Manufacturers and Traders Bank is the latest entry in the insurance sales game, having forged a partnership with a third-party firm to sell life insurance in New York State.

The Buffalo-based bank, the lead bank of $10 billion-asset First Empire State Corp., signed a sales agreement with LifeMark, a unit of the Laughlin Group of Cos., Beaverton, Ore.

The deal, which was finalized July 12, is the bank's first foray into insurance sales. Bank officials said it was done in anticipation of changes under consideration in Congress that would allow banks more latitude in selling insurance.

"Now we're in a position to learn more about the distribution of insurance services and products," said James A. Gately, a senior vice president at Manufacturers and Traders. "When regulations are loosened, we as an institution will be better able to take advantage of business opportunities."

The move comes only four months after the bank took control of its investment sales program from Liberty Financial Cos., a Boston-based investment products marketer.

Manufacturers and Traders passed over Liberty for the insurance contract, as well as other East Coast insurance marketers such as Independent Financial Marketing Group and Essex Corp. In all, the bank looked at 50 companies before choosing LifeMark.

"There were some providers that only wanted to focus on the affluent market or the small business market," Mr. Gately said. "We weren't comfortable working in a program that would only focus on a narrow slice - we wanted to do it all."

LifeMark will place one manager, five to six insurance agents, and some support staff at Manufacturers and Traders' main office in Rochester, N.Y. If the program is successful, it will be expanded beyond the Rochester test site within six months, Mr. Gately said.

The M&T deal is the third bank LifeMark has nabbed, and gives the three- year-old firm a foothold in the Northeast. Among its other clients are Los Angeles-based Calfed Inc. and Union Bank, San Francisco.

Officials at Laughlin, LifeMark's parent company, said they are preparing to sign final proposals with three other banks, two of which are superregional.

Mary McAvity, a consultant with Boston-based Cerulli Associates, said LifeMark has been more aggressive than most companies in developing insurance programs that fit within banking environments.

LifeMark has "definitely decided that selling insurance is the next wave for banks, just as mutual funds were just a few years ago," Ms. McAvity said.

She added that LifeMark uses dedicated insurance agents to make sales. Many insurance marketing companies piggyback insurance sales onto an existing investment products sales programs.

"Life insurance and investment products are completely different animals for one rep to be selling both," she said.

M&T's contract with LifeMark is for three years, sources close to the bank said. Earlier this year, M&T petitioned federal regulators for a national bank charter, that could enable the bank to market insurance directly.

Mr. Gately confirmed that bank officials were looking at marketing credit cards, home equity loans, and possibly insurance, through the national bank. But he added that any plan would probably compliment its existing arrangement with LifeMark.

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