WASHINGTON - ABN Amro North America is merging its insurance and broker-dealer entities to create a financial subsidiary, according to Richard Starr, its director of strategic insurance initiatives.

The unit, expected to begin operations by midsummer, is to offer variable annuities, life insurance, and personal property and casualty lines such as auto and homeowners insurance. The company already offers these products in Illinois, Indiana, Michigan, and New York via a call center.

"The blending and cloudiness of what is a security product and what is an insurance product is constant, so this is a practical way for us to streamline training of employees and operations," Mr. Starr said.

ABN Amro is also developing ways to distribute these products on the Internet .

"The value chain is many things other than price and transaction," Mr. Starr said. "The value chain on the Net starts with what the product is, what the customer's needs are, and finally, the transaction."

Mr. Starr spoke here Monday at the Financial Institutions Insurance Association's regulatory and compliance seminar. He emphasized that the banking company is taking care to protect customer privacy.

Regulators at the meeting warned that privacy is jeopardized when people buy life insurance and apply for credit cards within the same holding company.

"Our concern is if the credit card division starts to pull medical data within the holding company to decide terms of credit," said Peter Swire, the chief counselor for privacy in the Office of Management and Budget. "Our proposal is, if it is not standard to pull medical records for a specific product like credit cards, then you can't."

That would not be a problem at ABN Amro, according to Mr. Starr, who said the company has a privacy task force that meets weekly.

"We segregate all personal, nonpublic info," Mr. Starr said.

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