UPDATE 1-Generali still studying RBS insurance arm-executive

(Adds hybrid car policy)

MILAN, May 23 (Reuters) - Assicurazioni Generali (GASI.MI: Quote, Profile, Research) is studying the insurance arm of Royal Bank of Scotland (RBS.L: Quote, Profile, Research), which could be sold, an executive at Italy's biggest insurer said on Friday. Royal Bank of Scotland said last month it was considering the sale of all or part of RBS Insurance, Britain's second-largest general insurer. It includes brands Churchill, Direct Line and Privilege. "We continue to look at the documents," Generali Director General Raffaele Agrusti told reporters on the sidelines of a presentation.

In answer to a question on Churchill and Direct Line, Generali Chairman Antoine Bernheim said last month Generali would be interested in the two units if they were put up for sale.

Presenting Generali's 2007 sustainability report on Friday, co-Chief Executive Giovanni Perissinotto said the insurer planned to offer discounts to encourage people to buy hybrid cars.

Generali will "launch in coming months a new car insurance policy with a 10 percent discount to give an incentive to people who choose hybrid cars", he said.

Hybrid cars use both a conventional engine and a battery-powered electric motor. (Reporting by Claudia de Lillo; writing by Valentina Za; editing by Sue Thomas)