Court Opinion

ID: 9461649
Source: CourtListenerOpinion
Date Created: 2023-08-04 22:20:27.017615+00
Date Added: 2024-06-11T17:37:11.275752
License: Public Domain

RONEY, Circuit Judge
(dissenting):
I respectfully dissent for the reasons set forth in Judge Alaimo’s opinion in this case, and in Judge Steven’s dissent in Economy Finance Corp. v. United States, 501 F.2d 466 (7th Cir. 1974), cert. denied, - U.S. -, 95 S.Ct. 1328, 43 L.Ed.2d 425 (1975). Had Congress desired to define a life insurance company in terms of the ultimate risk, it could have easily done so. The judicial overlay to that effect is an unnecessary intrusion into the legislative process. Reserves being the lodestar, they should control. Although the majority holds there was no substance to the reinsurance agreement, without even a bow to the clearly erroneous rule, the district court having found factually to the contrary, there was certainly legal substance. The rein-surer was required to commit its assets to reserve status for insurance purposes and to pay tax on the reserve income for tax purposes. It bore all of the legal consequences of required reserves, the reinsured none. This decision throws confusion into a statutory enactment that deserves simpler application.