E. Robeson MacKethan, the former president of NetInsurance, will serve as the president of the bank's insurance operations.

Mr. MacKethan said the agency was one of the first to present real-time quotes and services over the Internet to auto insurance customers. The system will now be expanded to homeowners insurance. Marketing will be done through the mortgage approval process, he said.

"We are looking to optimize the insurance origination process," said Mr. MacKethan. This will be accomplished by presenting customers with a customized homeowners insurance proposal after they secure a mortgage.

For a homeowner who has just moved in from out-of-town, this approach can afford the out-of-state customer the convenience of securing all the banking and insurance needs in one place, Mr. MacKethan noted.

The arrangement also breathes new life into NetInsurance, which like many other dot-com companies, especially insurance, suffered from a lack of interest from the buying public. At the time NetBank purchased NetInsurance assets, the company was in Chapter 7 liquidation.

"There are so few success stories," said Mr. MacKethan, explaining that there was nothing wrong with the business model, but that the agency suffered the fate of many others in a similar situation.

However, he said this venture is "exciting" for the agency--putting NetInsurance in a strategic position it lacked before. The purchase also helps NetBank enter into the insurance market efficiently without having to build a base.

"The combination of the two makes so much sense I can't imagine doing it any other way," observed Mr. MacKethan.

NetBank has banking and mortgage services throughout the country and plans to have insurance licenses in all 50 states by the end of the year. The bank said it has approximately $4 billion in assets.