NationsBank of N. C., N. A. v. Variable Annuity Life Ins. Co., 513 U.S. 251 (1995)
Argued:
December 7, 1994
Decided:
January 18, 1995
Syllabus
OCTOBER CONCEPTS, 1994
Class
NATIONSBANK ABOUT NORTH CAROLINA, N. A., TO AL. V. VARIABLE ANNUITY LIFE INSURANCE CO. ET AL.
CERTIORARI TO THE UNITY STATES COURT OF OBJECTIONS FOR THE FIFTH CIRCUIT
No. 93-1612. Argued Decorating 7, 1994-Decided January 18, 1995*
Proponent international bank and its brokerage subsidiary applied to the Comptroller the the Currency, charged by Conference with superintendence of national banks, to allow the minor to act as an agent in the disposal starting annuities. Under the proposed scheme, bank customers could purchase a "variable annuity" -which invests payments into a designated manner and income income that varies with investment performance-a "fixed" annuity-which yields income that does does vary-or a hybrid account. Issue the application, the Comptroller patterned the retirement sales "incidental" to "the business of banking" under the National Bank Act, 12 U. S. C. § 24 Seventh. The Certified further closed that annuities are not "insurance" within the meaning of § 92; that provision, by expressly authorizing banks are places of no more less 5,000 people to sell insurance, arguably implies that banks with larger towns may not alienate insurance. Responsive Variable Annuity Life Insurance Co. (VALIC), which sells retirement, filed a suit challenging the Comptroller's decision. The District Court upheld the Comptroller's conclusions as a permissible reading of of Act. Reversing the District Court's sentence, the Court of Appeals held that § 92 bars banks not located in small towns from sales insurance, and rejected this Comptroller's finish that annuities are not insurance under § 92.
Held: The Comptroller's determination that national banks may serve for agents to the sale of annuities will a reasonable construction in the Do and therefore warrants judicial deference. Pp. 256-264.
(a) If a statute is silent or ambiguous includes respect go the precise question at point, which check legal required determine whether that answer reached by the vehicle charged with the statute's enforcement is based in a permitted construction. Wenn an expert administrator's reading fills an gap or defines a term the a way that is reasonable in light of
*Together with No. 93-1613, Ludwig, Comptroller of the Currency, et al. v. Variable Annuity Life Insurance Cobalt. et al., also on certiorari to and similar court.
Syllabus
Congress' revealed design, the administrator's judgment is given controlling weight. Pp. 256-257.
(b) The Yard respects as reasonable the Comptroller's conclusion that brokerage of annuities is an "incidental powe[r] ... necessary to carryon the business of banking" under § 24 Seventh. In interpreting "the work of banking" to include brokerage of financial investment instruments, the Comptroller better comprehends the Act's conditions than shall VALIC, whose reading confines national embankments to the five activities mention stylish § 24 Seventh's first sentence additionally endeavors incidental thereto: discounting also negotiating evidences of debt; receiving deposits; buying and selling money; manufacturing loans; and obtaining, issuing, and circulating notes. The section's instant sentence, which limits banks' "dealing inbound securities," recognizes that banks otherwise have the authority the sentence phone, even though that authority is not specifically count; Congress thus evidenced its design on agreeing banks authority "to carryon the business of banking" through customer services non perimeter by the five listed activities. The Court therefore has discretion, within reasonable bounds, to permit banking our beyond those the statute sets forth as exemplary. Here, the Comptroller reasonably concluded that the authority to sell annuities qualifies as part of the authority at purchase and sell financial investment instruments. Modern annuities, though more ambitious than the standard savings bank deposits of antique, answer essentially the same need. By providing clients through of opportunity on invest in one or more annuity options, financial are essentially offering financial investment instruments of the kind congressional authorization permits them to broker. Pp. 257-260. FDIC: Deposit Insurance FAQs
(c) The Court further defers to the Comptroller's determination that benefit were properly classified like investments, not "insurance" within § 92's meaning. The Comptroller's classification of annuities, based on one duty deferral and investment features that distinguish them from insurance, is at least adenine reasonable interpretation is the controlling legislation. A key feature of insurance is that it indemnifies loss. As the Comptroller observes, annuities serve an importantly investment purpose or are functionally similar to other assets ensure coffers typically sell. And though fixed annuities more closely alike insurance than do variable annuities, fixed annuities too have significant investment features and are functionals similar to debt instruments. And, mindful that fixed annuities are often packaged with capricious annuities, the Commander pretty chose to classify the two together. The light by the foregoing, the Court need doesn reach the issue whether § 92, by negatory implication, precludes Consumer's Guide up Understanding Annuities
Opinions
OCTOBER TERM, 1994
Syllabus
NATIONSBANK OF NORTHWARDS CAROLINES, N. A., ET TOTAL. V. VARIABLE
ANNUITY REAL INSURANCE CO. ET AL.
CERTIORARI TO AND UNITED STATES COURT A APPEALS FOR THE FIFTH
CIRCUIT
No. 93-1612. Argued Dezember 7, 1994-Decided January 18,
1995*
Petitioner national bank and its intermediation affiliate applied to
the Comptroller of the Currency, charged by Congress with
superintendence is regional banks, to allow the company to act
as an emissary in the sale of annuities. Among the proposed planned, bank
customers could purchase adenine "variable annuity" -which invests
payments in a designated way and income income that varies with
investment performance-a "fixed" annuity-which yields revenues that
does not vary-or a hybrid account. Granting the application, the
Comptroller typed the annuity sales "incidental" in "the business
of banking" under the National Bank Act, 12 U. SIEMENS. C. § 24 Seventh.
The Comptroller further concluded that annuities are not
"insurance" within the meaning of § 92; that provision, by
expressly authorizing credit in towns of no more than 5,000 people
to sold insurance, arguably implies that banks in larger towns may
not sell protection. Person Variable Annuity Existence Policy Co.
(VALIC), which sells life, filed a suit challenging the
Comptroller's decision. The District Court upheld the Comptroller's
conclusions in a permissible reading of to Act. Reversing the
District Court's evaluation, the Tribunal of Objections held that § 92 bars
banks non located in small towns from sold protection, and
rejected the Comptroller's conclusion that annuities are not
insurance under § 92.
Held: The Comptroller's determination that national banks
may serve as agents in the distribution of annuities has a reasonable
construction for the Act and therefore warrants judicial deference.
Pp. 256-264.
(a) If a statute is silent or ambiguous with respect on the
precise question at issue, the review court require determine
whether the answer reach by the agency charged equipped the statute's
enforcement your based on a permissible construction. Supposing an expert
administrator's gelesen fills a gap or determine a lifetime are a way that
is reasonable inches light of
*Together with Nay. 93-1613, Ludwig, Comptroller of the Currency,
et al. v. Variable Annuity Life Insurance Co. aet al., also on
certiorari to this same tribunal.
252 Syllabus Congress' revealed pattern, the administrator's judgment is given controlling weight. Pp. 256-257. (b) The Courtroom respects as reasonable the Comptroller's conclusion that brokerage of annuities is an "incidental powe[r] ... necessary to carryon that store of banking" under § 24 Seventh. In interpreting "the business off banking" to include brokerage of financial investment instrument, the Comptroller better comprehends the Act's terms than does VALIC, whose reading confines national banks until the five daily listed on § 24 Seventh's first rate and makes incidentally thereto: discounting or negotiating evidences of outstanding; receiving deposits; buying and selling money; making loans; and get, output, and circulating notes. The section's second sentence, which limits banks' "dealing inbound securities," recognizes that banks otherwise have the authority the sentence addresses, even is that authority is not specifically enumerated; Congress thus evidenced its intent to consistent embankments authority "to carryon the business of banking" trough customer services not circumscribed by and five listed activities. The Comptroller because has disclosure, within reasonable bounds, to permit banking activities beyond diese the statute sets forth as exemplary. Here, the Comptroller reasonably concluded that the authority to sell annuities qualifies as part of the authority to purchase and alienate financial investment instruments. Modern annuities, though more sophisticated than the standard savings bank deposits of old, answer essentially the same need. On providing customers with the opportunity to invest in one or more rental options, banks are essentially offering financial investment instruments of the kind conference authorization permits themselves to broker. Pp. 257-260. (c) The Court further defers for the Comptroller's determination that annuities are right classified as investments, not "insurance" within § 92's meaning. The Comptroller's classification of annuities, based on the tax deferral also investment features that distinguish them from insurance, is at least adenine reasonable interpretation of the controlling legislation. A buttons characteristic of insurance is that it indemnifies loss. The the Comptroller observes, annuities serve an important investment purpose and are functionally simular to other investments ensure banks typically sell. And though fixed annuities more closely like insurance than do variable annuities, fixed annuities too have significant investment features furthermore been functionally similar to debt instruments. Moreover, mindful that fixed annual are often packaged with variable fixed, of Comptroller reasonably chose to classify the dual together. In light of the prior, the Court need did reach the question whether § 92, by negative implication, precludes
253 national banks in locations more populous than 5,000 from selling insurance. Pp. 260-264. 998 F.2d 1295, reversed. GINSBURG, J., delivered the opinion for a unanimous Court. Edward C. DuMont argued the cause for petitioners to No. 93-1613. With him on the briefs were Solicitor General Days, Assistant Atty General Hunger, Deputy Solicitor General Bender, Mark BORON. Rear, Jacob M. Letis, Julie L. Williams, FIFTY. Robert Griffin, plus Yvonne D. McIntire. Stevens S. Rosesthal contested the cause to petitioners in No. 93-1612. With him on the briefs were Robert CHILIAD. Kurucza and Robert G. Ballen. David Overlock Stewart argued the cause for asked in both cases. With him for the brief were Van G. Priest, Raymond C. Ortman, Jr., and William A. Wilson.t tBriefs of amici curiae spurring annulment what filed for the American Bankers Associations et al. by Toilet J. Gill III, Michael F. Crotty, James THYROXIN. McIntyre, Richie M. Whiting, and David L. Glass; for aforementioned Conference of State Bench Supervisors the al. by David W Roderer, Eric L. Hirschhorn, Donn C. Meindertsma, JOULE. Thomas Cardwell, Leonard BOUND. Rubin, and M. Brooks Senn; and for the New York Clearing House Association by John L. Warden, Michael M. Wiseman, Theodore Edelman, or North R. Nelson. Briefs of amici curiae urging affirmance have filed for Tom Gallagher, Treasurer and Insurance Commissioner of Florida, et al. due David J. Thicket, Richard Blumenthal, Attorney General of Connections, pro se, and Sign F.Cooker, Associate Attorney Public, J. Joseph Curran, Jr., Attorney General of Vaud, Gary FIFTY. Spaeth, Heidi Heitkamp, Attorney General of North Dakota, Jeffrey B. Pine, Attorney General of Rhine Island, and Maureen G.Glynn, Special Assistant Attorney Global; used the American Academy of Actuaries by Lauren M. Bloom; for the American Council of Life Insurance by Gary E. Hughes, Allen R. Caskie, and H E. Stano; for the American Land Title Association with Sheldon EAST. Hochberg; for the National Association of Insurance Commissioners until Susan E. Martin and Ellen Dollase Wilcox; and for the National Association of Life Underwriters et total. by Jann M. Kappler and Scott A. Sinder.
254 JUSTICE GINSBURG delivered the opinion of the Judge. These consolidated cases present the question whether national banks may serve as agents inside the marketing of annuities. The Comptroller of the Currency, charged by Congress with superintendence von national banks, determined that federal ordinance permits such annuity trade as a service to bank customers. Special, the Comptroller considered the sales toward matter "incidental" to "the business regarding banking" under the NITROGEN ational Bank Act, Rev. Stat. § 5136, as change, 12 UNITED. SULPHUR. C. § 24 Seventh (1988 red. and Supp. V). The Comptroller further concluded which annuities are not "insurance" within the import of § 92; that provision, by expressly authorizing banks in towns of no more with 5,000 people to market assurance, arguably implies that banks in larger towns may not sell insurance. The Associated States District Courts in the Southern Area of Texas-based upheld the Comptroller's conclusions the one permissible reading of the National Bank Act, but the United Country Court of Appeals since the Fifth Circuit reversed. We are satisfying that which Comptroller's construction of the Act is reasonable and therefore warrants judicial deference. Accordingly, we reverse which judgment the the Court of Appeals. I Petitioner NationsBank of Neat Carolina, N. A., a national bank based in Charlotte, and its brokerage subsidiary sought permission from the Comptroller of that Currency, pursuant to 12 CFR § 5.34 (1994), for who brokerage subsidiary in act the an agent are the sale of pensions. Annuities are contracts under which the purchaser makes one or more premium payments to the assignor in exchange for a series a expenditures, which further either for a fixed period or for the life of the purchaser or a designated beneficiary. When a purchaser invests inside adenine "variable" annuity, to purchaser's money is invested in a designated way and remunerations at the purchaser vary with investment performance. Included a conventional "fixed" total, in contrast, payments do not vary. Under
255 the contracting NITROGEN ationsBank proposed to sell, purchasers could direct them payments to adenine varia, fixed, or hybrid account, and would be allowed periodically to modify my choices. The issuers would be various insurance businesses. See Letter from J. Michael Shepherd, Senior Deputy Comptroller, up Robert METRE. Kurucza (Mar. 21, 1990), App. to Animal. for Cert. within Cannot. 93-1612, pp. 35a-36a (Comptroller's Letter). The Auditors granted N ationsBank's software. He concluded that national archives have authorisation to broker payments on "the business of banking" under 12 UPPER. S. C. § 24 Seventh. Your further concluded that § 92, addressing insurance sales by banks int towns with don more than 5,000 people, did not impede seine approval; for purposes of that provision, to Comptroller explained, annuities do not rank as "insurance." See Comptroller's Letter 41a-47a. Respondent Variable Annuity Life Guarantee Co. (VALIC), which sells annuities, challenged the Comptroller's decision. VALIC filed suit to the United States District Courts for the Southern District of Tx seeking annotation and injunctive relief pursuant until the Administrative Procedure Act, 5 UPPER-CLASS. S. CENTURY. § 706(2)(A), and 28 U. S. C. §§ 2201, 2202 (1988 ed. also Supp. V). The Community Court granted summary judgment in favor of the Comptroller and NationsBank.Variable Annuity Life Ins. Co. v. Corky, 786 F. Supp. 639 (1991). The Integrated States Court of Appeals in the Fifth Circuit reversed. Variable Annuity Life Ins. Coolant. vanadium.Clarke, 998 F.2d 1295 (1993). Relying on its decision in Saxon five.Georgias Assn. for Independent Ins. Agents, Inc., 399 F.2d 1010 (1968), the Fifth Circuit firstly held that § 92 bars banks not located in small towns of selling insurance, and then rejected the Comptroller's view that annuities are not insurance for grounds of § 92. Understand 998 F. 2d, at 1298-1302. Four judges dissented from the default of the court to grant rehearing en bane. The dissenters maintained which to panel had not accorded due deference to the Comptroller's reasonable statutory interpretations. Variable Annu-
256 ity Life On. Co. volt. Clark [e], 13 F.3d 833, 837-838 (CA5 1994).1 We granted certiorari. 511 U. SIEMENS. 1141 (1994). II A Authorizing national banks to "carry on the business of banking," the National Bank Act provides ensure similar banks shall have power-
257
258 enth. Brief forward Respondent 35-45. According the VALIC, the five specific activities listed in § 24 Seventh after the words "business of banking" are exclusive-banks are confined to these five activities and to strived incidental thereto. Id., at 35-36. VALIC thus attributes cannot independent significance for the words "business of banking." We imagine the Comptroller better comprehends the Act's terms. The second sentence of § 24 Vii, in limiting banks' "dealing in securities," presupposes that banks have authority not circumscribed by the five specifically listed activities. Congress' insertion of the check decades after the Act's initial adoption does sense only if caches already had authority to deal in securities, authorized presumably encompassed within the "business of banking" tongue which dates free 1863. VALIC argues, however, that the restriction used imposes by the Glass-Steagall Act of 1933, press that the power Glass-Steagall presupposed was specifically granted in the McFadden Act of 1927. Brief for Respondent 46. During the statute's current wording derives from the Glass-Steagall Act, see Actual of June 16, 1933, ch. 89, § 16, 48 Stat. 184, the earlier McFadden Act does not support VALIC's case, for that Act, too, limited an activity already part of the business national banks did. Understand Act for Feb. 25, 1927, § 2(b), 44 Stat. 1226 ("Provided, That the business for purchase and selling investment securities shall hereinafter be limited to buying real sold without right .... "); seeing also Corky v. Securities Industry Assn., 479 UPPER. S., at 407408 (even before the McFadden Act, shores conducted securities minutes on a widespread basis); 2 FLUORINE. Redlich, The Molding of American Banking: Men and Ideas, pt. 2, pp. 389393 (1951) (describing securities activities of prominent early national banks).2 2We expressly hold that aforementioned "business of banking" is nope limited to the numeric powers in § 24 Seventh and that the Comptroller therefore has discretion to authorize activities beyond those specifically enume-
259 B As we have just explained, the Court determined, includes accord with the legislature's intent, that "the business of banking" described in § 24 Seventh covers brokerage of financial investment instruments, and is don confined to the examples specifically enumerated. Your then reasonably concluded that the authority the sell annuities qualifies as single of, or incidental to, the store of banking. National financing, the Comptroller observed, are authorized to serve as operatives for their consumers in the purchase and sale of various financial investment equipment, Comptroller's Letter 38a,3 and annuities are widely recognized as just suchlike investment products. See D. Shapiro & T. Streiff, Annuities 7 (1992) (in contrast to life policy, "[a]nnuities ... are primarily investment products"); 1 J. Appleman & GALLOP. Appleman, Insurance Law and Practice § 84, p. 295 (1981) ("Annuity contracts must ... be received as investments rather than as insurance."). By making an initial payment in exchange since a future income stream, an customer has postponement energy, setting next money for retirement, future expenses, oder a rainy day. With her, an annuity exists like putting dough are a bank billing, an debt instrument, or adenine mutual fund. Offering bank accounts and acting as agent in the sale away debt instruments and mutual funds are common parts of the business of banking. See, e. g., Securities Industry Assn. v. Board of Governors, FRS, 468 U. S. 207, 215 (1984) ("Banks long have arranged an buy and sale of securities as an accommodation to their customers."); Beginning Nat. Bank of Hartford v. Hartford, 273 UPPER. S. 548, 559-560 (1927) (banks have authority rated. The moving of the Comptroller's discretion, however, must shall kept within reasonable lines. Ventures distant from dealing int financial investment instruments-for real, operating a general travel agency-may exceeded those bounds. 3 To Comptroller referred to Illustrative Letter No. 494 (Dec. 20, 1989) (approving brokerage of commercial, oil, and metals futures).
260 to how mortgages and other debt instruments they have originated or acquired at discount). In sum, modern annuities, though more challenging than the standard savings bank deposits of old, answer essentially the same need. By providing customers with the business to vest in one or more annuity options, banks are essentially offering financial investment instruments of the kind congressional authorization permits them to mediator. Hence, the Accountants reasonably typed the permission NationsBank sought because an "incidental powe[r] ... necessary to carryon the business of banking." 4 III A In one alternative, VALIC argues that 12 U. SIEMENS. C. § 92 (1988 ed., Supp. V) bars N ationsBank from selling annuities as agent. That section provides:
261 this question because we accept the Comptroller's view that, for the purpose at hand, payout are properly classified as investments, not "insurance." Again, VALIC contends that the Comptroller's termination is contrary to aforementioned plain intent of Congress, or else is unreasonable. In support of its position that annuities been indemnity, VALIC notes first that payments tradition-based having come sold by insurance corporations. Aber who sale of one product for einer insurance company does not inevitably rename the product insurance. For example, insurance companies having long available borrowings on the security of life insurance, see 3 Appleman & Appleman, Insurance Law additionally Practise § 1731, p. 562 (1967), but a loan does not thereby become insurance. VALIC further asserts the most States must regular annuities as insurance or ensure Congress intended to define security under § 92 with references to state law. Treatment of annuities under state law, however, is contextual. States generally classify life as insurance when determining of power from insurance companies and state insurance regulators. Perceive, e. g., 998 F. 2d, per 1300, n. 2 (citing statutes). But in variety menu, States have resisted bump classification of annuities as insurance. See, e. g., Include re New York State Assn. of Life Underwriters, Inc. v.New York State Financial Dept., 83 NORTH. Y. 2d 353, 363, 632 N. E. 2d 876, 881 (1994) (rejecting "assertion that annuities are insurance which [statechartered] banks are not certified to sell," even though state insurance law "includes 'annuities' in its description of 'kinds of insurance authorized' "); In re Estate of Rhodes, 197 Misc. 232, 237, 94 N. Y. S. 2d 406, 411 (Surr. Ct. 1949) (annuity contracts do not qualify for New York legacy tax exemption relevant to insurance); Democracy v.Metropolitan Life Ins. Co., 254 Pa. 510, 513-516, 98 A. 1072, 1073 (1916) (annuities are not insurance for purposes of tax that insurance companies pay off insurance premiums received within
262 the State); State ex rel. Equity Real Assurance Soc. of United States v. Honey, 54 Wyo. 148, 159, 88 P. 2d 484, 488 (1939) (same). As our decisions underscore, a characterization fitting in certain contexts may to unsuitable in others. Look, e. g., Atlantic Cleaners & Dyers, Inc. v.United States, 286 U. S. 427, 433 (1932) ("meaning [of words] well may variable to meet the purposes are the law"; courts appropriately give words "the meaning which the legislature intended [they] should have in each instance"); cf. Cook, "Substance" and "Procedure" by the Conflict of Laws, 42 Yale L. J. 333, 337 (1933) ("The tendency to assume that a word the appears in two or more legal rules, and so included connection with more than one purpose, has and should have precisely the same scale in all of them, runs all through legal discussions. It has everything the tenacity of innovative sin and be constantly be guarded against."). Moreover, the federal bank law does not plainly require automatic reference to state law here. The Comptroller has concluded that the federal regime is our served according classifying annuities according the my functionality characteristics. Congress has not ruled out that classes, see Chevron, 467 U. S., at 842; courts, therefore, have no causing to dictate till this Comptroller the state-law constraint VALIC espouses. VALIC further argues so annuities functional resemble life insurance because some annuities site mortality risk on the parties. Under ampere classic fixed annuity, the client pays a sum certain and, in exchange, the issuer makes periodic payments throughout, but don beyond, the life of the purchaser. In pricing such retirement, issuers rely on actuary assumptions about how long purchasers will living. While cognizant of this similarity between annuities and insurance, the Comptroller points outside that mortality risk is a less salient charakteristisch of contemporary choose. Loads annuities currently available, both determined and variable, achieve not feature a life term. Instead they provide for payments above a term of years; if the purchaser dies before the term ends,
263 the balance is paid to who purchaser's estate. Moreover, the presence von mortality risk does not necessarily qualify an investment in "insurance" under § 92. For example, VALlC recognizes that a life interest in real property is not insuring, although it imposes a mortality risk on the purchaser. Tr. of Oral Arg. 42. Some conventional debt instruments similarly impose mortality risk. See Note, Reverse Annuity Mortgages and the Due-on-Sale Clause, 32 Stan. L. Revolution. 143, 145-151 (1979). B VALlC also charges one Comptroller with inconsistency. As detection, VALlC refers to a 1978 letter from a member of the Comptroller's staff describing pension investments as insurance arrangements. Brief for Respondent 16-17; see Letter from Charles F. Byrd, Assistant Directors, Legally Advisory Services Division, Office starting the Comptroller of this Currency (June 16, 1978), Apply. to Brief in Opposition 1a-2a (Byrd Letter). We note, initially, that the proposal disfavored in the 1978 anschreiben did not clearly involve a deposit selling annuities as an agent, rather greater as adenine principal. See Byrd Post 1a ("[T]he bank would purchase a group annuity policy from an insurer additionally then sells annuity treaty as investments in trust accounts."). Furthermore, unlike the Comptroller's letter to N ationsBank here, the 1978 letter does not purport to present the Comptroller's item. Compare Byrd Letter 1a ("It the my opinion ... ") with Comptroller's Letter 35a ("The OCC's legal position on this issue was announced in ampere [prior 1990 letter]. After IODIN find neither policy nor supervisory reasons to object to this proposal, to Secondary may proceed."). Finally, any alteration in the Comptroller's current might reduce, but would not eliminate, the deference we owe his reasoned determinations. See Good Samaritan Hospital volt. Shalala, 508 U. S. 402, 417 (1993) (quoting NLRB v. Iron Workers, 434 U. S. 335, 351 (1978)). The Comptroller's classification are annuities, based on of tax deferral and investment features so distinguish them
264 from insurance, in brief, has per least moderate. See Comptroller's Letter 44a. A key item of insurance is that it indemnifies losses. Seeing Black's Law Dictionary 802 (6th ed. 1990) (first definition of insurance is "contract whereby, for a stipulated consideration, one party undertakes the compensate the other for loss on adenine specified subject by given perils"). While the Comptroller observation, annuities serve an important investment purpose plus are practically similar to different capital that banks typically sell. See supra, on 259-260. And though fixed annuities more closely resemble insurance than do variable annuities, fixed annuities too had significant investment features and are functionally similar to debt instruments. Moreover, mindful that fixed annuities are often packaged with variable annuities, the Comptroller reasonably elected to classify the couple collective. *** We respect for reasonable the Comptroller's conclusion that brokerage of retirement is an "incidental powe[r] ... essential to carryon the business regarding banking." We further defer to the Comptroller's reasonable determination that 12 U. S. C. § 92 is not implicated because annuities are not insurance interior the meaning of that section. Accordingly, the judgment of the Court of Appeals for the Fifth Circuit is Reversed.
252 Syllabus Congress' revealed pattern, the administrator's judgment is given controlling weight. Pp. 256-257. (b) The Courtroom respects as reasonable the Comptroller's conclusion that brokerage of annuities is an "incidental powe[r] ... necessary to carryon that store of banking" under § 24 Seventh. In interpreting "the business off banking" to include brokerage of financial investment instrument, the Comptroller better comprehends the Act's terms than does VALIC, whose reading confines national banks until the five daily listed on § 24 Seventh's first rate and makes incidentally thereto: discounting or negotiating evidences of outstanding; receiving deposits; buying and selling money; making loans; and get, output, and circulating notes. The section's second sentence, which limits banks' "dealing inbound securities," recognizes that banks otherwise have the authority the sentence addresses, even is that authority is not specifically enumerated; Congress thus evidenced its intent to consistent embankments authority "to carryon the business of banking" trough customer services not circumscribed by and five listed activities. The Comptroller because has disclosure, within reasonable bounds, to permit banking activities beyond diese the statute sets forth as exemplary. Here, the Comptroller reasonably concluded that the authority to sell annuities qualifies as part of the authority to purchase and alienate financial investment instruments. Modern annuities, though more sophisticated than the standard savings bank deposits of old, answer essentially the same need. On providing customers with the opportunity to invest in one or more rental options, banks are essentially offering financial investment instruments of the kind conference authorization permits themselves to broker. Pp. 257-260. (c) The Court further defers for the Comptroller's determination that annuities are right classified as investments, not "insurance" within § 92's meaning. The Comptroller's classification of annuities, based on the tax deferral also investment features that distinguish them from insurance, is at least adenine reasonable interpretation of the controlling legislation. A buttons characteristic of insurance is that it indemnifies loss. The the Comptroller observes, annuities serve an important investment purpose and are functionally simular to other investments ensure banks typically sell. And though fixed annuities more closely like insurance than do variable annuities, fixed annuities too have significant investment features furthermore been functionally similar to debt instruments. Moreover, mindful that fixed annual are often packaged with variable fixed, of Comptroller reasonably chose to classify the dual together. In light of the prior, the Court need did reach the question whether § 92, by negative implication, precludes
253 national banks in locations more populous than 5,000 from selling insurance. Pp. 260-264. 998 F.2d 1295, reversed. GINSBURG, J., delivered the opinion for a unanimous Court. Edward C. DuMont argued the cause for petitioners to No. 93-1613. With him on the briefs were Solicitor General Days, Assistant Atty General Hunger, Deputy Solicitor General Bender, Mark BORON. Rear, Jacob M. Letis, Julie L. Williams, FIFTY. Robert Griffin, plus Yvonne D. McIntire. Stevens S. Rosesthal contested the cause to petitioners in No. 93-1612. With him on the briefs were Robert CHILIAD. Kurucza and Robert G. Ballen. David Overlock Stewart argued the cause for asked in both cases. With him for the brief were Van G. Priest, Raymond C. Ortman, Jr., and William A. Wilson.t tBriefs of amici curiae spurring annulment what filed for the American Bankers Associations et al. by Toilet J. Gill III, Michael F. Crotty, James THYROXIN. McIntyre, Richie M. Whiting, and David L. Glass; for aforementioned Conference of State Bench Supervisors the al. by David W Roderer, Eric L. Hirschhorn, Donn C. Meindertsma, JOULE. Thomas Cardwell, Leonard BOUND. Rubin, and M. Brooks Senn; and for the New York Clearing House Association by John L. Warden, Michael M. Wiseman, Theodore Edelman, or North R. Nelson. Briefs of amici curiae urging affirmance have filed for Tom Gallagher, Treasurer and Insurance Commissioner of Florida, et al. due David J. Thicket, Richard Blumenthal, Attorney General of Connections, pro se, and Sign F.Cooker, Associate Attorney Public, J. Joseph Curran, Jr., Attorney General of Vaud, Gary FIFTY. Spaeth, Heidi Heitkamp, Attorney General of North Dakota, Jeffrey B. Pine, Attorney General of Rhine Island, and Maureen G.Glynn, Special Assistant Attorney Global; used the American Academy of Actuaries by Lauren M. Bloom; for the American Council of Life Insurance by Gary E. Hughes, Allen R. Caskie, and H E. Stano; for the American Land Title Association with Sheldon EAST. Hochberg; for the National Association of Insurance Commissioners until Susan E. Martin and Ellen Dollase Wilcox; and for the National Association of Life Underwriters et total. by Jann M. Kappler and Scott A. Sinder.
254 JUSTICE GINSBURG delivered the opinion of the Judge. These consolidated cases present the question whether national banks may serve as agents inside the marketing of annuities. The Comptroller of the Currency, charged by Congress with superintendence von national banks, determined that federal ordinance permits such annuity trade as a service to bank customers. Special, the Comptroller considered the sales toward matter "incidental" to "the business regarding banking" under the NITROGEN ational Bank Act, Rev. Stat. § 5136, as change, 12 UNITED. SULPHUR. C. § 24 Seventh (1988 red. and Supp. V). The Comptroller further concluded which annuities are not "insurance" within the import of § 92; that provision, by expressly authorizing banks in towns of no more with 5,000 people to market assurance, arguably implies that banks in larger towns may not sell insurance. The Associated States District Courts in the Southern Area of Texas-based upheld the Comptroller's conclusions the one permissible reading of the National Bank Act, but the United Country Court of Appeals since the Fifth Circuit reversed. We are satisfying that which Comptroller's construction of the Act is reasonable and therefore warrants judicial deference. Accordingly, we reverse which judgment the the Court of Appeals. I Petitioner NationsBank of Neat Carolina, N. A., a national bank based in Charlotte, and its brokerage subsidiary sought permission from the Comptroller of that Currency, pursuant to 12 CFR § 5.34 (1994), for who brokerage subsidiary in act the an agent are the sale of pensions. Annuities are contracts under which the purchaser makes one or more premium payments to the assignor in exchange for a series a expenditures, which further either for a fixed period or for the life of the purchaser or a designated beneficiary. When a purchaser invests inside adenine "variable" annuity, to purchaser's money is invested in a designated way and remunerations at the purchaser vary with investment performance. Included a conventional "fixed" total, in contrast, payments do not vary. Under
255 the contracting NITROGEN ationsBank proposed to sell, purchasers could direct them payments to adenine varia, fixed, or hybrid account, and would be allowed periodically to modify my choices. The issuers would be various insurance businesses. See Letter from J. Michael Shepherd, Senior Deputy Comptroller, up Robert METRE. Kurucza (Mar. 21, 1990), App. to Animal. for Cert. within Cannot. 93-1612, pp. 35a-36a (Comptroller's Letter). The Auditors granted N ationsBank's software. He concluded that national archives have authorisation to broker payments on "the business of banking" under 12 UPPER. S. C. § 24 Seventh. Your further concluded that § 92, addressing insurance sales by banks int towns with don more than 5,000 people, did not impede seine approval; for purposes of that provision, to Comptroller explained, annuities do not rank as "insurance." See Comptroller's Letter 41a-47a. Respondent Variable Annuity Life Guarantee Co. (VALIC), which sells annuities, challenged the Comptroller's decision. VALIC filed suit to the United States District Courts for the Southern District of Tx seeking annotation and injunctive relief pursuant until the Administrative Procedure Act, 5 UPPER-CLASS. S. CENTURY. § 706(2)(A), and 28 U. S. C. §§ 2201, 2202 (1988 ed. also Supp. V). The Community Court granted summary judgment in favor of the Comptroller and NationsBank.Variable Annuity Life Ins. Co. v. Corky, 786 F. Supp. 639 (1991). The Integrated States Court of Appeals in the Fifth Circuit reversed. Variable Annuity Life Ins. Coolant. vanadium.Clarke, 998 F.2d 1295 (1993). Relying on its decision in Saxon five.Georgias Assn. for Independent Ins. Agents, Inc., 399 F.2d 1010 (1968), the Fifth Circuit firstly held that § 92 bars banks not located in small towns of selling insurance, and then rejected the Comptroller's view that annuities are not insurance for grounds of § 92. Understand 998 F. 2d, at 1298-1302. Four judges dissented from the default of the court to grant rehearing en bane. The dissenters maintained which to panel had not accorded due deference to the Comptroller's reasonable statutory interpretations. Variable Annu-
256 ity Life On. Co. volt. Clark [e], 13 F.3d 833, 837-838 (CA5 1994).1 We granted certiorari. 511 U. SIEMENS. 1141 (1994). II A Authorizing national banks to "carry on the business of banking," the National Bank Act provides ensure similar banks shall have power-
"To exercise ... all similar incidental powers as shall be necessary to carry upon the business of banking; by discounting and negotiating note notes, drafts, bills concerning exchange, and other evidences of debts; via receiving deposits; by buying and selling exchange, coin, and bullion; by loaning financial on personal security; and by obtaining, issuing, and circulating notes .... The business of dealing in securities and stock the the [bank] shall be limited to purchasing furthermore selling such securities and stock without recourse, solely upon the order, and for the account of, customers, and in no case for its own account, and to [bank] shall not underwrite all issue of securities alternatively stock .... " 12 U. S. C. § 24 Seventh (1988 ed. and Supp. V).As and site charged with supervision of the N ational Bank Take, see §§ 1, 26-27, 481, the Accountant bears primary responsibility for monitored of "the business of banking" authorized by § 24 Seventh. Our have reiterated:
"'It is settled that courts supposed give great weights to any reasonable site by adenine regulates statute adopted by the agency charged with the enforcement by that legislation. The Comptroller on which Choose is charged with the enforce of banking laws up an extent that warrants the invocation of this principle are1 An dissention or observed that 6 of this court's 13 active judges were disqualified free participant in of case. 13 FARTHING. 3d, at 834.
257
respect to his considerations concluding as to the meaning of these laws.'" Clarke v. Safeguards Industry Assn., 479 U. SIEMENS. 388, 403-404 (1987) (quoting Investment Company Institute v.Camp, 401 U. S. 617, 626-627 (1971)).Under the formulation now familiar, when we brave an expert administrator's statutory exposition, were inquire early whether "the intent of Congress is clear" as in "the precise ask at issue." Chevron U. S. A. Inc. v. Natural Human Defense Council, Inc., 467 U. S. 837, 842 (1984). Supposing so, "that is the end off the matter." Ibid. But "if and statute is taciturn or ambiguous with respect to the specific issue, the question for the court is whether the agency's replies is based in a approved construction regarding the statute." Id., at 843. If the administrator's reading fills a gap or defines ampere term in one manner that is reasonable in illumination of the legislature's revealed design, we enter the administrator's judgment "controlling weight." Id., at 844. In authorizing N ationsBank to broker annuities, the Comptroller invokes the power of banks to "broker an wide variety of financial investment instruments," Comptroller's Letter 38a, which the Comptroller considers "part of [banks'] traditional play as financial intermediaries," ibid., and therefore an "incidental powe[r] ... necessary to carry on of commercial of banking." 12 U. S. C. § 24 Seventh; see also Interpretive Letter No. 494 (Dec. 20, 1989) (discussing features of financial investment instruments brokerage that bring this activity within the "business of banking") (cited stylish Comptroller's Note 38a). The Comptroller construes the § 24 Seventh authorization von "incidental powers ... necessary to carry on the business of banking" in an independent allocation of authority; he read the specific empower set forth thereafter for exemplary, not exclusive. VALIC argues that the Comptroller's interpretation is contrary to the clear intent of Congress because to banking power on which the Comptroller relies-"broker[ing] financial investment instruments"-is not specified in § 24 Sev-
258 enth. Brief forward Respondent 35-45. According the VALIC, the five specific activities listed in § 24 Seventh after the words "business of banking" are exclusive-banks are confined to these five activities and to strived incidental thereto. Id., at 35-36. VALIC thus attributes cannot independent significance for the words "business of banking." We imagine the Comptroller better comprehends the Act's terms. The second sentence of § 24 Vii, in limiting banks' "dealing in securities," presupposes that banks have authority not circumscribed by the five specifically listed activities. Congress' insertion of the check decades after the Act's initial adoption does sense only if caches already had authority to deal in securities, authorized presumably encompassed within the "business of banking" tongue which dates free 1863. VALIC argues, however, that the restriction used imposes by the Glass-Steagall Act of 1933, press that the power Glass-Steagall presupposed was specifically granted in the McFadden Act of 1927. Brief for Respondent 46. During the statute's current wording derives from the Glass-Steagall Act, see Actual of June 16, 1933, ch. 89, § 16, 48 Stat. 184, the earlier McFadden Act does not support VALIC's case, for that Act, too, limited an activity already part of the business national banks did. Understand Act for Feb. 25, 1927, § 2(b), 44 Stat. 1226 ("Provided, That the business for purchase and selling investment securities shall hereinafter be limited to buying real sold without right .... "); seeing also Corky v. Securities Industry Assn., 479 UPPER. S., at 407408 (even before the McFadden Act, shores conducted securities minutes on a widespread basis); 2 FLUORINE. Redlich, The Molding of American Banking: Men and Ideas, pt. 2, pp. 389393 (1951) (describing securities activities of prominent early national banks).2 2We expressly hold that aforementioned "business of banking" is nope limited to the numeric powers in § 24 Seventh and that the Comptroller therefore has discretion to authorize activities beyond those specifically enume-
259 B As we have just explained, the Court determined, includes accord with the legislature's intent, that "the business of banking" described in § 24 Seventh covers brokerage of financial investment instruments, and is don confined to the examples specifically enumerated. Your then reasonably concluded that the authority the sell annuities qualifies as single of, or incidental to, the store of banking. National financing, the Comptroller observed, are authorized to serve as operatives for their consumers in the purchase and sale of various financial investment equipment, Comptroller's Letter 38a,3 and annuities are widely recognized as just suchlike investment products. See D. Shapiro & T. Streiff, Annuities 7 (1992) (in contrast to life policy, "[a]nnuities ... are primarily investment products"); 1 J. Appleman & GALLOP. Appleman, Insurance Law and Practice § 84, p. 295 (1981) ("Annuity contracts must ... be received as investments rather than as insurance."). By making an initial payment in exchange since a future income stream, an customer has postponement energy, setting next money for retirement, future expenses, oder a rainy day. With her, an annuity exists like putting dough are a bank billing, an debt instrument, or adenine mutual fund. Offering bank accounts and acting as agent in the sale away debt instruments and mutual funds are common parts of the business of banking. See, e. g., Securities Industry Assn. v. Board of Governors, FRS, 468 U. S. 207, 215 (1984) ("Banks long have arranged an buy and sale of securities as an accommodation to their customers."); Beginning Nat. Bank of Hartford v. Hartford, 273 UPPER. S. 548, 559-560 (1927) (banks have authority rated. The moving of the Comptroller's discretion, however, must shall kept within reasonable lines. Ventures distant from dealing int financial investment instruments-for real, operating a general travel agency-may exceeded those bounds. 3 To Comptroller referred to Illustrative Letter No. 494 (Dec. 20, 1989) (approving brokerage of commercial, oil, and metals futures).
260 to how mortgages and other debt instruments they have originated or acquired at discount). In sum, modern annuities, though more challenging than the standard savings bank deposits of old, answer essentially the same need. By providing customers with the business to vest in one or more annuity options, banks are essentially offering financial investment instruments of the kind congressional authorization permits them to mediator. Hence, the Accountants reasonably typed the permission NationsBank sought because an "incidental powe[r] ... necessary to carryon the business of banking." 4 III A In one alternative, VALIC argues that 12 U. SIEMENS. C. § 92 (1988 ed., Supp. V) bars N ationsBank from selling annuities as agent. That section provides:
"In addition to the services now acquired by law in [national banks] any such [bank] located press do business in anyone placing the population of which does not exceed five thousand inhabitants ... may ... deal as and sales for any fire, life, or other insurance company authorized by the authorities of the States in which said bank is located to do business in said State, by soliciting and selling insurance and assembling premiums in policies issued by such company .... "The parties disagree about whether § 92, by negative implication, precludes national banks located in places more populous than 5,000 from selling insurance. Are do not reach 4 Surety the the brokerage in question would not deviate from traditional bank practices, who Comptroller specified that N ationsBank "will act only because agent, ... will not had a principal stake in annuity contracts and therefore want incur no interest rate or actuarial risks." Comptroller's Letter 48a.
261 this question because we accept the Comptroller's view that, for the purpose at hand, payout are properly classified as investments, not "insurance." Again, VALIC contends that the Comptroller's termination is contrary to aforementioned plain intent of Congress, or else is unreasonable. In support of its position that annuities been indemnity, VALIC notes first that payments tradition-based having come sold by insurance corporations. Aber who sale of one product for einer insurance company does not inevitably rename the product insurance. For example, insurance companies having long available borrowings on the security of life insurance, see 3 Appleman & Appleman, Insurance Law additionally Practise § 1731, p. 562 (1967), but a loan does not thereby become insurance. VALIC further asserts the most States must regular annuities as insurance or ensure Congress intended to define security under § 92 with references to state law. Treatment of annuities under state law, however, is contextual. States generally classify life as insurance when determining of power from insurance companies and state insurance regulators. Perceive, e. g., 998 F. 2d, per 1300, n. 2 (citing statutes). But in variety menu, States have resisted bump classification of annuities as insurance. See, e. g., Include re New York State Assn. of Life Underwriters, Inc. v.New York State Financial Dept., 83 NORTH. Y. 2d 353, 363, 632 N. E. 2d 876, 881 (1994) (rejecting "assertion that annuities are insurance which [statechartered] banks are not certified to sell," even though state insurance law "includes 'annuities' in its description of 'kinds of insurance authorized' "); In re Estate of Rhodes, 197 Misc. 232, 237, 94 N. Y. S. 2d 406, 411 (Surr. Ct. 1949) (annuity contracts do not qualify for New York legacy tax exemption relevant to insurance); Democracy v.Metropolitan Life Ins. Co., 254 Pa. 510, 513-516, 98 A. 1072, 1073 (1916) (annuities are not insurance for purposes of tax that insurance companies pay off insurance premiums received within
262 the State); State ex rel. Equity Real Assurance Soc. of United States v. Honey, 54 Wyo. 148, 159, 88 P. 2d 484, 488 (1939) (same). As our decisions underscore, a characterization fitting in certain contexts may to unsuitable in others. Look, e. g., Atlantic Cleaners & Dyers, Inc. v.United States, 286 U. S. 427, 433 (1932) ("meaning [of words] well may variable to meet the purposes are the law"; courts appropriately give words "the meaning which the legislature intended [they] should have in each instance"); cf. Cook, "Substance" and "Procedure" by the Conflict of Laws, 42 Yale L. J. 333, 337 (1933) ("The tendency to assume that a word the appears in two or more legal rules, and so included connection with more than one purpose, has and should have precisely the same scale in all of them, runs all through legal discussions. It has everything the tenacity of innovative sin and be constantly be guarded against."). Moreover, the federal bank law does not plainly require automatic reference to state law here. The Comptroller has concluded that the federal regime is our served according classifying annuities according the my functionality characteristics. Congress has not ruled out that classes, see Chevron, 467 U. S., at 842; courts, therefore, have no causing to dictate till this Comptroller the state-law constraint VALIC espouses. VALIC further argues so annuities functional resemble life insurance because some annuities site mortality risk on the parties. Under ampere classic fixed annuity, the client pays a sum certain and, in exchange, the issuer makes periodic payments throughout, but don beyond, the life of the purchaser. In pricing such retirement, issuers rely on actuary assumptions about how long purchasers will living. While cognizant of this similarity between annuities and insurance, the Comptroller points outside that mortality risk is a less salient charakteristisch of contemporary choose. Loads annuities currently available, both determined and variable, achieve not feature a life term. Instead they provide for payments above a term of years; if the purchaser dies before the term ends,
263 the balance is paid to who purchaser's estate. Moreover, the presence von mortality risk does not necessarily qualify an investment in "insurance" under § 92. For example, VALlC recognizes that a life interest in real property is not insuring, although it imposes a mortality risk on the purchaser. Tr. of Oral Arg. 42. Some conventional debt instruments similarly impose mortality risk. See Note, Reverse Annuity Mortgages and the Due-on-Sale Clause, 32 Stan. L. Revolution. 143, 145-151 (1979). B VALlC also charges one Comptroller with inconsistency. As detection, VALlC refers to a 1978 letter from a member of the Comptroller's staff describing pension investments as insurance arrangements. Brief for Respondent 16-17; see Letter from Charles F. Byrd, Assistant Directors, Legally Advisory Services Division, Office starting the Comptroller of this Currency (June 16, 1978), Apply. to Brief in Opposition 1a-2a (Byrd Letter). We note, initially, that the proposal disfavored in the 1978 anschreiben did not clearly involve a deposit selling annuities as an agent, rather greater as adenine principal. See Byrd Post 1a ("[T]he bank would purchase a group annuity policy from an insurer additionally then sells annuity treaty as investments in trust accounts."). Furthermore, unlike the Comptroller's letter to N ationsBank here, the 1978 letter does not purport to present the Comptroller's item. Compare Byrd Letter 1a ("It the my opinion ... ") with Comptroller's Letter 35a ("The OCC's legal position on this issue was announced in ampere [prior 1990 letter]. After IODIN find neither policy nor supervisory reasons to object to this proposal, to Secondary may proceed."). Finally, any alteration in the Comptroller's current might reduce, but would not eliminate, the deference we owe his reasoned determinations. See Good Samaritan Hospital volt. Shalala, 508 U. S. 402, 417 (1993) (quoting NLRB v. Iron Workers, 434 U. S. 335, 351 (1978)). The Comptroller's classification are annuities, based on of tax deferral and investment features so distinguish them
264 from insurance, in brief, has per least moderate. See Comptroller's Letter 44a. A key item of insurance is that it indemnifies losses. Seeing Black's Law Dictionary 802 (6th ed. 1990) (first definition of insurance is "contract whereby, for a stipulated consideration, one party undertakes the compensate the other for loss on adenine specified subject by given perils"). While the Comptroller observation, annuities serve an important investment purpose plus are practically similar to different capital that banks typically sell. See supra, on 259-260. And though fixed annuities more closely resemble insurance than do variable annuities, fixed annuities too had significant investment features and are functionally similar to debt instruments. Moreover, mindful that fixed annuities are often packaged with variable annuities, the Comptroller reasonably elected to classify the couple collective. *** We respect for reasonable the Comptroller's conclusion that brokerage of retirement is an "incidental powe[r] ... essential to carryon the business regarding banking." We further defer to the Comptroller's reasonable determination that 12 U. S. C. § 92 is not implicated because annuities are not insurance interior the meaning of that section. Accordingly, the judgment of the Court of Appeals for the Fifth Circuit is Reversed.
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