While the new banking law, of course, makes it clear that insurance companies can go into banking, and vice versa, many bankers had been focusing their attention on how they could enter the insurance business via joint venturing. Seeing insurance companies entering banking via that route kind of comes out of left field. Assurance Partners' being an insurance industry answer to bank encroachment was by design. Assurance Partners Bank launched its business with 50 Indiana agents, but it plans to expand into more of that state within three months, and into other states beginning in the first quarter of 2001. Just where and when it will expand will depend on the pace established by the participating insurance companies.
Agents get a referral fee for most of the loan products they close.
The new institution's initial funding approach is interesting. The participating companies, in addition to the capital they put up as stockholders, will place large CDs with the thrift. The institution also hopes to attract deposit accounts from individual insurance customers and from the public at large. The bank plans to offer deposits by mail, phone, and fax, and, in time, through the web. Fronek won't disclose the projections in the institution's business plan, as that part of the regulatory application is confidential.