As financial services convergence takes place, banks are selling insurance and insurers are offering bank products. Yet, in several cases where insurance agents are beginning to offer deposit accounts, loans and credit cards to their clients, they are not becoming bankers.Rather, they are providing only a limited referral role. For example, Assurance Partners Bank-opened by Indianapolis-based National Association of Mutual Insurance Cos.-is operating on a simple referral basis.

"In our model, the transaction is largely consummated with the bank, and therefore the agent doesn't have to get involved in forms and dispersements, and become familiar with another dozen or two dozen regulations that deal with consumer lending disclosures, fair credit reporting and all those things," says Dave Fronek, president of Assurance Partners Bank.

If agents want to position themselves as financial services advisors and be more active in the application process by participating in loan origination, for example, those agents must become properly licensed as required by federal regulation, he says.

Independent agents who will sell products from InsurBanc, established by the Independent Insurance Agents of America will receive product training, says Paul Equale, president of IIAA, Alexandria. Va. "But we're not expecting independent agents-who already have to be experts in the minutia of dealing with the insurance side of the equation-to also become bankers," he says.

"They will have this bank as another arrow in their quiver and they will be able to pass referrals to the bank (by fax, e-mail or a toll-free number), and, of course, profit from the business side of the equation."

Agents of Bloomington, Ill.-based State Farm Mutual Insurance Cos. play two roles in selling State Farm banking products, says Stan Ommen, president, State Farm Bank.

They help the bank create awareness of its products among their customers, and they facilitate the customers in getting banking accounts. "They don't legally and officially open up deposit accounts, for example. They're a facilitator and marketer of those products," he says.

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