Trustmark Corp. of Jackson, Miss., is making a big annuity push. Trustmark Bank recently licensed 108 branch employees to sell insurance, and another 53 are to take the exam.
The newly minted insurance salespeople can immediately begin hawking the bank's new fixed proprietary annuity, Performance Bonus Annuity. The annuity is underwritten by American General of Houston.
"We've been late in coming out with the product," conceded Thomas Howard, president of Trustmark Financial Services.
But Mr. Howard said he believes his bank is the first to launch a proprietary fixed annuity in Mississippi.
Fixed annuities, which most banks offer, are in disfavor because variable annuities pay better in today's economy. However, bankers have reported better sales in the South.
Still, Trustmark plans to add a proprietary variable annuity this year to the third-party variable annuities that its brokerage staff already sells.
Mr. Howard said the bank waited for a court decision on bank insurance and annuity sales before entering the proprietary annuity business.
Once the U.S. District Court ruled in September in favor of Deposit Guaranty Corp. that Mississippi's insurance commissioner could not enforce state rules interfering with national banks' rights to sell insurance, Trustmark began preparations.
Last month, for instance, it announced it would buy a 41-employee insurance agency, Botrell Agency, in a tax-free stock swap. The company is expected to keep its name but be a part of Trustmark Insurance Agency Inc., a subsidiary formed last year.
Trustmark will use the widely advertised "Performance" mutual fund name to leverage its brand equity, Mr. Howard said.
The fixed annuity is being offered as Performance 5 Bonus annuity and Performance 7 Bonus annuity. The difference is in the surrender charges, which start at 8% and dwindle to zero after five or seven years.
The annuity has an extended-care and a terminal-illness rider. And Mr. Howard said he plans to add an off-the-shelf annuity with a focus on yield to complement the proprietary offering.
Separately, Trustmark will introduce an asset-allocation wrap product next month and will continue to look at other annuities, he said.
The bank is taking the steps to become a financial services player, said Gerard R. Host, Trustmark's chief financial officer, in a recent interview.
