Subject:File Number S7-14-08 Indexed Annuities.

September 3, 2008

Dear Analyst;

I've been in the life insurance business since 1972. When I entered the business, unlike most of my cohorts, I passed my securities license tests in 1973, by 1974 virtually everyone I had sold a security to had lost money. I decided that this was not the way to lead a happy life and decided to only work with the money that my clients couldn't afford to lose.

Your proposed rule would do a great disservice to those who consider themselves savers and not investors. Savers have a great desire to have the return of thier money and the return on thier money is nice but not near as important. Eliminating people like me from the sale of this type of insurance product will mean these same savers will have to work with registered representatives or RIA's who tend to think the return on the money is most important. We all know that risk is related to return, and requiring a product with a low rate of return to be sold by salespeople that are trained to provide a high rate of return will kill a good product.

Kelton Research did a report for the National Association of Variable Annuities in Sept of 06 that determined:

32% of those surveyed baby boomers would not be comfortable investing anything at all in the stock market.

50% of those surveyed age 60 and older or retired said they would not invest any of thier assets in the stock market.

These are folks that don't want to talk to a "stock broker" about thier savings. They usually have done this in the past and "won't make that mistake again". Whether this is smart or not is not the question. The question is: Who will help these people with thier savings?

This rule appears to be a grab for revenue by FINRA. It seems more so by the timing of the 05-50 rule that FINRA is all of a sudden concerned about annuities only after thier revenues have been decreasing while the indexed annuity sales have been growing. The arguments for classifying annuities as securities are not valid:

1. There is no "investment risk" to the buyer if the contract is held for the term. The only question is how much interest is credited, nothing can be lost. Opportunity cost is not risk to a saver!

2. The interest is guaranteed for a year, not the dollar or percentage amount, but the formula is guaranteed. Many savings vehicles don't guarante interest for a full year, should a 3 month CD be a security because of this lack of guarantee?

3. Adding another layer of regulation will not make the crooks go away. The states all regulate annuities and are as good or better than FINRA at eliminating the dishonest, (although every regulator could do better at this). Giving the purchaser additional paperwork disclosures means there is less likelyhood of it being read. All carriers that I am familiar with do require a disclosure to be signed, and most do a suitability review. The NAIC model draft will have all companies doing this soon.

4. These contracts all have a minimum of a 10 day free look, when the contract can be returned and all the money refunded. I don't know of any security that will do this!!

5. These are not complicated products, sometimes the formula for determining interest requires a little study, but, a premium is paid, interest is credited, and money can come out in a variety of ways.

6. Commissions are not excessive. Over the term of the contract the selling agent will usually get less compensation than would be provided by a 1% asset fee on a managed account.

Having the indexed annuity called a security is like having the FAA decide to regulate the shipping business. The Coast Guard already does a good job, and has the experience to to do it right.

Thank you for your consideration.

Carl Berdie, CLU, FLMI