Boatmen's Bancshares said it has applied to the Federal Reserve Bank of St. Louis to set up a subsidiary, BIS Inc., to sell personal and commercial lines of insurance - including health, life, auto, and liability.

While many banks awaited last week's decision by the U.S. Supreme Court that brushed aside state barriers in certain cases and gave national banks the ability to sell insurance in small towns, the $41 billion-asset St. Louis company has been quietly working to set up insurance operations in Des Moines.

Neil Milner, executive vice president of the Iowa Bankers Association, said insurance sales by state banks or holding companies have been permitted there since early in the century - longer than in any other state.

Mathew Street, associate general counsel for the American Bankers Association, said it makes sense for Boatmen's to start its operation in Iowa, a state with loose insurance restrictions. "What people want to do at this point is get in the insurance business," he said, "and the Iowa jurisdiction is very receptive to doing that."

Boatmen's entered Iowa in October 1991 through the acquisition of $1.2 billion-asset First Interstate of Iowa Inc. That bank already legally sold insurance.

James Weber, an analyst with A.G. Edwards, said insurance is a natural business for Boatmen's because of its strong retail presence. "It makes sense," he said. "They have a big emphasis on fee income. Boatmen's is already strong and growing its fee-based revenue in the trust and mortgage businesses."

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