Subject: File # S7-14-08 In favor of!

August 28, 2008

I've been in the insurance industry for 20 years and have been witness to the introduction of many good insurance and investment products. However, the EQUITY INDEXED ANNUITY (EIA) has been beset with participation rates, caps, various crediting methods, surrender penalties and some bizzare criteria in some contracts to qualify for the contract's earnings.

EIAs are complicated products, not easily understood by even the agents who sell them. Maybe there are some good contracts out there ? The majority of sales pitches incorporate the premise, you can participate in market gains without the possibility of a loss. Treating an EIA as a regular fixed annuity should not continue. I believe that EIAs fall into the same category as derivatives, collaterized debt obligations, exchange traded funds, SPDRs, etc. Each is an exotic investment opportunity which require extensive research, eduction and training to fully comprehend and apply to a client's financial situation.

An hour or two of on line training does not provide the typical nonsecurities licensed agent sufficient understanding of EIAs. Yet, the companies marketing EIAs provide the majority of their training through furnishing colored brochures to brokers which extoll the no risk element of EIA INVESTMENTS/ANNUITIES.

The NAIC model legislation, adopted in some form by many states, does set forth some criteria for suitability of an annuity sale. However, I prefer the FINRA rules as those provide more recourse and protection for the consumer.

Being innovative and creative in creating new annuity products does not necessarily provide a product which genuinely benefit the general public. I write and teach continuing education courses for licensed agents. Agent education, by itself, will not curtail the abuses and misapplication of EIAs in the sales of annuities. The industry needs stricter guidelines and enforcement of standards with EIAs.

Bronislaus Blaszkowski, CLU, ChFC, LUTCF
Metlife Registered Representative