Subject: File No. S7-14-08
From: Gerald W. Nannen, CLU, ChFC

September 1, 2008

I have been in the insurance industry for over 30 years and am an active insurance professional, as well as an investment advisor representative of my 100% personally owned registered investment adviser, Senior Financial Advisors, Inc., which is registered in MA. I have sold fixed annuities since 1975. I have never believed in selling Variable Annuities, though I am able to do so. The simple reason is that I feel that other security vehicles exist that are better suited than VA's, for investors to receive equity returns, without the high fees that correspond to VA sales. I believe Fixed Index Annuities (FIA) are a totally different product than VA's and carry none of the inherent risks of the VA's and other equity vehicles. With FIA's, the principal is 100% guaranteed by the insurance carrier. All interest credits are also guaranteed as to not be subject to downside risk. The only risk in a FIA is that if the consumer elects to have 100% of their funds earn interest based on an equity strategy, the strategy may have a 0% yield in a given year. There is NO loss of principal and NO accumulated interest losses. On the other hand, I have had a few clients earn in excess of 10% interest in certain years. I love these annuities because they give the consumer the potential of higher than a typical fixed annuity return, with NO risk to principal.

I complete a thorough fact finder on the consumer's financial assets and risk tolerance and thereby determine the suitability of a certain portion of their assets to be placed in a FIA. I utilize annuities as a bond like return vehicle, with NO downside risk. There is significant liquidity via the 10% free withdrawal, and we are careful to make sure there are substantial other funds
available to draw from when needed. I actually would earn quite a bit more compensation over 10 to 15 years from managing my portfolios of mutual funds through my RIA, than from the upfront commission of an annuity sale. I feel this proposed change would significantly negatively alter the cost of the FIA's and would restrict the availability to sales through BD's. The states would no longer be involved through the insurance commissioner's office, in the regulation of complaints, and their speedy handling of complaints. This would lead to costly litigation by the consumer because the SEC would not act as an arbitor. Thanks for allowing me to comment.