federal court ruling that the controversial investment product should be regulated as if it were life insurance. Attorneys for American Deposit Corp., the inventor, had argued that the retirement CD is an investment and not life insurance. But Edward A. Bobrick, a judge in the U.S. District Court in Illinois, disagreed. He ruled that the retirement CD is an annuity, and therefore an insurance product. Annuities, underwritten by insurance companies, are gaining in popularity among bank customers. Under IRS rules, the retirement CD is considered an annuity because, like an annuity, it offers tax-deferred buildup. Certificates of deposit in general don't offer tax-deferred buildup. But Richard E. Fasold, president of American Deposit, said the Supreme Court had already ruled in December, in NationsBank v. Variable Annuity Life Insurance Co., that an annuity is a form of investment, not a form of life insurance. Why Judge Bobrick "chose to ignore that is anyone's guess," said the outspoken Mr. Fasold. The insurance industry is fighting the retirement CD because it is insured by the Federal Deposit Insurance Corp. and annuities from insurance companies are not, he said. Therefore, he said, customers will prefer the retirement CD as safer than annuities.

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