Document: 513 U.S. 251115 S.Ct. 810130 L.Ed.2d 740 NATIONSBANK OF NORTH CAROLINA, N.A., et al., Petitioners,v.VARIABLE ANNUITY LIFE INSURANCE CO. al. Eugene A. LUDWIG, Comptroller of the Currency, Petitioners, v. VARIABLE COMPANY Nos. 93-1612 and 93-1613. Supreme Court United States Argued Dec. 7, 1994. Decided Jan. 18, 1995. Syllabus * Petitioner national bank its brokerage subsidiary applied to charged by Congress with superintendence banks, allow act as an agent in sale annuities. Under proposed plan, customers could purchase a "variable annuity"—which invests payments designated way yields income that varies investment performance—a "fixed" annuity —which does not vary—or hybrid account. Granting application, typed sales "incidental" "the business banking" under National Bank Act, 12 U.S.C. § 24 Seventh. The further concluded annuities are "insurance" within meaning 92; provision, expressly authorizing banks towns no more than 5,000 people sell insurance, arguably implies larger may insurance. Respondent Variable Annuity Life Insurance Co. (VALIC), which sells annuities, filed suit challenging Comptroller's decision. District upheld conclusions permissible reading Act. Reversing Court's judgment, Appeals held 92 bars located small from selling rejected conclusion insurance 92. Held: determination serve agents is reasonable construction Act therefore warrants judicial deference. Pp. 3-13. (a) If statute silent or ambiguous respect precise question at issue, reviewing court must determine whether answer reached agency statute's enforcement based on construction. expert administrator's fills gap defines term light Congress' revealed design, judgment given controlling weight. 4-5 (b) respects "incidental powe[r] . necessary carry In interpreting include financial instruments, better comprehends Act's terms VALIC, whose confines five activities listed Seventh's first sentence endeavors incidental thereto: discounting negotiating evidences debt; receiving deposits; buying money; making loans; obtaining, issuing, circulating notes. section's second sentence, limits banks' "dealing securities," recognizes otherwise have authority addresses, even though specifically enumerated; thus evidenced intent accord "to through customer services circumscribed activities. has discretion, bounds, permit banking beyond those sets forth exemplary. Here, reasonably qualifies part instruments. Modern sophisticated standard savings deposits old, essentially same need. By providing opportunity invest one options, offering instruments kind congressional authorization permits them broker. 5-8. defers properly classified investments, 92's meaning. classification tax deferral features distinguish least interpretation legislation. A key feature it indemnifies loss. As observes, important purpose functionally similar other investments typically sell. And fixed closely resemble do variable too significant debt Moreover, mindful often packaged chose classify two together. foregoing, need reach 92, negative implication, precludes places populous 8-12. 998 F.2d 1295 (CA5 1993), reversed. GINSBURG, J., delivered opinion for unanimous Court. Edward C. DuMont, Washington, DC, petitioners No. Steven S. Rosenthal, 93-1612. David O. Stewart, respondents. Justice GINSBURG 1 These consolidated cases present determined federal law such service customers. Specifically, considered issue Rev.Stat. 5136, amended, Seventh (1988 ed. Supp. V). Southern Texas but Fifth Circuit We satisfied Accordingly, we reverse Appeals. 2 NationsBank North Carolina, Charlotte, sought permission pursuant CFR 5.34 (1994), Annuities contracts purchaser makes premium issuer exchange series payments, continue either period life beneficiary. When "variable" annuity, purchaser's money invested vary performance. classic contrast, vary. sell, purchasers direct their variable, fixed, account, would be allowed periodically modify choice. issuers various companies. See Letter J. Michael Shepherd, Senior Deputy Comptroller, Robert M. Kurucza (Mar. 21, 1990), App. Pet. Cert. 93-1612, pp. 35a-36a (Comptroller's Letter). 3 granted NationsBank's application. He broker addressing people, did impede his approval; purposes explained, rank "insurance." 41a-47a. 4 challenged VALIC seeking declaratory injunctive relief Administrative Procedure 5 706(2)(A), 28 §§ 2201, 2202 summary favor NationsBank. Ins. Clarke, 786 F.Supp. 639 (1991). (1993). Relying decision Saxon Georgia Assn. Independent Agents, Inc., 399 1010 (1968), then view F.2d, 1298-1302. Four judges dissented failure grant rehearing en banc. dissenters maintained panel had accorded due deference statutory interpretations. Clark[e], 13 F.3d 833, 837-838 1994).1 certiorari. 511 ----, 114 2161, 128 885 (1994). II 6 Authorizing "carry banking," provides shall power — 7 "To exercise all powers banking; promissory notes, drafts, bills exchange, coin, bullion; loaning personal security; dealing securities stock [bank] limited purchasing without recourse, solely upon order, account of, customers, case own underwrite any stock. ." 8 administrator supervision see 1, 26-27, 481, bears primary responsibility surveillance authorized reiterated: 9 " 'It settled courts should give great weight regulatory adopted statute. Currency laws extent invocation this principle deliberative these laws.' Clarke Securities Industry Assn., 479 388, 403-404, 107 750, 759, 93 757 (1987) (quoting Investment Company Insti tute Camp, 401 617, 626-627, 91 1091, 1097, 367 (1971)). 10 formulation now familiar, when confront exposition, inquire clear" issue." Chevron U.S.A. Inc. Natural Resources Defense Council, 467 837, 842, 104 2778, 2781, 81 694 (1984). so, "that end matter." Ibid. But "if specific agency's statute." Id., 843, S.Ct., 2782. legislature's "controlling weight." 844, 11 invokes "power [of banks] wide variety instruments," 38a, considers "part [banks'] traditional role intermediaries," ibid., banking." Seventh; also Interpretive 494 (Dec. 20, 1989) (discussing bring activity "business banking") (cited 38a). construes independent authority; he reads set thereafter exemplary, exclusive. argues contrary clear because relies—"broker[ing] instruments"—is specified Brief 35-45. According after words exclusive—banks confined thereto. 35-36. attributes significance think terms. Seventh, limiting presupposes insertion limitation decades initial adoption sense only if already deal securities, presumably encompassed language dates 1863. argues, however, was imposed Glass-Steagall 1933, presupposed McFadden 1927. 46. While current wording derives June 16, ch. 89, 48 Stat. 184, earlier bolster VALIC's case, too, did. Feb. 25, 1927, 2(b), 44 1226 ("Provided, That hereinafter recourse. ."); supra, U.S., 407-408, 761-762 (even before conducted transactions widespread basis); F. Redlich, Molding American Banking: Men Ideas, pt. 2, 389-393 (1951) (describing prominent early banks).2 B 14 just determined, intent, described covers examples enumerated. to, banking. observed, 38a,3 widely recognized products. D. Shapiro & T. Streiff, (1992) (in contrast "[a]nnuities primarily products"); Appleman Appleman, Law Practice 84, p. 295 (1981) ("Annuity rather insurance."). 15 payment future stream, deferring consumption, setting aside retirement, expenses, rainy day. For her, like putting instrument, mutual fund. Offering accounts acting funds familiar parts See, e.g., Board Governors, FRS, 468 207, 215, 3003, 3008, 82 158 (1984) ("Banks long arranged accommodation customers."); First Nat. Hartford Hartford, 273 548, 559-560, 47 462, 466, 71 L.Ed. 767 (1927) (banks mortgages they originated acquired discount). 16 sum, modern Hence, banking."4 III 17 alternative, ed., V) agent. section provides: 18 "In addition vested [national doing place population exceed thousand inhabitants fire, life, company authorities State said State, soliciting collecting premiums policies issued company. parties disagree about accept that, hand, 19 Again, contends plain Congress, else unreasonable. support position notes traditionally been sold product inevitably render example, companies offered loans security 1731, 562 (1967), loan thereby become 20 asserts most regulated intended define reference state law. Treatment law, contextual. generally defining regulators. 1300, n. (citing statutes). diverse settings, resisted lump re New York Underwriters, Banking Dept., 83 N.Y.2d 353, 363, 610 N.Y.S.2d 470, 475, 632 N.E.2d 876, 881 (1994) (rejecting "assertion [state-chartered] sell," "includes 'annuities' description 'kinds authorized' "); Estate Rhodes, 197 Misc. 232, 237, 94 406, 411 (Surr.Ct.1949) (annuity qualify estate exemption applicable insurance); Commonwealth Metropolitan Co., 254 Pa. 510, 513-516, 98 1072, 1073 (1916) (annuities pay received State); ex rel. Equitable Assurance Soc. Ham, 54 Wyo. 148, 159, 88 P.2d 484, 488 (1939) (same). 21 our decisions underscore, characterization fitting certain contexts unsuitable others. Atlantic Cleaners Dyers, States, 286 427, 433, 52 607, 608-609, 76 1204 (1932) ("meaning words] well meet law"; legislature [they] each instance"); cf. Cook, "Substance" "Procedure" Conflict Laws, 42 Yale L.J. 333, 337 (1933) ("The tendency assume word appears legal rules, so connection purpose, precisely scope them, runs discussions. It tenacity original sin constantly guarded against."). plainly require automatic here. regime best served classifying according functional characteristics. ruled out course, Chevron, 2781; courts, therefore, cause dictate constraint espouses. 22 some mortality risk parties. pays sum and, periodic throughout, beyond, purchaser. pricing rely actuarial assumptions how will live. 23 cognizant similarity between points less salient characteristic contemporary Many currently available, both term. Instead provide over years; dies ends, balance paid estate. presence necessarily interest real property although imposes Tr. Oral Arg. 42. Some conventional similarly impose risk. Note, Reverse Mortgages Due-on-Sale Clause, 32 Stan.L.Rev. 143, 145-151 (1979). charges inconsistency. evidence, refers 1978 letter member staff describing arrangements. 16-17; Charles Byrd, Assistant Director, Legal Advisory Services Division, Office (June 1978), Opposition, 1a-2a (Byrd note, initially, proposal disfavored clearly involve agent, principal. Byrd 1a ("[T]he group policy insurer trust accounts."). Furthermore, unlike here, purport represent position. Compare ("It my .") 35a OCC's announced [prior 1990 letter]. Since I find neither nor supervisory reasons object proposal, Subsidiary proceed."). Finally, change might reduce, eliminate, owe reasoned determinations. Good Samaritan Hospital Shalala, 508 113 2151, 124 368 (1993) NLRB Iron Workers, 434 335, 351, 651, 660-661, 586 (1978)). 25 short, reasonable. 44a. Black's Dictionary 802 (6th 1990) (first definition "contract whereby, stipulated consideration, party undertakes compensate loss subject perils"). 7-8. ibid. 26 27 defer implicated section. Reversed. syllabus constitutes prepared Reporter Decisions convenience reader. Detroit Lumber 200 321, 337, 282, 287, 50 499. observed court's active were disqualified participating case. F.3d, 834. hold enumerated discretion authorize kept bounds. Ventures distant instruments—for operating general travel —may referred (approving agricultural, oil, metals futures). Assuring deviate practices, "will principal stake incur rate risks." 48a.

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