August 29, 2008
On June 25, 2008, the United States Securities and Exchange Commission proposed a new Rule 151A that would, in effect, define most indexed annuities as securities. I am writing to oppose this proposed regulation.
I am an employee of an FMO so this would impact the Industry that offers me employment. I support hundreds if not thousands of independent insurance agents across the country whose practice includes the sale of indexed annuities to their customers when they are suitable and in the customer’s best interest. These products are an increasingly popular retirement savings tool for consumers who want a secure place for their money in these economically uncertain times. I personally have converted monies from an IRA earning 1.5% interest to a 10 year annuity. These funds were from past employer 401(k)s that were losing money just sitting in the 401(k) plan. I chose not to roll them over into my current employers 401(k) plan so that I would not lose any more money.
Sales of annuities are highly regulated by our state’s insurance commission and the insurance carriers involved. The SEC proposal would impose an additional, as well as wholly redundant and unnecessary, layer of regulation to the agent’s I support. The licensing required and the necessary affiliation with a broker-dealer is costly, very time-consuming and counterproductive. As such, it will impact their businesses without benefiting consumers, and could ultimately impact my job.
Since indexed annuity sales are regulated more than adequately by the state insurance commissions, the SEC’s proposal merely adds to governmental bureaucracy without providing consumers additional protection. Suitability rules in both the insurance industry and the securities industry mirror each other. Moreover, since dispute resolutions within the securities industry take much longer, are more complex and are much more costly for the consumer than those overseen by my Department of Insurance, what is proposed will substantially hurt consumers rather than help them.
I would like my customers and all of their clients who purchase insurance products to be protected from those in this industry who might do them harm. But the current proposal does not help them and may even hurt them. It also will have a negative impact on the company I work for, my job, me and my family.
I take pride in providing a high quality of service to my customers across the country which is rooed in ethics and their best interest.
I strongly urge that proposed Rule 151A not be enacted. It is unnecessary, redundant and counterproductive.
Respectfully submitted,
Craig Stearman
Field Human Resources Consultant
Asset Marketing Systems Insurance Services, LLC