WASHINGTON - The on-again, off-again interstate branching deal between a group of regional banks and insurance interests is back on again, though probably not in time to affect legislation this year.

After declaring an impasse last month, the organizations kept talking and came to an agreement Thursday. Their proposed legislation would permit interstate branching while restricting bank insurance activities.

If it becomes law, the measure apparently would close the "Delaware loophole," preventing Citicorp and Chase Manhattan Corp. from marketing insurance nationwide from that state. It would also bar banks from selling title insurance or gaining new underwriting powers.

Prospects for '92 Bill Remote

With time running out in this year's congressional session, the proposal is unlikely to get serious consideration. Even lawmakers who have championed interstate branching expressed doubts recently about the wisdom of taking up a bill as Congress rushes to adjourn before the fall campaign season.

James S. Kurtzke, a spokesman for the National Association of Professional Insurance Agents, one of the groups in the coalition, said the prospects this year "are remote. But we are looking at 1993."

Fred Martin, senior vice president at Bank of America, said Congress has enough time to pass a bill "if it has the will to act."

"A positive bank bill would be a shot in the arm for the economy," he added.

Other banking concerns that took part in the agreement are Fleet Financial Group Inc., NationsBank Corp., First Interstate Bankcorp, Norwest Corp., and PNC Financial Corp.

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