National City Corp. of Cleveland has licensed 225 brokers outside Ohio to sell insurance through a brokerage subsidiary.

"It's more efficient, it's simple from a bookkeeping aspect, and it's more profitable" than using an outside firm, said a spokesman for the $88 billion-asset bank, which made the switch Jan. 4.

Independent Financial Marketing Group Inc., a Purchase, N.Y.-based third-party provider of insurance and investment products, was previously the licensing agent.

The change was facilitated by National City's $7.7 billion acquisition 10 months ago of First of America Bank Corp. of Kalamazoo, Mich. After the purchase the bank asked federal regulators for permission to license employees through First of America's brokerage unit, the spokesman said.

The spokesman said National City had been pleased with its five-year relationship with Independent Financial.

Indeed, Independent Financial continues to license brokers for National City in Ohio, where state regulators are weighing the bank's application to license its own brokers, the spokesman said.

But "you don't pay someone to plow your driveway if you've got one on your own truck, no matter how well they plowed your driveway before," he said.

A spokesman for Independent Financial, which has 75 bank clients, said National City would continue using the marketing firm's processing and reporting system.

"Nat City is an important, albeit not large, Independent Financial customer that we look forward to continuing serving," he said.

Several years ago banks relied heavily on third-party marketing firms for their insurance sales, in part because state laws were prohibitive. But as laws have become more relaxed, more and more banks have decided to run their own insurance programs.

And Independent Financial is one of many third-party marketers to feel the heat.

Regulatory changes have "taken away an important reason why banks use third-party marketing firms," said Kenneth Kehrer, a consultant in Princeton, N.J.

Nonetheless, "the biggest wave of banks ditching their marketing partners has passed, and many firms are successfully finding new banks to work with," he added.

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