concurring.
The Retirement CD that Blackfeet National Bank wants to offer in Illinois is, as the majority opinion notes, an innovative product. Therein lies the core difficulty for this case. In the face of the creativity and innovation that is taking place in financial markets, we are obliged to decide whether the act of offering this particular Retirement CD amounts to engaging in the “business of insurance,” within the meaning of the 1945 statute commonly known as the McCarran-Ferguson Act, 15 U.S.C. § 1012. The dissent makes a number of compelling policy arguments, and I have little doubt that permitting national banks to issue innovative, hybrid instruments such as the Retirement CD would be beneficial to competition as a whole. Nevertheless, our job is not to question the wisdom of the statutes Congress has passed or the rules Congress has given us for determining how those statutes relate to one another. From that perspective, it seems clear to me that the principal opinion has come to the only conclusion that is consistent with the language of the relevant statutes, governing Supreme Court precedent and the economic function of the Retirement CD.
The dissent argues extensively that annuities should not be considered insurance products, noting a number of differences between the two products like the types of risks covered, the methods of payment, and the purposes for which they are designed. It notes, correctly, that many investment vehicles and contracts that address mortality risk are plainly not part of the “business of insurance.” Where the dissent is ultimately unconvincing is in its application of the test for determining what constitutes the “business of insurance” as a matter of federal law for purposes of § 1012.
On this point, I agree that the Supreme Court’s decisions in Union Labor Life Ins. Co. v. Pireno, 458 U.S. 119, 127-129, 102 S.Ct. 3002, 3007-3009, 73 L.Ed.2d 647 (1982), and Group Life & Health Ins. v. Royal Drug Co., 440 U.S. 205, 211-17, 99 S.Ct. 1067, 1073-76, 59 L.Ed.2d 261 (1979), establish the governing criteria both for the second (antitrust) clause of § 1012 and for the first clause. Under the first criterion, it is not enough to establish that the practice deals with a certain type of risk (here, mortality risk); we must go further and consider whether the practice has the effect of transferring or spreading that risk. To take one *845example from the dissent, a grantor assumes a mortality risk when she confers a life estate in land to another party, but there is no necessary transfer or spread of that risk to a larger population. The Retirement CD, in contrast, like all annuities, spreads mortality risk among all holders of the CD. If the issuer has good actuaries, it will earn money overall on its Retirement CDs, even if some individual customers live longer than their predicted life spans. Annuities are the same as life insurance policies in this respect: in each case, the accuracy of the issuer’s predictions about the mortality of the customer population determines how profitable the issuer’s business will be. For this purpose, it does not matter whether in one case the issuer is gambling that the customer will not die too soon, or in the other case it is gambling that the customer will not die too late. In both situations, there is an ascertainable risk that is spread or transferred. In addition, for the reasons the majority offers, the annuity aspect of the Retirement CD is an integral part of the contractual relationship between the issuer and the customer. Finally, even though other entities may issue annuities, dissent at 857 n. 22, the dissent offers no evidence to refute the statistics cited by amicus American Council of Life Insurance to the effect that the overwhelming majority of the $1 trillion of annuity contracts in the U.S. are issued by regulated insurance companies. Thus, the third factor of Pire-no/Royal Drug is satisfied here as well.
The fact that Blackfeet is a national bank is important to the analysis only because it requires us to decide whether the “reverse preemption” provisions of the McCarran-Ferguson Act apply in these circumstances or not. The mere fact that national banks are permitted to sell the Retirement CD does not mean that contrary state regulation is supplanted. In Barnett Bank of Marion County v. Nelson, — U.S.-,-, 116 S.Ct. 1103, 1108, 134 L.Ed.2d 237 (1996), the Supreme Court noted that the purpose of the provision of the National Banking Act authorizing banks in towns with populations of less than 5,000 to sell insurance, 12 U.S.C. § 92, might have been to allow banks that power as long as states also gave their permission. The Court concluded that the unqualified language of the statute made that interpretation untenable. In this case, however, the Office of the Comptroller of the Currency (OCC) noted twice that state insurance laws might apply to the Retirement CD. Ante, at 837 n. 2. The OCC would certainly have taken a different tack if it believed that state laws necessarily had to yield to the powers of national banks to engage in this kind of business. I am therefore satisfied that our decision does not raise concerns under either the Supremacy Clause or the National Banking Act. The majority has simply reconciled two bodies of federal law in a manner that respects the Congressional limitations on each.
For these reasons, as well as for the reason set forth in the principal opinion, I agree that the judgment below must be affirmed.