September 2, 2008
In June 2008, the US Securities and Exchange Commission (SEC) presented proposed Rule 151A, which effectively would define all fixed index annuities as securities under the Securities Act of 1933, not insurance products. Fixed Index Annuities, as they are currently designed, are insurance products and not securities. They provide a guarantee of principle, a tax-deferred interest credit, and the burden of these two items falls on the issuing insurance company's chest. Perhaps there are some representatives who should not be selling them due to lack of product knowledge or who think of their commissions instead of their client's needs. We should not allow all agents to be thrown into that category just because some are not qualified. I suugest that a separate license, by way of testing, is the answer, not a different organization such as the SEC be the new "watchdog". I am sure that you have read the numerous stories about the SEC fining registered representatives for unscrupulous actions in the sale of registered products. Finally, the Fixed Index Annuity product has value for those in the 55-80 age bracket, a large voter population in the 13th district of PA. They are the ones who will be most affected due to the lack of the product being available for sale. Those who sell it now will be forced to turn to different products for their clients. I am one of them. Thank you for your time.