ONE-STOP MONEY? MANY INSURERS CREEPING INTO FINANCIAL ADVISERS', BANKERS' TERRITORIES.

Byline: Evan Pondel Staff Writer

It's difficult to affix a definition to an insurance company these days.

The lines that once delineated a bank from an insurance company, an insurance company from a bank, and a bank from a securities firm have all but vanished.

And while consumers once vested their confidence solely in an insurance company to bail them out of unfortunate circumstances, it's become increasingly important to make sure that, ``like a good neighbor,'' your profits are there.

Last month, State Farm Insurance added mutual funds to its arsenal of financial services. The company offers three managed equity funds, three index funds, one balanced fund, two bond funds and one money market fund.

``It's just another product we can offer our clients who are in need of it,'' said Vic Nader, a Canoga Park insurance agent and registered representative with Bloomington, Ill.-based State Farm. ``And it's nice to say we have this product because it opens a new avenue of discussion.''

The job descriptions of insurance agents like Nader have evolved since the Gramm-Leach-Bliley Act passed in 1999. The bill essentially eliminates many federal and state law barriers to affiliations that occur among banks, insurance companies and securities firms. ``I don't think anyone envisioned that law passing,'' Nader said.

The legislation repealed the Glass-Steagall Act, which was passed in 1934 during the depths of the Great Depression.

Among the myriad activities held responsible for the Depression was the number of crossovers between banks, insurance companies and securities firms.

However, ``scholars have agreed it was primarily the monetary policy of the Federal Reserve,'' said Christi Harlan, communications director of the Senate Banking Committee.

While insurance companies provide financial support in times of catastrophe, State Farm Mutual Funds are not insured by the Federal Deposit Insurance Corp.

``The mutual funds are good for some consumers, and not good for others - it depends on their goals,'' Nader said.

Northbrook, Ill.-based Allstate Corp. began offering financial services to its clients in late 1999. Out of 13,000 agents, 4,000 are eligible to sell mutual funds to customers.

``It's a natural extension,'' said Justin Schmitt, a spokesman for Allstate. ``We are trying to move from insurance to assurance for a safe financial future.''

Among other services insurance companies are providing their clients is the ability to open checking and savings accounts, money market accounts and consumer loans.

Bank of America and Los Angeles-based Farmers Insurance Group partnered in late March to integrate their banking and insurance products.

The banking products will be offered at 20 locations through Farmers agents, although the two companies have not finalized the locations, said Julie Davis, spokeswoman with Bank of America.

``Our alliance with Farmers is one piece to leverage each other's distribution channels,'' Davis said.

The move marks yet another trend in the convergence of banks, insurance companies and securities firms.

Banks are teaming up with insurance companies to provide convenience for their customers, while enhancing their longevities.

``People want one-stop banking and insurance, and people want more control of their money,'' said Jerry Carnahan, a vice president of Farmers Insurance. ``The insurance agent that thinks they can just get by selling auto insurance won't be around for much longer.''

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(color) Vic Nader, an insurance agent for State Farm Insurance in Canoga Park, now provides his clients with financial advice and sells mutual funds.

Charlotte Schmid-Maybach/Staff Photographer