Subject: File No. S7-14-08
From: Thomas M Ungrady

August 29, 2008

As a tax preparer, I have had numerous clients who have purchased equity index annuities and have suffered financial tragedy. In each instance, they purchased a product from an insurance agent who, in my opinion, did not understand the product they were selling or intentionally withheld information that would have caused the buyer to not make the purchase.

Two individuals stand out. One was an elderly woman whose husband had died. An insurance agent convinced her to transfer her deceased husband's IRA into an equity indexed annuity. The seller improperly transferred the IRA funds into a non-qualified equity index annuity. The buyer did not understand anything that was taking place. When I prepared her tax return, her taxes on the IRA distribution exceeded $30,000. She did not have available funds to pay the tax. She was forced to withdraw funds from the equity index annuity that had a 20% surrender charge. The agent rejected any responsibility for his mistake and no regulatory agency was available to protect the senior citizen.

Another client purchased an Allianz equity index annuity from an insurance agent. She was told that she could withdraw 10% of her account balance, free of surrender charges each year. When she attempted to withdraw funds, Allianz told her that her that the agent was incorrect and her withdrawls were limited. Making things worse, she could only access 50% of her deposit. The remaining 50% could only be accessed through annuitization of the contract.

I fully support SEC regulatory oversight on the sale of these products and urge the SEC to declare them to be a security - as the poorly trained agents represent them as being "in the SP 500" market. Only through sale by a broker-dealer will the purchasers be protected and have recourse in the event of misrepresentation.