The American Council of Life Insurance has put a price on its support for legislation allowing common ownership of banks and insurance companies.

Among 10 provisions the council is demanding, Congress would be asked to protect insurance companies from bank regulators and prohibit banks from underwriting insurance directly.

"We're not going to buy into affiliations without giving this a lot of thought," said ACLI chief counsel Gary Hughes. "If these issues aren't addressed, then as far as we're concerned, it's not going to get done."

Still, the council took a big step toward softening its longtime opposition when its board voted Sept. 30 to start negotiating with lawmakers on affiliation legislation.

The turnaround delighted many bank lobbyists who have been thwarted repeatedly in Congress by insurance industry opposition.

"This is a 180-degree reversal," said Philip S. Corwin of Federal Legislative Associates. "Because of the key role ACLI played on blocking legislation, this is very significant.

"I think they can bring some other insurance groups along."

"It's very good news," agreed American Bankers Association chief lobbyist Edward L. Yingling. "It's been the insurance industry that has protected the status quo."

The conditions the council is putting on its support are limits the banking industry could live with, Mr. Yingling said.

Still, any affiliations legislation is likely to face continued opposition from the Independent Insurance Agents of America. That national trade group has vowed to fight any banking legislation that does not restrict the industry's insurance powers.

Even Mr. Hughes stressed that the council isn't enthusiastic about an affiliations bill. Instead, he said, the group was forced to accept common ownership because the courts have refused to stop the Office of the Comptroller of the Currency from expanding bank insurance powers.

"It's our feeling that the courts and bank regulators were already doing their version of affiliation," he said. "We wanted to lend some rationality to the process."

To win its support, the ACLI said, legislation would have to require that bank employees selling insurance be state-licensed.

Federal banking regulators should be barred from interfering in insurance operations, too, the council said. For example, bank regulators should be barred from seizing an insurance company's capital to shore up an affiliated bank. Bank regulators also should be prohibited from further enhancing bank insurance powers, ACLI said.

If banks and insurers are allowed to align, ACLI said, Congress must preempt state laws prohibiting cross-marketing between the two types of companies.

Other provisions ACLI wants enacted include:

*A study of whether federal deposit insurance reduces banks' cost of funds and, if it does, eliminating any advantage over insurance companies.

*Allowing commercial companies that now own insurance firms to buy banks.

*Permitting stock and mutual insurance companies the same rights to acquire banks.

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