September 4, 2008
I have been a life insurance agent for nearly 30 years and a registered representative for over 25 years. I market life insurance products,fixed and variable annuity products, long term care insurance, and a host of securities products including mutual funds.Having sold both traditional insurance company policies and securities, it has always been very clear as to who was responsible for overseeing the products and the activities of the writing agent/registered rep. The various state insurance departments were responsible for the sale and marketing of life insurance products(including fixed annuities),and the broker dealers handled the securities transactions.I'm a strong believer in the notion that"if it ain't broke, don't fix it.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 practices requirements. In addition, guaranteeed minimum values for annuities are regulated through the Standard Nonforfeiture Law and are applicable to all fixed annuities.The securities regulation will add little benefit to consumer protection, but surely increase the cost of marketing indexed annuities unnecessarily. It will be the consumer that incurs these costs.Suitability reviews required of brokers under FINRA rules would not add any meaningful protections over and above what is already being done. I ask that you reconsider your position and continue to allow the state insurance departments to regulate their own industry.