September 4, 2008
The proposed rule has the potential to negatively impact not only insurance companies and agents, but consumers as well. These products are currently used by millions of Americans to help achieve their savings goals. The guarantees provided by an indexed annuity offer consumers significant protection against investment risk. The DJIA has suffered a decline this year in excess of 20% from its October 2007 record, yet a fixed indexed annuity purchaser will not lose any principal due to market performance.
The securities regulation will add little benefit to consumer protection. Many states have already adopted the NAIC Annuity Disclosure Model Regulation and most, if not all, of the major index annuity carriers have mandated the use of a disclosure statement. The proposed rule may add unnecessary and redundant disclosure procedures.
Again, I believe that this proposed rule will adversely affect millions of Americans who use annuity products to help meet their retirement goals without the risk of the stock market.