Hibernia Bancorp. began eyeing the life insurance business five years ago. Two years ago it began sizing it up and planning its course of action.

It is now ready to pounce.

The New Orleans bank began selling medium-term life insurance via direct marketing this month, said Kenneth A. Rains, executive vice president for trust and personal asset management. It is now preparing its insurance subsidiary, Tower Investors Inc., for business.

Hibernia finally has permission from the Office of the Comptroller of the Currency to sell insurance. It has hired an insurance industry veteran to manage the insurance subsidiary, Mr. Rains said in a telephone interview.

James H. Meredith, formerly with Northwestern Mutual Life Insurance Co., Milwaukee, joined the bank in January as vice president of insurance. His first activity: moving Hibernia's insurance headquarters 25 miles away, across Lake Pontchartrain to Madisonville-a town with fewer than 5,000 people.

Under a Supreme Court ruling last year, banks can sell life insurance nationwide from towns with fewer than 5,000 people.

"We've been poised to move into action here," Mr. Rains said.

An insurance consultant said some banks have expressed interest in the business, but waited for other banks to fight the court battles before starting their own initiatives.

"Banks are taking their leads from various court decisions, like Barnett and First Union, and are hearing more and more positive indicators that this area of business is not going to go away," said Valerie Jordan, an insurance consultant with Jordan & Jordan, Belchertown, Mass.

"These cases were the green light for those who were sitting on the fence."

As soon as legal and regulatory barriers were removed, Hibernia wasted no time, Mr. Rains said.

Mr. Meredith is recruiting insurance sales representatives, Mr. Rains said, and expects them to show results by the fourth quarter.

Once the program is up and running, the 250 bankers in Hibernia branches currently licensed to sell insurance and 35 brokers at the bank's investment subsidiary will sell whole life and variable life insurance, in addition to other investment products, Mr. Rains said. Eventually, the bank will add telemarketing, seminars, and more direct mailings to its sales channels, he said, as well as other products, like property and casualty insurance.

Hibernia will concentrate on the mass market, Mr. Rains said, but will add high-end products to its menu to offer its trust clients. Eventually, the bank's insurance line will include products from a variety of vendors. While Mr. Rains said he was not yet sure how many products and vendors will make the final cut, he said he expects to include more than one but less than 12 carriers.

The insurance division will help Hibernia, a $6.34 billion-asset bank, be more competitive in the financial services industry, Mr. Rains said. "And that's the key for any bank's survival."

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