurance.

Now, in the wake of the decision, many Florida insurance agents

have been scratching their heads and wondering whether if you

can't beat the banks, maybe it will make better sense to join,

said William G. McCue Jr., the president of the Florida

Association of Insurance Agents.

In South Dakota, where banks have been able to sell insurance

for quite some time, 70 percent of insurance agencies are owned

or affiliated with banks. For the moment in Florida, there's

little danger of an overnight shift to banks.

Banks are restricted to selling insurance from a place of less

than 5,000 inhabitants.

There are 260 incorporated cities or towns in the Sunshine

State that have a population less than 5,000, said McCue.

Expanding beyond incorporated cities or towns increases the

number of places to about 3,000, he said.

Banks such as Barnett and First Union National Bank use the

site of their insurance business to sell by telephone throughout

the state.

Brochures in bank lobbies give out a toll-free number that

customers interested in insurance can call for information and

price quotes.

McCue said his Tallahassee-based trade association intends to

offer workshops in the coming year aimed at both agents who want

to hook up with banks and those who want to remain independent.

"We fought them the best we could," he said recounting a

long string of legislative victories against banks made moot by

the decision of the nation's high court. "It's not going to go

away."

McCue's trade association is about to conduct a survey to see

how many of its members are interested in selling bank products,

he said. …