In a fresh sign of banks' relentless pursuit of fee income, Comerica Inc. has begun selling insurance throughout its Michigan branch network.

The $31.6 billion-asset banking company, based in Detroit, kicked off sales of life, disability, and long-term care insurance last month at 290 branches.

Comerica is also looking at state laws in three of its other markets - California, Illinois, and Texas - to see if the effort can be expanded, according to Andrea Martin, a managing director of the Michigan bank.

Comerica joins a string of major banks that are adding life insurance to their retail product mix. Among those already selling insurance are Chase Manhattan Corp., Chemical Banking Corp., and Keycorp. And National Westminster Bank plans to begin offering such products in 34 New York-area branches next month.

Though such efforts are still in their infancy, industry observers believe more banks will follow suit.

"There's going to be a learning curve, but life insurance will absolutely become fully integrated within a few years," said Valerie Jordan, president of Jordan & Jordan, a Belchertown, Mass., insurance consulting firm.

Comerica's Ms. Martin, who oversees both insurance and brokerage activities at the bank, said the insurance effort should be a strong complement to an already vigorous investment products program.

"Mutual funds and annuities were our natural first step, and insurance is appropriate as our second," Ms. Martin said. "It's clear that banks need these products if they're going to compete with other financial service providers."

Entering the insurance business is a sticky matter for banks, however. Laws governing bank insurance powers vary widely from state to state.

Comerica is making its push in Michigan in the wake of a state Supreme Court decision last year that said that banks can own insurance agencies. But other states have been far more restrictive.

For instance, Ms. Martin said, Comerica has no plans to enter the insurance business in Florida, where it operates several private banking offices, because of that state's laws against bank insurance activities.

She said Comerica's decision to lie low in Florida was reinforced last week, when a federal appeals court ruled that state law supersedes the National Bank Act on the issue of bank insurance powers. The decision appears to clear the way for Florida's insurance department to force Barnett Banks to divest an insurance agency it purchased last year.

Despite such setbacks, banks clearly see great promise in the insurance business.

Because banks have large branch networks and loyal customers, they are well positioned to capture a large chunk of insurance business, said Robert K. Gallman, a vice president at Chase.

"Banks will continue to grow significantly at the expense of traditional agents and brokers," Mr. Gallman told a bank insurance conference recently.

A key attraction for banks, quite clearly, is income potential. Ms. Jordan said earnings from life insurance can surpass gains from mutual funds and annuities because life insurance is structured to supply ongoing commissions.

But she warned that insurance sales aren't a slam dunk. It can take three or more sessions to close a sale with a client, versus a single meeting for many mutual fund sales, Ms. Jordan said.

Still, she said, banks have a natural advantage in wooing clients: "A lot of people have a need for life insurance and don't have an insurance agent - but they have a banker."

Comerica's sales program kicked off with 25 sales representatives.

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