WASHINGTON - The Justice Department has dropped dropping its antitrust investigation into efforts by the American Council of Life Insurance to block the so-called retirement CD, the trade group said.

Banking industry advocates had said they thought that the insurance industry was behind the series of legal challenges by state regulators that have plagued the insured annuity.

The retirement CD looks very much like an annuity. With both products, consumers deposit a lump sum into a tax-deferred account that will provide income during retirement. However, unlike the insurance industry's product, the retirement CD is insured.

In January, the Justice Department confirmed that it had begun a preliminary investigation into "the possibility of anticompetitive practices in the insurance industry."

Ken Vest, a spokesman for the trade group, said it had been less vocal about the retirement CD because of the Justice Department investigation.

However, he said, "our strategy had not really changed. We still pursued public-policy options."

A spokeswoman for the Justice Department acknowledged that the investigation had been dropped. She declined to elaborate.

Meanwhile, the company that started the retirement CD - American Deposit Corp. of Pine, Colo. - said the Independent Bankers Association of Texas has given its formal support for the product.

The Texas group will oppose congressional efforts to limit the retirement CD, American Deposit said, and will argue against an Internal Revenue Service proposal to strip the product of its tax-exempt status.

"We think it's a wonderful product and one that fits in perfectly with a community bank's profile," said Christopher L. Williston, president of the Texas bank group, in an interview.

"We're going to do everything we can to help," he added.

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