Subject: File No. S7-14-08
From: Thomas A Vlachos

July 14, 2008

I think your ruling on indexed annuities is wrong. These are not securities. These are guaranteed products issued by Insurance Companies that give: (1) guaranteed minumium interest rate.(2)the potential to earn an additional interest rate,(3) probate exclusion,(4) a named beneficiary or beneficiers,(5)NO direct investment in any stocks, bonds or indexes,(6)Lifetime income if chosen,(7)Not subject to market or investment negatives,(8)TAX deffered accumulation,(9)Long term care,disability,free-out options,(10)surrender periods from as little as one year to as many 16 years depending on savings criteria, (11) accsses to surrender free withdrawal annualy some as high as 20%,(12)Many plans offer immediate vested bonuses,(13)Can be annuitized between the first and fifth years with access to the values with no charges or fees,(14)Income that is tax favorable at annuitization or the new lifetime income options,(15) the ability to adjust to inflation. Show me any security, stock, bonds,mutual funds or variable annuities that offer these guarantees with little or NO charges for optional riders.
I do believe that there are certain individuals who do not sell these products properly but even Registered Representatives,RIA's,Broker-Dealers and Bank personnell are equally as guilty to poor sales skills when it comes to proposing their products to the public. If anything there should be an Insurance Industry Mandated standard disclosure and understanding form at the time of Sale, Delivery, and by the Company at time of processing via phone contact. This should also hold true and be mandated by the Securities Industry for the products you oversee such as Mutual Fumds, Stocks,Bonds, VA's and more importantly on CD's and Money Market Accounts because the average investor and some seasoned investors who have these types of investments do not have a clue as to how they work and the high risk associated with these investments and most bank employees who sell these products do not go into full disclosure. They let the investor assume a 6 month CD at an APR of 5% will yield that over a six month period. They also say Money Market accounts bear NO risk and are completly safe. Clean up securities sales practicies which is what you do and let the Insurance Industry police these annuity products and sales practicies which is what they do. Don't penalize the consumer, the Insurance Companies and the many ethical agents in the field who are doing thier job properly. Seniors in retirement should not and will not have to worry about losing thier retirement savings when these insurance products are fully and properly presented, there is nothing wrong with Fixed Insexed Annuities, it is in the presentation of these that the flaw and blame lies. If you proceed to pass these into securities you will be doing harm and injustice to the senior and pre senior population and exposing their hard earned savings to market risks and losses. Don't proceed with this hastily put together proposal.