US bancassurance giant Citicorp has begun selling non-regulated insurance products, such as critical illness insurance, in the UK.

This is the first step for the multi-billion dollar group to test the waters in the UK insurance market, which may lead to it creating and selling regulated and non-life products.

Citisolutions UK managing director Duane Morrow said the company had a workforce of 1,120 agents of which 246 were now trained and competent.

Agents are known as associates rather than the traditional IFA in line with the FSA's guidelines.

"We will keep expanding this workforce. I am keeping our options open in regard to regulated products. It is obvious that there will be a shrinkage in the number of brokers until 1 January 2005.

"We believe, and research supports the fact, that there is a significant opportunity in the underserved middle income market - families who earn between £20,000 and £50,000."

Citisolutions is now a member of the ABI and wants to expand from its London and Manchester bases to a further 25 regional offices.

Its critical illness cover is part of a combined product which offers term life and death benefits. The premium for a 20 term life, 35-year-old male, non-smoker, per £100,000 is £11.77.

Morrow said that if the company's strategy was successful, there was further investment available from the US parent group Primerica. It is the largest financial services organisation in North America, with more than 100,000 independent representatives. Its revenue in 2002 was $2.1bn.

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