CNB Bancshares in Indiana has expanded its insurance agency by purchasing a competitor's clients.

The Evansville-based banking company last month acquired a book of property and casualty policies and clients from a local agency, Evansville Insurance Group. The acquisition is expected to boost the $3.6 billion- asset bank's premium volume to $60 million this year, compared with $50 million in 1995.

"We have the largest market share in Evansville and this gives us the chance to be in the insurance business in a big way," said chief financial officer John R. Spruill.

CNB has been selling property and casualty insurance for a year and a half through its own agency, Citizens Insurance of Evansville. The bank enjoys high name recognition in the Evansville market, enabling the agency to successfully woo insurance prospects.

Thanks to the Evansville Insurance acquisition, CNB expects to take in $5.9 million in insurance revenues in 1996.

CNB officials say the bank's insurance activities do not expose it to large potential losses because the Citizens Insurance Group does not hold the risk on the policies it sells. Instead, the agency represents 25 insurance underwriters, including ING, Meridian Mutual Insurance Co., and General Accident Insurance Company of America Inc.

CNB's insurance agency resides in the banking company's state bank, Citizens National of Jasper, because Indiana law allows state-chartered banks to sell insurance. CNB's lead bank, Citizens National Bank of Evansville, has a national charter.

Citizens' insurance agents work along with the bank's lenders. They try to cross-sell policies to mortgage and automobile loan customers as well as to small-business owners.

To alleviate any confusion, clients are asked to sign a disclaimer acknowledging that they understand the purchase of an insurance policy cannot be a condition of a loan or any other banking service.

"This bank works at it," said Allan R. Adams, president of Citizens Insurance of Evansville. "They did not sit us in a corner and say 'go do your business.'"

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