NATIONSBANK OF NORTH CAROLINA, N. A. v. VARIABLE ANNUITY LIFE INSURANCE CO.
Legal provision: 12 U.S.C. 24
Argument of Edward C. DuMont
Chief Justice Rehnquist: We'll hear argument now in Number 93-1612, NationsBank of North Carolina v. Variable Annuity Life Insurance Company and a consolidated case.
Mr. DuMont: Thank you, Mr. Chief Justice, and may it please the Court:
This case presents the question whether Federal banking law permits national banks to act as agents in the sale of annuities.
The Comptroller of the Currency, who has supervisory authority over the national banking system, based his conclusion that it does on three determinations, each grounded in his technical and policy expertise: first, that banks are authorized to broker financial investments on behalf of their customers, second, that modern annuity contracts are essentially investment products, and third, that nothing in 12 U.S. Code section 92, which authorizes banks operating in small towns to operate general insurance agencies, prohibits sales of annuities by banks located elsewhere.
The court of appeals erred by failing to defer to the Comptroller on each of these judgements.
The general banking power statute, 12 U.S. Code section 24 Seventh, provides at the outset that national banks may exercise
"all such incidental powers as shall be necessary to carry on the business of banking. "
Defining what is part of the business of banking at any given time requires an intimate understanding of a highly dynamic field.
It is therefore a task uniquely within the competence of the Comptroller.
Unknown Speaker: Well, Mr. DuMont, you rely on the language in the seventh section there of the business of banking.
Mr. DuMont: That's correct.
Unknown Speaker: And that phrase is followed by a listing of six specific things that banks can do, and it's been my understanding that most courts have defined the business of banking in terms of those specifically enumerated powers rather than something more broad.
Should we not look to the six specific things and see if something is closely related to those?
Mr. DuMont: I think the courts are certainly well advised to look at those things as exemplary of what is encompassed within the business of banking, the core business of banking.
Unknown Speaker: But you think any investment instrument of financial investment interest is within the business of banking even though it's not mentioned in any of the six listed things?
Mr. DuMont: We think that the language of the first phrase there, 24 Seventh, is broad enough to go beyond just the listed powers, and the courts have so held in a variety of cases, including--
Unknown Speaker: Including the selling of insurance policies of any kind.
Mr. DuMont: --Well, I think if you wanted to operate a general insurance agency you would be in the province of section 92, but let me point out that the second sentence of section 24 Seventh I think is very important here, if I may, and the second sentence, which was added in the 1930's, says the business of dealing in securities and stock by the association shall be limited to purchasing and selling, and so on.
It goes on to... it recognizes the existence of the business of dealing in securities and stock, and this Court has twice before recognized in--
Unknown Speaker: You mean the Glass-Steagall--
Mr. DuMont: --That's the Glass-Steagall provision.
Unknown Speaker: --And they wouldn't have had to add it unless the sale of securities and stock had been covered, is your point.
Mr. DuMont: Well, my point is that the way that that sentence is phrased indicates that it is not granting a new power but recognizing and limiting one that was already granted.
In fact, this Court has specifically recognized that fact in both Clarke v. Securities Industry Association and SIA Board of Governors.
Unknown Speaker: Well, could a bank have power to deal in expensive art for investment purposes?
Some people use art as an investment.
Mr. DuMont: I think that that would--
Unknown Speaker: Is that within their powers, too?
Mr. DuMont: --Well, that sort of question would be one for the Comptroller in the first instance and, of course, is not involved here.
Unknown Speaker: Well, do you think the language would stretch that far?
Would that be a reasonable interpretation by the Comptroller to which we should defer?
Mr. DuMont: --I think that if there were a practice, as there is in this case over a long period of years, of banks dealing in that kind of thing as agent for their customers without substantial equity risk, and that that had been recognized by the courts over time, I think it would be reasonable for the Comptroller... and, by the way, I think I should add, if other banks and savings institutions regulated by other entities, such as State banks or Federal thrifts, were engaging in the same activity, I think it would be reasonable--
Unknown Speaker: And do you say that the sale of annuities is something that has been carried out over a long period of time by national banks?
Mr. DuMont: --I say that the sale of investment products, the brokering of investment products is something that has been carried--
Unknown Speaker: Annuities.
Mr. DuMont: --Well, they are different questions.
The sale of investment products has been carried out over a long period of time by banks, and that's--
Unknown Speaker: How about annuities?
Mr. DuMont: --Annuities have been sold by banks other than those regulated by the Comptroller in the last several years.
In fact, banks are quite a substantial part of that business, other banks, and that's really part of the Comptroller's point here, is that there are lots of banking institutions that are conducting exactly this kind of agency sale, and there's no reason why national banks should not be allowed to encompass that within their business of banking.
But we're perfectly willing to address the question of why annuities are like... modern annuities are like investment products of the kind that banks have traditionally brokered.
Unknown Speaker: Where does the term, investment products come from?
Is that some part of the statute?
Mr. DuMont: It is not a statutory term.
Unknown Speaker: Then why do you use it?
Mr. DuMont: Well, I think that the... the statutory term is, the business of banking.
The question is, what is fairly encompassed within the business of banking and powers incidental thereto?
The Comptroller has determined that the brokerage sale of investment products of a variety of different kinds, whether or not they are securities and stock specifically recognized by the statute--
Unknown Speaker: Did he... in his ruling did he use the term, investment products?
Mr. DuMont: --I believe, financial investment products, yes, or financial investment instruments.
Unknown Speaker: Did he define it?
Mr. DuMont: Well, the discussion goes on to talk about exactly why they are investment instruments in the modern context, why annuities are, and I can turn to that.
I think that if you look at the modern market, and this is something the Comptroller did, that the essential feature of the modern annuity contract is really a tax deferral feature.
In the accumulation of--
Unknown Speaker: Mr. DuMont, before you go on with that, would you just tell us the expression, business of banking, you said that the six specifics are exemplary, not exclusive.
Where would one look to find the limits of the term, business of banking, or are there no limits that... that emerge from the text, one must see what banks are doing at a particular point in time?
Mr. DuMont: --Well, I think it's perfectly fair to look at the text as a good starting point for what is the business of banking, but I think it would be erroneous to take a statute like this, that is really an organic law to govern the development... to govern the existence of the banking industry and to try to freeze at any one time exactly what banks are doing, and say, well, they were doing that in 1864, and unless Congress acts specifically, they can do no other thing from now on.
And I would point out that this Court has had to address a variety of issues, such as borrowing money, which are not specifically referred to in section 24 Seventh, and yet the Court has not had a lot of trouble saying, well, look, we look at a particular case with particular facts, and this is a power which is necessary to carry on the business of banking, and I think that's exactly the kind of analysis we look to here.
Now, there are a variety of... the text is the best starting point, but also, I do think that as the business develops, and banks in a variety of jurisdiction start dealing with particular kinds of products that one can fairly look to that development, as the Court really did, or as the State and lower Federal courts did, in the case of securities and stock, which may or may not have been part of the business of banking in the 1860's, but certainly by the time of the 1930's, when Glass-Steagall was passed, this Court has properly recognized that that was a recognized part of what banks were doing.
They were brokering securities and stock for their customers.
Unknown Speaker: Mr. DuMont, may I ask you a related question?
Just assume... I know you don't assume this, but just assume for the sake of argument that the annuities in question could be classified either as securities or as insurance.
Just take that as a given.
In deciding which way to classify them, I would like to know, if we do know, what the object of section 9 was.
I have assumed that the object of section 92 was... beyond its desire to help out the little banks by giving them an extra source of cash, that its object also reflected an intent to protect independent insurance brokers.
Am I right?
And if I am right, is that a reason for construing the... for saying that, other things being equal, we ought to recognize that objective, and we ought to construe these annuities as being insurance rather than securities in order to realize the protective object of 92?
Mr. DuMont: Well, to answer the first question, I don't think it would be particularly appropriate to consider that a central purpose of 92, to protect insurance agents.
There is concern expressed in the primary legislative history, the Comptroller's letter on the subject in 1916, that banks should not become department stores and--
Unknown Speaker: And didn't that letter also... I forget the exact words, but didn't that letter make some such remark as, you know, it's not going to hurt the others too much?
They said, well, you know, the little banks will be able to make a little money on this, but it's not going to hurt the others, by which I assume they meant the insurance brokers?
Mr. DuMont: --I think there was certainly recognition of that, but again, I think you need to look at that in the context of what 92 was doing, which was authorizing a national bank operating in a small town to carry on an entire general agency.
Unknown Speaker: Oh, I realize it was doing that, but that's where it stopped, and why would it have stopped unless it wanted to protect insurance brokers?
Mr. DuMont: Well, we really think that section 92 was limited to granting an additional power.
Unknown Speaker: Well, I know, but what about the answer to my question?
Assuming that we recognize that there's a limitation there, isn't the only likely object of the limitation to protect insurance brokers?
Mr. DuMont: No.
Even if we grant that there's some preemptive scope to 92, and that therefore there's a question to be decided about what was the purpose of 92 and what might be the sort of insurance product that falls within it, there's no indication that that was meant to sweep away any product that might ever be sold by an insurance company, or anything that might for some purposes be denominated insurance.
And in this context, we'd be perfectly willing to concede, as you say, that annuities might for some purposes be classified as insurance and for other purposes not.
As long as they're in that middle ground, it is... it was perfectly within the Comptroller's province to decide--
Unknown Speaker: I grant you that, but I think you're getting a little bit away from my question.
My question is, why did they put the limitation?
Why did they limit it to the small banks, and was there any reason they did so, except to protect insurance brokers?
Mr. DuMont: --Well, certainly.
I mean, they... first of all, the presumption was that a bank in a large city had plenty of banking business and didn't need the additional revenue.
That's the primary reason, and that's reflected in the Comptroller's letter, and also that a bank in a large town that had lots of banking business should be concentrating its attention primarily on its banking business as opposed to running a general insurance agency, whereas none of those things applied in the small town.
Incidentally, he did mention that they also wouldn't be taking business away from insurance brokers in small towns because they might not be an insurance broker in such a town.
All of that is fine, but I don't think it gets away from the central purpose of 92 being to confer additional power on banks and small towns to allow them to raise extra revenue by operating a general insurance agency, and really none of those purposes was engaged here.
Unknown Speaker: Is it a plausible argument to say that an annuity can be both insurance and a security, or are these mutually exclusive categories?
Mr. DuMont: Well, to begin with, it's importance to distinguish... for instance, the Court's prior cases like Bailey, for one, and United Benefit Life, looked in the securities law context at whether something was a security, on one hand, or an annuity contract or insurance on the other, and that made sense in that statutory context because the specific statutory exception was from securities law for annuity contracts or insurance contracts.
We have a very different context here, which is a statute which simply confers some authority to deal in a broad range of insurance products on banks and small towns.
There isn't anything to set against insurance like securities.
There's no other product that you're really deciding, is it one or the other.
In this case, it can perfectly well be both.
The question is, does it fall within the scope of insurance as that is intended in section 92?
And our answer to that is, the Comptroller was perfectly within the grounds of reason to conclude that no, because these products in the modern marketplace were sufficiently like modern, other modern investment products, and sufficiently unlike the broad range of general insurance products, that he could determine that they are part of the business of banking and--
Unknown Speaker: How unlike are they--
Mr. DuMont: --not go under section 92.
Unknown Speaker: --How unlike are they to life insurance contracts?
Why... couldn't you make the same argument about regular life insurance, that it's... that it's a form of investment?
Mr. DuMont: Well, I think it depends on what kind of life insurance we're talking about.
Pure term insurance, no, I don't think you can make the same--
Unknown Speaker: No.
Mr. DuMont: --there are a variety of insurance products--
Unknown Speaker: --Whole life, right.
Mr. DuMont: --The insurance industry has shown itself to be very inventive in operating in that medium ground between pure investment and pure insurance.
Unknown Speaker: It's always been considered... whole life insurance, anyway, has always been considered a medium of saving and investment as well as a medium of life insurance, hasn't it?
Mr. DuMont: I think it has, to the extent that it has always existed, which--
Unknown Speaker: So your argument would lead to the conclusion that at least insofar as straight life insurance... not term insurance, but investment life insurance is concerned, bank could have been life insurance agents.
Mr. DuMont: --The Comptroller has made no determination on that, but our argument would be that the Comptroller could look at a particular set of insurance products, including whole universal life products, and decide that if they have predominantly... predominantly investment characteristics they are within the scope of the banking powers and outside the scope of section 92.
Unknown Speaker: And you think that's faithful to what was sought to be achieved by this amendment regarding insurance.
You think it was contemplated that banks generally could engage in the sale of whole life insurance.
I find that very difficult to credit.
I just... it doesn't seem to me very likely.
Mr. DuMont: Well, I don't... I don't know what Congress or the Comptroller thought about life insurance and banks in 1916, and I'm not sure that it's really completely relevant.
Assuming that they thought... that they would have been completely surprised at the notion that a bank anywhere could have sold... without 92 to could have sold an insurance policy or an annuity that doesn't give any scope for the development of the business of banking and the development of the products.
I mean, I think if you really looked at 1916 life insurance products and annuity products, then and now, you'd find that they are very different, the market is very different, the country is very different, and the business of banking is very different.
There's no reason why one should freeze the business of banking or the concept of insurance for purposes of section 92.
Unknown Speaker: Who does the business of banking besides... besides the banks that are restricted by this very provision?
Where does one get the concept of the business of banking, if not from the banks that are governed by this restriction, which restricts them to the business of banking?
Mr. DuMont: Well, banking, of course, started out as a State-regulated activity, and still very many banks, including many very important banks, are State-regulated, for instance in New York, and as you know, the New York Court of Appeals has recently said on a case identical to this that New York banks are entitled to--
Unknown Speaker: What banks are selling annuities now?
To what extent are banks selling annuities?
What percent of the market, and as between national banks and State banks?
Mr. DuMont: --The latter part, I don't know, the breakdown between State banks and national banks.
I don't have them at the tip of my finger.
There are figures in our brief about the percentage.
It's a considerable percentage, on the order of 20 percent of the modern annuities market, which is a bank market, I believe.
Unknown Speaker: On the order of 20 percent.
Now, suppose we do not accept your argument about the Comptroller could cover lots of insurance if he chose to do so, do you lose, or can you treat annuities discretely?
In answer to Justice Scalia's question, can you say, even if the banks can't touch life insurance, still they can allow banks to engage in the sale of annuities?
Mr. DuMont: I think you can certainly say that.
Annuities are, and always have been, and are treated under State insurance laws, for that matter, as separate products from other kinds of insur... from insurance at all, and--
Unknown Speaker: Can you also draw an intelligible line between fixed and variable?
Mr. DuMont: --Well, variable annuities I should say have been held by this Court in the securities context to be securities, and therefore they're clearly covered by the second sentence of 24 Seventh, and there really shouldn't be any issue--
Unknown Speaker: Well, they are if the two terms are interchangeable as between the two statutes, but if we assume they're not necessarily interchangeable, I take it the insurance character, the significance of the actuarial element is much greater in the case of a fixed annuity.
Mr. DuMont: --The fixed annuities are a more difficult case, there's no question about that.
Unknown Speaker: I thought you had told me that the distinction between securities on the one hand and insurance on the other is not very helpful to this case, yet I see you're relying on that in your answer to Justice Souter.
Mr. DuMont: No, no, all I'm saying is that in the securities context... and we agree that they're not the same context.
They're not necessarily the same context, but both the Comptroller and the SEC and this Court have, in a variety of contexts, both securities and banking, recognized that variable annuities are essentially mutual fund products.
They are investment products, and they are securities.
They are regulated like securities, and they are sold like securities, so in that sense they're clearly covered by the second sentence of section 24 Seventh.
Unknown Speaker: In the statute it says, incidental powers, right?
The word is "incidental".
Mr. DuMont: Correct.
Unknown Speaker: Okay.
What I'd like to know... and I take it there are then some semicolons and a number of things listed, and nowhere is listed the word, securities, yet somebody at some point must have thought that "incidental" includes securities, which isn't listed, otherwise they wouldn't have written the second sentence.
Mr. DuMont: That's correct.
Unknown Speaker: All right.
So now, what is... and if you can say it in a sentence or so, what is the Comptroller's basic theory of how you define that word, "incidental"?
Mr. DuMont: I don't know that the Comptroller has a taken a particular position on--
Unknown Speaker: Well, can he put anything in under the sun?
I mean, he must have some theory as to how you get this word "incidental", which couldn't be limited just to the next six clauses, but can't include everything in the world, so what is the basic theory of it?
Mr. DuMont: --The basic theory is really two things: one is, you look to the kinds of things that are listed, and to things that might be either convenient or useful to carrying out those listed powers, or a reasonable extrapolation from them, and the second is that you look at banking practices as they have grown up in other banks that are not necessarily regulated by the Comptroller, or even among banks that are in the modern marketplace, and you look to that kind of contemporary practice.
Unknown Speaker: Is that the proper interpretation to ask under that statute, whether this is an incidental power?
That's not how I read it.
I would think the question is whether it is the business of banking.
Mr. DuMont: We think the--
Unknown Speaker: Because it doesn't say, colon, to discount and negotiate promissory notes, to loan money, et cetera, which would be an enumeration of the incidental powers.
It rather says, to conduct the business of banking by, rather than to.
Mr. DuMont: --The preferable reading is that this is all part of the business of banking and powers are incidental thereto, but we don't think it makes a lot of difference.
Unknown Speaker: Thank you, Mr. DuMont.
Argument of Steven S. Rosenthal
Mr. Rosenthal: Mr. Chief Justice, and may it please the Court:
Let me begin by noting what this case does not involve.
This case does not involve a bank underwriting annuities.
This does not involve a bank seeking to become a general insurance agent.
What it does involve is NationsBank's attempt to sell a specific financial investment product which is currently being sold by federally insured thrift institutions, Federal credit unions, and by respondent's admission at least a third, and we believe two-thirds of all State banks, including the State banks that NationsBank competes with, which are--
Unknown Speaker: Does it include all types of annuities, fixed, variable, and those in between?
Mr. Rosenthal: --Our application, Justice O'Connor, included a request to sell every modern form of annuities, and we are--
Unknown Speaker: Including fixed?
Mr. Rosenthal: --Well, our application included fixed and variable, every possible combination that's available in the marketplace, and indeed, we do represent several different insurers and have sold virtually every combination known, so you're talking about the whole panoply here.
Unknown Speaker: Are the statistics you recited just before your answer to that question, are they applicable to fixed annuities as well as variable?
Mr. Rosenthal: Yes, Your Honor.
Unknown Speaker: That is, two-thirds of all State banks sell fixed annuities?
Mr. Rosenthal: I haven't looked as carefully as I should have on that issue.
My understanding is that the banks which sell annuities where States permit it, permit the sale of the full panoply, and indeed, let me expand on that, according to the latest available statistics banks, depository institutions in 1993 sold on the order of 13 and a half billion dollars worth of annuities, representing 19.3 percent of all individual annuity sales.
Those are depository institutions.
It's a huge amount of volume, and it's our belief that the Comptroller is permitted, under the National Bank Act, to at least include that as one of his factors in determining what constitutes the business of banking.
Unknown Speaker: What exactly will NationsBank do if its application is granted?
Will it, in its own name, sell annuities to people?
Mr. Rosenthal: --No.
We are not... we are simply an agent.
We are a broker.
The policy is issued by Hartford Life Insurance, or some company--
Unknown Speaker: So I walk into a NationsBank office, what do I do if I want to buy... buy one of those policies?
Mr. Rosenthal: --You will go to an account executive at the branch, you will indicate that you are interested in purchasing annuities, the account executive will provide you with material on a wide variety of different policies, you will look at that material and you will decide which of the various features you would like, and then you will write out a check, not to NationsBank, but to the issuer for the amount of the policy, and we will handle the application and arrange for the sale.
Unknown Speaker: You get a commission, then, from the--
Mr. Rosenthal: Yes, we do.
The position respondents have... has taken in its brief is really that the business of banking is a concept which was frozen as of 1863.
I mean, it's frozen, I say in my brief, like some Matthew Brady daguerreotype.
We don't believe that the business of banking was frozen by banking powers that existed at that time and by the same token we don't believe it's infinitely elastic.
What we're asking this Court to do is to grant the Comptroller reasoned discretion, as it does under a variety of other statutes which include similar language.
This Court has had no problem--
Unknown Speaker: --Well, isn't there some negative implication from section 92 that large banks can't sell insurance?
Mr. Rosenthal: --I think... I think this would be a tougher case, Justice O'Connor, if the Comptroller had approved our right to be a general insurance agent, to sell auto insurance, life insurance--
Unknown Speaker: Well, my question is this: is there some negative implication, from the language of section 92, that suggests that large banks may not sell insurance?
Mr. Rosenthal: --I do not believe, Your Honor, that section 92 prohibited large banks from selling any insurance product.
Unknown Speaker: You see no negative implications?
Mr. Rosenthal: From selling, Justice O'Connor, any insurance policy, any insurance product, any product of an insurance company, we do see some negative implication in the sense that if we were here trying to sell all insurance products, all products of insurance companies, we think that that would be a tougher case, but we note, Your Honor, that at the beginning of Section 92, Congress express... Congress expressly preserved existing banking powers.
Unknown Speaker: Why would it be necessary to grant the authority to sell in places of 5,000 if there were already a general authority to do that?
Mr. Rosenthal: But there... I don't think there is, Justice... Chief Justice.
The fact is that there wasn't a general power to sell all policies.
I mean, all insurance.
All there was under 24(7) is the right to engage in those activities incidental to the business of banking.
Even in 1994, all that the banking industry has contended is that 24(7) allows the sale of credit life insurance, certain policies which are related to lending and annuities, but not--
Unknown Speaker: Get back to Justice O'Connor's question about the negative implication.
You say there's no negative implication from that grant in section 92?
Mr. Rosenthal: --No, I'm... I thought what I had answered was that I think there is a negative implication to the extent that, if we were here in a case in which we were seeking... a large bank, NationsBank were seeking to sell auto insurance, life insurance, the full panoply of insurance, then I think the argument about negative implication has more weight, but we're not seeking that here.
We're talking about very specialized and particular products.
If I may turn it around, what was the purpose of Congress adding the language at the beginning of 24(7) if it was not to preserve the right to sell some products under other banking powers, and that's all we're talking about here, and there are two banking powers we're talking about, 24(7) and the power to deal in stocks and securities, the second sentence of 24(7).
And I would note that we are here urging both powers, because... and this is a point which may get lost in the briefs.
There are really two lawsuits here.
There's a lawsuit against the Comptroller with respect to the 1990 approval.
There's also a lawsuit against NationsBank to enjoin us from selling either fixed or variable annuities.
When we appeared in the district court, we defended the right to sell under... under the general business of banking, but we also defended on the grounds that under previous rulings which were adopted in 1990 we had the right to sell variable annuities under the second sentence of 24(7).
Unknown Speaker: But isn't the sale of a fixed annuity very much like the sale of a life insurance policy?
Mr. Rosenthal: I think that the Comptroller had the discretion--
Unknown Speaker: Well, isn't it?
Mr. Rosenthal: --I--
Unknown Speaker: Don't... try to focus on my question.
Mr. Rosenthal: --I think, Justice O'Connor, there is a critical difference, and the critical difference is that an insurance policy, a life insurance policy dealt... deals with an insurable risk, the risk that someone will die prematurely.
Unknown Speaker: Well, a fixed annuity does exactly the same thing.
Mr. Rosenthal: No, it doesn't.
It deals with... it deals with... it has a mortality calculation.
I concede that all of them have mortality calculations, but there area lot of instruments and a lot of entities which have mortality calculations which are not insurance.
The key is, and I think the Court has said this, sharing of insurance risk, and I believe that the authorities which we've cited, and there are voluminous academic authorities, say that annuities are not insurance because they do not involve an insurance risk.
Only the insurance companies would argue that living to a ripe old age constitutes a risk.
Unknown Speaker: Mr. Rosenthal, what about the cases that this Court had, the Manhart case involving... those involved annuities, the TIA Craft cases, where there were... there was a pooling male and female, and the question was whether that was lawful under title VII, but that was... it was certainly pooling a risk.
Mr. Rosenthal: I think pooling... the word pooling occurs, but the question is, was there a pooling of insurance risk, and I think what the Comptroller said in his opinion and what I think he was reasonable in concluding was that annuities do not involve a pooling of insurance risk, and we've cited in our briefs, and I think it's hard to disagree that there are lots of authorities out there, lots of academicians, lots of court cases which have held that annuities, fixed annuities do not involve a pooling of insurance risk.
They do involve mortality calculations.
We concede that, but we don't think this that that's the hallmark.
Unknown Speaker: They do involve a pooling, so you're focusing on the word whether there's a risk or not.
Mr. Rosenthal: Risk, and that's the word that has been focused on in numerous decisions of this Court, the word risk, and really what they mean is insurance risk in those cases.
Unknown Speaker: Thank you, Mr. Rosenthal.
Mr. Rosenthal: Thank you, sir.
Unknown Speaker: Mr. Stewart, we'll hear from you.
Argument of David Overlock Stewart
Mr. Stewart: Mr. Chief Justice, and may it please the Court:
I'd like to start by talking about the pooling question that was just being discussed here by Mr. Rosenthal, because it seems to us very critical here to understand the nature of insurance, because the Comptroller misstated in his definition of insurance.
He said that insurance is indemnification against risk of loss, and that is not the case.
That is a description of casualty insurance.
Life insurance and annuities are insurance, but they do not involve indemnification against risk of loss.
The elements of insurance are, in fact, pooling and sharing of risk, which Mr. Rosenthal said.
That's what this Court has said in the McCarran-Ferguson cases in trying to construe the term, the business of insurance.
If you take a life insurance situation, the people who buy the life insurance are insuring against the loss of income due to death for the benefit of their dependents, and the people who die... let's make sure I get this correct.
The people who die early are subsidized by the premiums paid by the people who die late.
In annuities, you are... the annuity purchaser is insuring against the loss of income for the annuity purchaser, because loss of income ordinarily accompanies age and retirement, and the people who die late end up subsi... boy, I'm afraid I'm going to get it wrong.
There is a pooling of risk, and the people who... between the people who die early and the people who die late.
Unknown Speaker: The people who die late are subsidized by those who die early.
Mr. Stewart: I'm very grateful.
Unknown Speaker: Yes, but that... but isn't that the crucial point, really, which makes us not like insurance?
I mean, I would have thought that insurance in its heartland concept is a group of people in this room get together and they think something bad might happen to them, and they say, if something bad's going to happen to us, at least we'll get some money, and so what they're doing is, they're worried about a risk of bad things that are going to happen.
They're called risk-averse.
So they put up some money now, a little bit, and then if something bad happens they get a lot more.
That helps them feel better, all right, or other things.
This isn't that at all from the insurance company's point of view.
Maybe you measure it and decide what the price is going to be, because you take life into account.
That's a decision as to what you're going to charge.
But what the person's buying is not some protection against some bad thing happening to them.
He's buying an income stream that happens to be measured by his life, just as if he bought a coupon, a bond, or some other thing, or a black acre for his life, or a condominium in Florida for his life.
I mean, it seems to me that's a rather heartland difference, even though I absolutely concede that insurance companies sell this kind of thing.
Mr. Stewart: Your Honor, I think you've crystallized, in fact, the problem, because your description also would apply to life insurance--
Unknown Speaker: Yes, yes, life insurance--
Mr. Stewart: --delineated as insurance.
Unknown Speaker: --that's correct.
You sell a lot of things under the name, insurance, that other people also sell.
I'm not denying that insurance companies sell this kind of thing.
All I'm saying is... and it's a question... isn't this somewhat removed from the heartland of what we think of as normal insurance, and doesn't that fact, or why doesn't it, even though insurance companies certainly sell this, doesn't that make a difference, or does it?
Mr. Stewart: Your Honor, I think--
Unknown Speaker: You're going to say it doesn't make a difference, or you're going to say it isn't different, but I'm interested in your answer.
Mr. Stewart: --I think it does not make a difference, because when you're dealing with the risk of life and death, it is not that the risk may not happen.
That's what you have with an indemnity policy.
You have a risk that may not occur.
You may not suffer a loss, and that's where the Comptroller got off the tracks by going off on indemnification against risk of loss.
For annuities and insurance, you're dealing with the risk of mortality.
That risk will happen.
We will die.
The only question is when--
Unknown Speaker: Yes.
Mr. Stewart: --and the timing of your death, the stream of income that is generated by your life is what you will insure.
Unknown Speaker: Yes, and when life insurance is bought, normally people say, when a bad thing happens to me, I don't know when, I'll at least have some money for my children.
Now, people buy it for other reasons, like investment, and so it isn't necessarily 100 percent that way.
I'm drawing a difference, and what I'm driving towards is this: why isn't this more like banking than stocks and bonds?
People put money in a bank account, and the bank pays interest, so instead of the bank paying interest, the bank one day says, I'll tell you what we'll do, we'll save all this money for you, and then we'll pay it back to you with some interest later on when you retire, in equal monthly payments.
Now, people do put money in banks all the time, and they do want to get back this money.
Why isn't this more like banking than taking your money and buying a stock and bond?
Mr. Stewart: Well, Your Honor, I think this is an elegant theoretical construct, but I don't think it's the way that the pooling of risk has been viewed in insurance and in fact what Congress had in mind when you look at section 92, for example, which talks specifically only in extending insurance powers for representation of a life insurance company as well as others.
So Congress clearly was thinking of a life insurance company as selling insurance.
That's right in the text of the statute, that the national bank in a small town is permitted to sell insurance as agent for a fire, life, or other insurance company, so although this may be a theoretical possibility, I don't think it's in the context of this case available as an outcome.
Unknown Speaker: So you mean if insurance companies... this is... they're not selling life insurance, they're selling something called an annuity, and I agree that insurance companies also sell annuities.
You're saying that 92 means that if insurance companies decide to sell off their real estate... they have a lot of bad real estate investments... or if they... is it whatever insurance companies do that they can't do?
What is the interpretation of that, 92?
I mean, whatever insurance companies used to sell, that means banks, or if insurance companies sold a lot of it... is... how does that work?
Mr. Stewart: Of course not, because annuity product does involve the pooling of risk, the risk of outliving your income, the risk of a penniless old age.
It does involve an investment component like the other elements of whole life insurance.
We always recognized that.
Unknown Speaker: All right.
Mr. Stewart: But it also has an insurance component.
Unknown Speaker: Insurance... mutual funds also involve the pooling of risk.
Bond funds also involve the pooling of risk.
Lots of things involve the pooling of risk.
Mr. Stewart: You do not have one purchaser subsidizing the loss or gain of another purchaser, that's the difference, and what... in the life insurance and in annuities, the difference is, what you get depends upon when you die--
Unknown Speaker: So if, in fact--
Mr. Stewart: --and that is uniquely different--
Unknown Speaker: --Yes, all right--
Mr. Stewart: --from mutual funds or any other type of--
Unknown Speaker: --So if real estate companies pool condominiums, and sell condominiums for people's life, that also is in the... the banks couldn't do that, either?
Mr. Stewart: --I didn't understand the--
Unknown Speaker: Well, I mean, you could have... pool condominiums.
People sell condominiums, a life estate in a condominium.
I don't know if that's a comparable thing or not, but you can use 2 weeks in Florida in this house for the rest of your life.
Big insurance companies might sell those things.
Would that also... is anything that's measured, that's a pool and it's measured by a person's life, is that the definition?
Mr. Stewart: --I think if you're protecting against a risk of loss and it involves the pooling and sharing, you do, in fact, have insurance.
Unknown Speaker: Aren't there two other problems with your analogy?
You say that what is being insured here is loss of in... insurance against lost income from living too long, but as I understand it, characteristically the income stream begins regardless of whether you live too long or not, and it begins regardless of whether you have other income or not, and so in both of those respects there's a clear distinction from kind of the paradigm case of casualty insurance.
Mr. Stewart: Well, I'm not sure that's true, Your Honor, because the annuity begins to pay at the maturity date.
It can begin immediately, but it's more customary at a maturity date which is often coincident with the retirement date, and it is designed to ensure that there will be--
Unknown Speaker: Well, I mean, most people don't assume that they're going to go broke on their retirement date.
Mr. Stewart: --I think most people assume their income will go down.
Unknown Speaker: --It's an income supplement really, isn't it?
I mean, it's not a benefit that accrues only if one's income drops below a certain level.
If the person retires and his rich uncle leaves him millions the next day, he's still going to get his benefit, so it doesn't seem to have that feature of the income casualty that sets it going.
Rather, it has a feature of income planning.
Mr. Stewart: Well, it is a contractual relationship.
It goes on regardless of the individual circumstances of the annuity purchaser, but the fact remains, from the company's standpoint and from the purchaser's standpoint, they are pooling their risk with the other purchasers of that annuity product.
Unknown Speaker: Well, I grant you that there is a pooling going on, and I grant you that there is an actuarial feature in deciding what you're going to charge for what you do, but I don't think there's such a neat analogy as suggested by the notion that what is being insured against is loss of income from living too long, because the triggering events are simply different from what they are in a casualty circumstance, and I just... I guess that's why I think the analogy is weak rather than strong.
Mr. Stewart: Your Honor, I can only refer you to the many insurance treatises which deal with exactly this issue, and agree that that is what people are doing, and if you look, people are buying life contingency annuities.
They want to have that... they are preserving income for their lives.
That is, it seems to me is direct support for what we are trying to say here.
Unknown Speaker: Mr. Stewart, why isn't it appropriate to look at this, as Justice Breyer I think suggested, from the point of view of the bank's customer, the notion that the customer has savings, wants to invest the savings for a return that will be there for a rainy day, for later years, and that an annuity is today a substitute for that, more attractive, but it serves the same customer who has savings and wants to invest the savings for a return.
So the bank is serving that very same need that was once served in a very simple way and now there are more ways to serve it.
Why isn't that... if you look at the bank serving its customer, the depositor, why aren't those two very much alike?
Mr. Stewart: They... the difference is, I think, that what you get depends on how long you live.
It is a different type of arrangement both from the issuer's standpoint and the purchaser.
If the purchaser really wanted simply to save, the purchaser could buy a term certain annuity.
This is a very small part of the annuity market.
That is just an annuity for 10 years.
It doesn't matter whether you live or die.
Your heirs or beneficiaries will get that annuity payment if you die before the end of it.
That is a very small part of the market, and the--
Unknown Speaker: And that you could sell, you say.
Mr. Stewart: --We think... the pooling of risk is not present there, yes, that's true.
It is not clear that NationsBank has asked to do that, or the Comptroller has raised the issue.
I don't think it's before the Court.
But we do recognize the pooling of risk is not present there.
Those annuities are regulated as insurance.
Unknown Speaker: In the brief for the Federal petitioners at pages 34... 33 and 34, there's a footnote that seems to indicate that, while small, it's not that small, the kind of annuity that doesn't depend on the length of one's life.
Mr. Stewart: Well, it is a small part of the market, and my point was simply that the purchaser's annuities are not taking the pure tax-deferred benefit which is being posited by the Court here, but rather, they're choosing the product which provides also this insurance characteristic, the life definition of their benefits.
Unknown Speaker: Mr. Stewart, would a purchase by an elderly person of a life estate in a retirement home be insurance within your definition?
Mr. Stewart: I think not, Your Honor.
Unknown Speaker: Why not?
Mr. Stewart: Because that is an individualized transaction.
Unknown Speaker: I know, but it's the same subsidy.
The people who live a short period of time subsidize those who live longer.
It's exactly the same thing.
Mr. Stewart: Your Honor, I think--
Unknown Speaker: And it's the same risk, the same... I don't understand the difference.
Mr. Stewart: --I think that we also do have to look at the traditions of regulation of insurance in this country at some point, and at that point--
Unknown Speaker: Yes, but if you do that to much--
Mr. Stewart: --I don't want to be--
Unknown Speaker: --If you do that, don't you fall into your opponent's argument that business changes over the times, and what might not have been insurance 50 years ago can be considered insurance today?
Mr. Stewart: --If annuities had changed in any material way, that would be possibly true, but we think annuities in their core really are exactly the same as they were 100 years ago or 50 years ago or 80 years ago.
Unknown Speaker: Were variable annuities sold at the time these laws were passed?
Mr. Stewart: Variable annuities are the single innovation, you're exactly right.
Unknown Speaker: They were not sold then.
It tended to be--
Mr. Stewart: They were not sold then.
They came on the scene in the fifties.
About 75 to 85 percent of the market, according to the petitioner's source, is currently fixed annuities, not variables.
The variable annuities have been held by this Court to include a securities element, but there's also an insurance element that is retained in the variable annuities.
Unknown Speaker: --So as to the variables, do you think that falls within the enumerated powers of banking under the seventh section, to the extent they're securities?
Mr. Stewart: No, Your Honor.
The enumerated powers of banking have been crystallized, really, as three: taking of deposits, the extending of credit, and the exchanging of credits.
It has nothing to do... the sale of a variable annuity has nothing to do with any of those.
Now, a question has been... and it's been unclear, I think, in the argument from petitioners as to whether the second sentence of this provision, section 24(7), is really at issue here, the business of dealing in stocks and securities.
The Comptroller expressly excluded reliance upon that provision.
The court of appeals did not rely on it, either, so we think that question is not before the Court.
Unknown Speaker: Well, I'm curious, though, inasmuch as this Court has said those instruments are securities, whether it wouldn't fall squarely within that provision.
Mr. Stewart: We think not, because they're a different kind of security, and here it's necessary to harmonize the provision there with the provision of section 92, which we do think has a powerful negative implication, because variable annuities have both security and insurance characteristics.
I think Justice Kennedy's question was on point on that.
They do have both characteristics.
Banks have been allowed to sell securities, but the assumption in that has been, these are tradable securities.
Annuities are not like that.
They're not that kind of security, and in order to harmonize that, because they're also insurance, harmonize it with section 92, it's necessary that they not be an instrument that can be handled by national banks.
Unknown Speaker: Mr. Stewart, you may already have alluded to this, but let me ask you, with respect to your argument that in fact the enumerated powers are essentially exclusive, do you agree that the final sentence of the seventh section makes no sense, except on the congressional assumption that the enumeration was not exclusive, because there's nothing in the enumeration that would be taken to refer to stocks and securities, so Congress must have assumed that in fact the so-called powers incident to banking were broader.
How do you deal with that?
Mr. Stewart: Well, I think there's some confusion here, because the initial stock and security trading power for national banks was created by the McFadden Act in 1927, and that was an affirmative grant of power.
In the 1930's, the Glass-Steagall Act amendment that and basically rendered it in the current form to prevent national banks from selling other types of products.
What this Court has said is, that was the first time national banks were authorized to sell them.
The Comptroller, in a technique somewhat akin to what has happened... he's done here did, prior to that, tell national banks that they could, in fact, start to sell debt securities, and there was some development in that area which became very controversial during the depression.
Unknown Speaker: So that this was essentially just a kind of... perhaps a misleading and untidy way to deal with what Congress took as a fait accompli?
Mr. Stewart: I think that's right.
Unknown Speaker: Why shouldn't Congress... why shouldn't we deal with a fait accompli in this case?
The banks are selling all of this stuff.
Mr. Stewart: Well, I think if, in fact, that issue, the bank's ability to sell securities, had come to this Court in 1925, the decision of this Court would have had to be that they lacked the power to do so.
Unknown Speaker: Okay, but now we're in the situation in which the 1925 analogue doesn't work with respect to annuities, either.
Mr. Stewart: Well, I think it does.
Unknown Speaker: In other words, if it was appropriate... I guess my question is, if it was appropriate for Congress to write the final sentence on the assumption that... and I think it makes no logical sense otherwise... on the assumption that the bank's incidental powers could include the power to sell stocks and securities, and Congress did that because the... you know, the cat was out of the bag, then why isn't it equally appropriate for us to construe the first sentence on that same set of assumptions, which I gather would put us in the same interpretive position that the State of New York is in with respect to its statute, which was taken as the model for this?
Mr. Stewart: Your Honor, I think we're getting this turned upside down, because in fact Congress had to grant that power because the banks didn't have the power, just as, if banks are really to have the power to sell annuities, Congress is going to have--
Unknown Speaker: But if that's all Congress was doing, Congress... all Congress had to say is, they can sell stocks... they can broker stocks and securities, and that isn't what it said.
It wrote a sentence which... the logical form of which implies that the power is there.
Mr. Stewart: --Your Honor, I don't read it that way.
I think the form of that statute has to be understood in the sequence between the McFadden Act and the Glass-Steagall Act, which cut back on a preexisting power which had been created only 6 or 7 years earlier, and that accounts for the form of it.
There was a preexisting power, but it was unauthorized, and we think that by Congress authorizing it, going to that step--
Unknown Speaker: I don't understand.
What's an unauthorized preexisting power?
Mr. Stewart: --By which I mean it had been approved by the Comptroller but was not legal, and that if it had been tested in the courts it would have been found illegal.
Unknown Speaker: Right, and if all Congress meant to do was to legalize what the Comptroller had been doing, the sensible way to do that would have been to say, it is lawful for banks to sell stocks and securities, but it didn't do that.
It wrote a sentence which seems to imply that they had a general power to do that.
Mr. Stewart: Your Honor, I think if you look back, and this issue has not been briefed in this case, and it has not been developed by the Comptroller, and it has not been developed in the court of appeals, so this Court is coming to it in the first instance, but if you go back and look at the McFadden Act and the way that was written, then that will explain why the Glass-Steagall Act, that sentence now is written in such a way--
Unknown Speaker: Are you saying that in the McFadden Act, the text of which is not incorporated here, there was an affirmative grant of authority to sell stocks and bonds?
Mr. Stewart: --I think that's what this Court found in Clarke v. Securities Industries Association, yes.
Unknown Speaker: When did this sentence that we're talking about, the second sentence, the business of dealing in securities, when was that sentence enacted by Congress?
Mr. Stewart: Well, it's first form was enacted in 1927 in the McFadden Act, and then it was amended in the Glass-Steagall Act.
Unknown Speaker: The McFadden Act was '27, the Glass-Steagall Act was '33, or--
Mr. Stewart: '33 or '34.
Unknown Speaker: --I'm sorry, I don't quite understand, because I have in front of me two sentences from section 24(7).
We know what those two sentences are, right?
Now, are you saying that in the statute books there's some other sentence some place that affirmatively gives to banks the authority to sell securities?
Mr. Stewart: No.
I'm saying the--
Unknown Speaker: No.
Mr. Stewart: --second sentence was rewritten.
Unknown Speaker: So the answer's no.
So the only sentences... I'm just looking at the words.
I just want to look at the words.
You're appealing to the legislative history, I think, aren't you?
Mr. Stewart: Well--
Unknown Speaker: --I'm just not looking at the legislative history.
I'm just looking at the words.
Mr. Stewart: --I don't think that was a helpful--
Unknown Speaker: He wants to--
Mr. Stewart: --I'm referring to the development of the statute.
Unknown Speaker: So you're... I misunderstood you, too.
You're saying that the predecessor sentence of the sentence which now is the final one in section 7 extended that authority.
That's what you're saying.
Mr. Stewart: Authorized those activities, yes.
Unknown Speaker: Yes.
I understand you.
Mr. Stewart: I did want to talk just a second about the sequence of the statutes here, because it seems to us very important.
Section 24(7) was adopted in 1863.
It included an... the incidental powers clause without change for the last 130 years.
In 1915 and 1916, almost 50 years... more than 50 years later, the Federal Reserve Board and the Comptroller concluded... and now it's... the national banks had no insurance powers.
In fact, the Comptroller said insurance was an outside business naturally belonging to others.
Now, he then asked for a statute to be enacted to allow the banks and small towns, national banks and small towns to exercise these powers, and specifically he specified that it would be unwise and undesirable to give it to the banks in larger towns.
This sequence, it seems to us, is very powerful, because the Comptroller is saying that in 1990 he's all of a sudden discovered that back in 1863 that statute actually authorized insurance sales and annuity insurance... sales of annuities all along, and I think that renders the entire sequence in 1915 and 1916 really--
Unknown Speaker: I don't think the argument was all along.
I think it was, the business of banking changes over time, and I think as Mr. Rosenthal put it, this statute is like some other statutes that are meant to govern a business.
The phrase, "restraint of trade" may mean something different today than it meant when it was originally put in the Sherman Act.
Mr. Stewart: --Well, but this Court in construing section 24(7) has been very careful to tie any extension to those powers to the express powers enumerated in section 24(7).
As Justice Sutherland wrote in the First National Bank of St. Louis v. Missouri, you can only carry into effect those powers which are granted.
Incidental powers can only be used in that regard.
Unknown Speaker: It's not very helpful to limit somebody to the business of banking if the business of banking means anything that banks want to do.
Mr. Stewart: Yes.
Unknown Speaker: And do in sufficient numbers.
Mr. Stewart: Yes, and of course, that's a very fair point, which is, the statute does not say the business of banks.
It says, the business of banking, which must mean something more, and indeed--
Unknown Speaker: Do you take the position... I just want to be sure.
Do you take the position that the concept of banking was frozen as of the date of the enactment of the statute?
Mr. Stewart: --Absolutely not.
Unknown Speaker: Well then, you disagree with Justice Scalia's question, I gather.
Mr. Stewart: Well... I don't think that was the import.
Unknown Speaker: I think it was the--
Mr. Stewart: Perhaps I misread it.
Unknown Speaker: --Well, maybe I didn't understand it, then.
Mr. Stewart: The... we think that the express powers given to banks, the way those are carried into effect will change over time.
For example, how you receive deposits, will become safety deposit boxes... those have been approved by this Court.
You can go to ATM machines.
These are all developments, but it relates to the express powers of the banks.
The banks... the business of banking will change.
Unknown Speaker: Well, for example, there's a power, loaning on personal security.
Does that mean that the note... the person who gets the note must be personally liable on every note that the bank makes?
For example, lending money on... mortgaging real property, or chattel mortgages, all that... how do you justify all that?
Mr. Stewart: I think it is all part of the extension of credit, which is authorized.
Unknown Speaker: Any extension of credit is authorized?
Mr. Stewart: Yes.
Unknown Speaker: I don't see that.
Where is extension of credit authorized?
Mr. Stewart: I think that has been the construction of the statute.
Unknown Speaker: Which of the five powers?
Mr. Stewart: Your Honor, I don't have it before me.
Unknown Speaker: Well, the only loaning is by loaning money on personal security.
Mr. Stewart: That has been read to involve the extension of credit, because personal security wouldn't apply to corporations as well.
Unknown Speaker: It wouldn't... or... and nobody guarantees the note.
It's just secured by a piece of real estate.
I don't know how that fits in this.
Mr. Stewart: It has been read to--
Unknown Speaker: Yes.
Mr. Stewart: --Extension of credit generally, and we think that is fair.
That is contemplated.
Unknown Speaker: Even though it doesn't say so?
Mr. Stewart: I think it does say so, Your Honor.
What it does not say is that there's any power to sell insurance, and I think if you look at section 92 and what Congress was doing in response to what the Comptroller said, Congress was, in fact, responding to this need only to grant a small amount of insurance, and as this Court has held, powers not conferred by Congress are denied in that sort of setting.
Unknown Speaker: If you can generalize with respect to the extension of credit, why can't you generalize with respect to the investment power, which happens to be receiving deposits?
People today, instead of just making deposits, want other ways of making investments.
If generalization is good with respect to credit, why isn't generalization good with respect to investment?
Mr. Stewart: Because the bank itself is not receiving deposit here.
It is acting as an agent for an insurance company--
Unknown Speaker: Well, that's--
Mr. Stewart: --in a context where--
Unknown Speaker: --that is to say we won't generalize, but my question is, why don't you generalize?
Mr. Stewart: --Well, I think in this instance, section 92 indicates that Congress addressed this and specifically indicated that it did not want banks to participate in this kind of activity.
Thank you, Your Honor.
Chief Justice Rehnquist: Thank you, Mr. Stewart.
The case is submitted.
Argument of Justice Ginsburg
Mr. Ginsburg: The second opinion, I will announce covers the consolidated cases NationsBank v. Variable Annuity Life Insurance Co. and Ludwig v. Variable Annuity Life Insurance Co.
We hold in this unanimous decision that national banks may serve as agents in the sale of annuity.
Annuities are contracts under which the issuer receives premiums from the purchaser in exchange for a continuing series of payments.
The Comptroller of the Currency, who is the officer Congress charged with superintendence of national banks, determines that Federal Law permits annuity sales as a service to bank customers.
Variable Annuity Life Insurance Company, a company engaged in the sale of annuities challenged the Comptroller's decision.
The United States District Court for the Southern District of Texas upheld Comptroller's ruling, but the Court of Appeals for the Fifth Circuit disagreed and declared that the controller had incorrectly interpreted the National Bank Act.
We granted the petitions for review of the Comptroller and Nations Bank, the national bank given permissions to broker annuities and we now reverse the decision of the Fifth Circuit.
When the interpretation of an expert administrator such as the Comptroller fills a statutory gap in a way that is reasonable in light of Congress’ revealed design Courts respect the administrator’s judgment.
The Comptroller we conclude reasonably typed annuity sales as incidental to the business of banking under the relevant provision of the National Bank Act.
Further, he reasonably classified annuities as investments not insurance under the statutory prescription in point.
As the Comptroller found by making an initial payment in exchange for a future income stream, the bank customer who purchases an annuity from the bank is deferring consumption, setting aside money for retirement, future expenses, a trip around the world or a rainy day.
For her, an annuity is like putting money in a bank account, a debt instrument, or a mutual fund and attending to those investments for customers is plainly within “the business of banking.”
As the comptroller further found, the customer’s investment objectives distinguished annuity from insurance, the primary purpose of which is to indemnify loss, because the comptroller’s reading of a national bank Act, is reasonable.
We defer to that reading.