Banc One Corp. has formed a partnership with an international insurance company to sell estate-planning products to the bank's affluent clients.
Banc One Insurance Services Corp., a unit of the Columbus, Ohio-based banking company, last week signed a deal with Manufacturers Life Insurance Co. to buy a minority stake in the Canadian underwriter's specialized life insurance agency, Succession Planning International.
The deal with Succession supplies Banc One with 450 insurance agents who will sell life policies to bank customers in 12 states. Instead of referring business away, the bank, as a part-owner of SPI, will share in the sales income.
"Now we are involved in the selection process." said Glen J. Milesko, president of Milwaukee-based Banc One Insurance. Previously, "the trust guys, private bankers, or commercial lenders just made referrals to whoever they knew in the life insurance business: a friend, whatever."
The deal will force Banc One bankers to forsake some of the relationships they've nurtured with insurance agents over the years, Mr. Milesko said.
"We go to our trust people and our private bankers and say, 'You know, we actually have an ownership position in this,'" he said. "And there will be a bit of a conflict of interest if, in fact, they were to provide those leads to somebody else."
In addition to Manufacturers Life, Succession has contracts with four other insurance underwriters that focus on wealthy customers - New York Life Insurance Co., Prudential Insurance Company of America, First Colony Corp., and Massachusetts Mutual Life Insurance Co. Succession has agreed to use a standardized application for Banc One customers.
"The benefit is that Banc One will standardize the criteria for what agents are receiving the referrals," said Michael White, a bank insurance consultant in Radnor, Pa. "They have quality control, as opposed to some kind of ad hoc approach by some local trust officer who happens to know an insurance agent, but not necessarily their expertise, qualifications, and experience in the market."
Nevertheless, not everyone at Banc One initially embraced the idea, Mr. Milesko said. A trust officer in Madison, Wis., for example, expressed chagrin at the possibility of making a referral at the bank's behest.
"He said: 'I don't understand why we're doing this. I really like this guy that I'm doing business with,'" Mr. Milesko recalled. "As it turned out, the guy was the SPI agent we chose in Madison."