September 4, 2008
My livelihood and business as a licensed, independent insurance agent may be greatly impacted by your proposal to require that all fixed index annuities become registered products sold only through a broker-dealer and not by insurance agents. This rule adds no consumer protections not already provided by state insurance regulation and would in fact undermine many state initiatives concerning sales practices.
Both the design and sale of annuities are highly regulated by state insurance departments as are the companies who manufacture and sell them. State insurance regulations cover,among other things, suitability of insurance agent recommendations regarding annuities, annuity disclosure and advertising, agent licensing and training, unfair trade practices including misrepresentation of product terms and conditions, and enforcement actions and penalties for noncompliance with sales practice requirements. In addition, guaranteed minimum values for annuities are regulated through the Standard Nonforfeiture Law and are applicable to all fixed annuities.
Finally, fixed indexed annuities are insurance products that protect customer's retirement dollars not a market risk security.
Thank you,
Gregory P. Jourdan
Certified Senior Advisor