Premier and GNA join forces to create family of annuities.

Premier Bancorp is teaming up with its investment product marketing firm, GNA Corp., to create a family of proprietary variable annuities.

Seattle-based GNA and its parent company, General Electric Capital, will share the job of managing the annuities' 12 investment portfolios with the Baton Rouge, La., banking company. GNA will also use its own insurance company to underwrite the annuity contracts.

With the Premier initiative, GNA is taking its first step into the growing business of helping banks create proprietary annuities. Other insurers, like SunAmerica and American Skandia, have helped a dozen banks create their own products over the past two years.

Banks look to proprietary annuities as a way of broadening the reach of their mutual funds and earning steady management fees.

GNA, which has managed Premier's retail investment product sales program for the past seven years, was a natural partner for the annunities, said Richard White, senior executive vice president at Premier. GNA "has been instrumental in helping us with our program all along," Mr. White said. "We're comfortable with them and their operations."

Premier plans to offer the annuities through its own 115 branches in Louisiana, and also through 22 community banks that operate investment product sales programs with Premier's help.

James Mitchell & Co. has completed plans to transfer virtually all its annuity sales people in Florida to the brokerage program at Barnett Banks Inc. this winter.

Mitchell & Co., in a definitive agreement signed this month, will shed as many as 72 of the 90 representatives who were offering annuities to Barnett customers.

After moving to the Jacksonville, Fla., banking company, these representatives will sell mutual funds as part of a Barnett sales team that already includes 150 brokers covering 616 branches. Plans for the transfer were announced in October.

Mitchell & Co., which operates the Barnett annuity program because of state laws that prevent banks from doing so, plans to hire annuity sales people to make up for some of the loss.

James Mitchell, the San Diego, Calif.-based company's chairman, has indicated that the annuity program will have at least 30 sales people by later next year.

In compensation for the loss of employees, Barnett will pay Mitchell and Co. up to $2.5 million. Barnett has also agreed to extend Mitchell & Co.'s contract to sell annuities by one year, through 1997.

Mr. Mitchell said the transfer is a sound move. "We're confident that, when it's done, the new arrangement will benefit both our organizations," he said. Meanwhile, Mitchell & Co.'s annuity efforts in Florida remain under fire by the state's insurance department, which alleges the program violates state insurance law. The insurance department soon is expected to issue a final order that could block the program.

Attorneys for Mitchell & Co. have indicated the company would fight to overturn such a decision.

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