An Ohio community bank's affiliates have snared the state's first general insurance sales licenses for agencies that aren't part of an insurance company.
The Ohio Department of Insurance late last year approved the nearly two- year-old applications by two affiliates of $73 million-asset First National Bank of Southeastern Ohio, Caldwell. for licenses to sell life and property.
The department also issued guidelines on policy and procedures for future applications, said Jeffrey Quayle, vice president and general counsel for the Ohio Bankers Association.
But such licenses for Ohio banks have been a long time in coming.
An Ohio Supreme Court decision four years ago had authorized banks in the state to own separate insurance agencies.
However, Huntington National Bank has been seeking a license to sell life and casualty insurance since April 1993. The casualty license was denied in September after the state Supreme Court ordered the department to rule on it, and the bank is currently appealing.
Mr. Quayle, who said he has heard from many interested bankers, is expecting Ohio banks' insurance applications to pick up this year. The state's bankers had previously been restricted to offering credit life insurance and other limited coverage, he said.
"I think the only thing that's caused people to hold off is Midwestern bankers' inherent conservatism," he said.
First National, owned by $560 million-asset Peoples Bancorp of Marietta, will open three offices of its affiliates, Northwest Territory Life Insurance Agency and Casualty Insurance Agency Inc.
The life insurer is already up-and-running; the bank previously had used a third-party provider and knew the business, said Peoples' general counsel, Charles R. Hunsaker. The bank is still coordinating its property- casualty affiliate, however.
"We didn't go about this to be the first," Mr. Hunsaker said. "We went about it because we felt we were legally entitled to the licenses and getting the business.
"We feel that it fits well with our current business plan in terms of wanting to be a full-service provider."
In its approval for Peoples, the Insurance Department said its subsidiaries were not the "alter ego of the bank and will function separately in selling insurance, annuities, (and) personal, automobile, and property coverage," according to the trade group.
