American Deposit Corp. asked the Supreme Court on Thursday to overturn a lower-court decision giving the Illinois insurance commissioner permission to ban the so-called retirement CD.
"The lower court erred in its ruling," said Richard Fasold, president of the Pine, Colo.-based company. "We want to get this straightened out."
The federal appeals court in Chicago ruled in May that the retirement CD is a fixed-rate annuity that state insurance commissioners can regulate. The ruling sent a shock through the banking industry, which thought the Supreme Court's 1995 NationsBank v. Valic decision had barred states from preventing annuities sales by banks.
Mr. Fasold said he is optimistic that the justices will accept the case. "This is the kind of issue the Supreme Court would hear," he said. "This has broader ramifications than the retirement CD. The major issue here is 'are annuities insurance?'"
American Deposit should learn Oct. 7 whether the Supreme Court will hear the dispute during its fall or spring terms.