September 2, 2008
I am a life, fixed annuity, health, and property and casualty agent in Illinois. For the last few years, a good portion of my income has come from the sale of fixed annuities, and in particular, from equity indexed annuities. If these types of products were subject to securities regulation, it would adversely affect my business.
Also, I do not believe excess regulation is necessary. These products are not like stocks and mutual funds. There is no risk to principal (unless prematurely surrendered - which is clearly disclosed). And they are already heavily regulated by state insurance departments. There are mandatory licensing, advertising, and suitability regulations and requirements in place, with enforcement actions and penalties for noncompliance. And most, if not all of the carriers, require product disclosures that prominently display all relevant product features, including surrender charges, which must be signed by the client. And most of the carries, if not all, have additional suitability reviews of all sales. Securities regulation will not add any meaningful consumer protections and could possibly hurt the consumer by reducing availability.
The customers I have sold these products to are very happy with them - they have outperfomed both there stock and mutual fund holdings over the last few years, and their other fixed income investments like CDs and money market accounts. They also are helping my clients by reducing their currecnt tax liability and protecting their principal investments, which many of them saw disappear in their other investments the previous 5 years.
I stongly oppose the proposed rule. I ask you please not to adopt it. Please do not subject fixed annuities or indexed annuities to dual regulation by requiring them to be registered under federal securities laws.
Sincerely,
Chris Campbell