September 2, 2008
Dear Mr. Cox:
Thank you for permitting a comment period regarding Proposed SEC Rule 151A. This important period permits me to tell you something about our Organization and to expound on the merits of the Proposal.
I am Ronald J. Lane, President of Fairlane Financial Corporation. Fairlane Financial is a family owned, 53-year old National Marketing Company. We specialize in recruiting, training and managing licensed insurance professionals across the United States. During the last several years, Index Annuities have become the vogue products our representatives have elected to offer their clients.
Index Annuities can be somewhat cumbersome to explain to consumers, due to the various nuances that differ by carrier. In fact, some of the annuity’s attributes (like caps & spreads) change with market conditions. The insurance industry has continued to train (both agents & clients) how “indexing” works in these products. Once clients are shown the basic concepts of index annuities and the upside growth potential - without the downside risks, they become conscientious consumers.
Of course, we know there are good and bad actors, doctors, lawyers, politicians and insurance agents. We pride ourselves in developing relationships with the quality insurance agents across the land who are trustworthy and professional. There is a concentrated effort today to eradicate dishonest agents from our community. We are a very proud industry that insures the policy owners’ assets and their lives.
This brings me to the Proposed Rule 151A. The SEC must have taken a tremendous amount of time researching the merits of changing the classification of index annuities from insurance products to securities. I would respectfully request that the SEC give the insurance industry a similar amount of time and consider extending the “Comment Period” another 90 days. This additional time would permit us to respond to the Proposal more articulately and allow us to submit data from the thousands of satisfied customers who have purchased index annuities over the years.
In closing, may I offer some constructive criticism to the Proposed SEC Rule 151A? As a 32-year insurance professional, I would like to draw an analogy to the SEC re-classifying index annuities. Before a pilot is permitted to fly certain aircraft, they must be trained on the aspects of that model type. The FAA does not require all pilots to receive training for all aircraft, only the aircraft these pilots will actually be flying.
The same should hold true for the annuity industry. Perhaps there should be specific training for insurance agents wanting to sell index annuities. The respective index annuity carriers would administer the training / testing procedures. If an insurance agent did not possess a certain type license, they would not be allowed to sell the index annuity. The additional license would verify that the insurance professional has studied the attributes of index annuities and successfully passed a test to prove they were qualified to sell that type product. I would ask that the SEC consider this avenue before they sanction all index annuities as securities. Thank you for your consideration.
Sincerely,
Ronald J. Lane