Subject: File No. S7-14-08
From: Robert Pyne
Affiliation: Financial Planning Association, National Association of Insurance and Financial Advisors

September 3, 2008

Dear Sirs:

I strongly object to the passage off rule 151A for the following reasons-

Fixed indexed annuities are simply a sub-category of traditional fixed annuities, with the same or similar guaranteed minimum interest rates and non-forfeiture clauses. They are already well regulated by the Insurance Commissioners in all fifty states and by company suitability policies. The distinction between the fixed annuity and the fixed indexed annuity is simply between the way and method in which interest is credited. There is no direct market participation of the contract holders money. There is no potential loss due to market volatility or downturn. Interest is simply credited based on the performance of well known, well established, and widely reported indices rather than a traditional stated rate of return, thereby giving the potential for a higher rate of return with no risk of account value. For most retirees, these savings vehicles allow the potential to perhaps gain a higher return, without taking on additional risk. A very wise man, Will Rogers once said, Im more concerned about the return of my money, than the return on my money. And that certainly applies here. Yes, they have surrender charges just as traditional fixed annuities do and just as CDs have penalty for early withdrawals. These charges are in place for numerous legitimate reasons, and are both long-time standard industry and regulatory accepted practice. Clients are made aware of these at or before the time of purchase and choose as appropriate for their needs.

I fear that this issue has come up for other than consumer protection issues for various reasons that are biased and self serving. For example, as I understand it, the SEC panel has been shown a recent dateline TV program. Since when are professional and governmental organizations allowing into consideration so called evidence from a television show? A show that is dependent on ratings and with that can come bias and sensationalism. None of us has any idea how the show was edited. There was to my recollection, no counter points offered from any source to the accusations made. I do recall however this is the same television show and reporter, who in the early 1990s, under the guise of supposed investigative journalism, helped stage a crash test of GM pick-ups that were rigged to get a particular outcome, and concealing their fraud to the public of overfilling one truck's gas tank, using a nonstandard gas cap that popped off on impact, and strapped remote-controlled model-rocket engines to the truck's frame to guarantee a fire, after trying the good old fashioned way of just crashing directly into them didnt work. To quote Howard Rosenberg of the Los Angeles Times about that show, "an electronic Titanic"--"an unprecedented disaster in the annals of network news, and perhaps the biggest TV scam since the Quiz Scandals." Should this kind of unconfirmed TV sensationalism really be viewed as something to legitimately consider? I for one do not believe so. I do believe however, that there is a is clandestine conspiracy by an organization now called FINRA and its members, under the guise of consumer protection, a concerted effort to try and control and regulate as much as they possibly can. Particularly any product that my be a potential competitor to securities products so as they can either reduce the amount of sales of competitor products to their traditional products, and or have them placed under their auspices so as to be able to get their piece of the pie of commissions or percentages of assets under management. I quite frankly find it laudable that the very agency that levels accusations that these products are not suitable for investors/savers, particularly retirees because of surrender charges, have no problem offering securities products to this same demographic, that have no guarantees of any type whatsoever and can lose 20, 30, 40 or more percent of their accounts at any given time.

Gentleman, I believe this similar argument has been ruled in the past by several high courts, and each came to the same conclusion, that fixed indexed annuities are in fact fixed annuity insurance contracts that have been regulated, rightly and appropriately so, by state insurance laws for almost 100 years.

For all of the above reasons, and many others that I have not addressed hear, I strongly object to the passage of rule 151A.

Sincerely,

Robert D. Pyne