InsurBanc Expands to 15 Additional States

InsurBanc, the federal savings bank developed by the Independent Insurance Agents & Brokers of America (IIABA) to serve agents and brokers as well as their clients, has won regulatory approval to expand its operations to 15 additional states—three on a full-service basis and 12 on a limited-service capacity, according to bank CEO Michael Herlihy.

The Office of Thrift Supervision (OTS) approved this expansion of services late last month along with a new online agent education program for agents.

“This is a significant milestone in the development of InsurBanc and an affirmation of the commitment made by the IIABA and W.R. Berkley Corporation, partners in the bank, as well as the hundreds of agencies that already are a part of this groundbreaking financial institution,” Herlihy said. “While we are mindful of the challenges that come with expansion, we are confident that InsurBanc will continue to grow and will become the bank of choice for not only independent agents and brokers but also their clients.

“With the OTS approval we are able to begin doing business in the approved states immediately and will launch our brand of banking—called the ‘return of relationship banking’—in these 15 states over the coming months,” Herlihy explained.

InsurBanc’s authority now allows full commercial and consumer banking services to agencies and agency employees in Maine, Rhode Island and Delaware. InsurBanc-trained agents also can make referrals for commercial and consumer banking products. This is the same authority the bank already has in the three states—Connecticut, Massachusetts and New Jersey—where it was permitted to do business when its charter was approved by the OTS in April 2001.

InsurBanc also is granted limited-service authority in a dozen states—Kentucky, Illinois, Iowa, Indiana, Louisiana, Missouri, Minnesota, Nebraska, South Carolina, Oklahoma, Oregon and Virginia. Limited-service authority enables the bank to provide full commercial and consumer banking services to agencies and agency employees as well as pay referral fees to agents for the origination of credit card applications and settlement fees for residential mortgages.

“InsurBanc is serving as a catalyst for the growth of the independent agency system,” IIABA CEO Robert A. Rusbuldt said. “Even when InsurBanc was only a concept on paper, many agents and brokers wanted the bank to be available in their states from the start. While we were limited on the initial rollout, InsurBanc resources will now be accessible to a larger number of IIABA member agencies.

“This deep-rooted want is reflective of the business savvy of agents and brokers. They understand that if they are to thrive in today’s competitive financial services marketplace they must be able to provide their clients a range of products and services and have access themselves to financial products that will position their businesses to grow, including working capital lines of credit and agency perpetuation loans. InsurBanc is filling an important role for hundreds of agencies and will be partnering with even more IIABA members in the coming months.”

The OTS also approved the bank’s online agent education program.

Called the InsurBanc Independent Agent Education Program, this online educational tool will allow agents and brokers to use the Internet to complete the training required for them to be qualified to refer business to the bank. Previously, InsurBanc staff conducted training sessions in person. The new Internet-based educational program uses technology made available through the Big “I” Virtual University.

“Online training will enable agents to train in the comfort of their home or office and allow InsurBanc staff to focus on the agent outreach efforts critical to growing the bank,” Herlihy added.