Some of the nation's largest banks are preparing to expand their insurance operations following Tuesday's Supreme Court decision that swept aside state barriers to bank insurance sales.

First Union Corp., Chemical Banking Corp., Fleet Financial Group, Banc One Corp., and UJB Financial Corp. are among the banks reaching for a share of the potentially lucrative insurance market. Most said they expect to focus on life insurance, which can generate commissions approaching 50% or more of first-year premiums.

The high court's decision - which centered on a case involving Barnett Banks - gives the industry an opening in 20 states that now restrict bank insurance activities. Among them: Florida, Massachusetts, Pennsylvania, Texas, and New York. (See related stories on page 2)

"We were looking for an opportunity to compete in all states on equal footing with insurance companies, and it appears that we have that now," said Glen J. Milesko, president of Banc One Corp.'s insurance group.

Bankers see Florida as perhaps the most promising market, because of its affluent and burgeoning population.

"Look at the sheer size of the market - it's the biggest bank in our system and second-largest in the state," said David de Gorter, head of First Union's insurance group.

Mr. de Gorter said his company is now studying the court's decision and developing "multiple strategies" to begin selling life insurance in Florida, where First Union has 700 sales representatives. The company's aim is to move swiftly once Florida regulators develop rules for banks to sell insurance, Mr. de Gorter said.

Florida has been at the center of banks' battle for the right to sell insurance for years. Barnett - Florida's largest bank - pushed its case to the Supreme Court, after Florida regulators barred it from selling insurance in the small town of Belleview.

A Barnett spokeswoman would not comment on the bank's plans to sell insurance now, but said it would consult with Florida regulators before acting.

Florida isn't the only state drawing bankers' attention. First Union, for instance, is drawing up plans to expand insurance sales in Pennsylvania and Connecticut, Mr. de Gorter said.

And New Jersey-based UJB is considering long-held plans to take over a Pennsylvania insurance operation now run by an unaffiliated marketing firm, said Louis M. Daniels, senior vice president for insurance services and alternative investments.

Mr. Daniels said the move would boost UJB's revenue from life insurance sales by 20% to 50%, though he declined to give dollar figures. Once allowed to expand in Pennsylvania, he said, UJB could generate up to 35% of its life insurance sales there, up from 10% now.

Dennis R. Kosavac, president of Chemical Bank's insurance agency unit, said the banking company is prepared to take its 450 agents and "sell insurance in every state we can." He expects the company to book $1 billion in premiums this year, 60% of which will come from life insurance.

Boston-based Fleet Financial Group is developing an insurance sales strategy centered on two agencies it owns in small towns in Massachusetts and Connecticut.

In addition, the bank has applied for a license to sell insurance from its Massachusetts agency in New York state, said Drew Pfirrman, associate general counsel for Fleet Financial Group.

Mr. Pfirrman said the Supreme Court ruling should help clear away legal impediments that have hampered the growth of this business.

The mere lifting of legal barriers doesn't, of course, guarantee banks instant success in insurance sales.

"The easiest part was winning the Supreme Court decision," said Kenneth Kehrer, a Princeton, N.J., bank consultant. "Now comes the hard part - making this into a successful business line for banks."

He questioned whether banks can be effective in selling a product that they have never been known for.

John Kimelman contributed to this report.

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