September 8, 2008
1. The purchaser of an FIA is not directly impacted by market fluctuations unlike true security products. Negative investment risk fluctuation to the purchaser is eliminated entirely.
2. An FIA is a fixed product and people purchase the product for many of the same reasons they would purchase savings instruments such as CDs or Fixed Annuities.
3. Suitability regulations in most states and the sale practices required by insurance companies already meet or exceed the federal requirements. Complaint resolution through a dept of ins is much more effective than provided in securities law. A consumer can work with the dept of ins at no cost and receive direct representation.
4. Purchasers of a FIA will benefit from rewards and market fluctuations DO NOT affect value or past interest credits.
5. With SEC regulating the sale of FIA, the cost of creating and administration of the product will increase dramatically and reduce the value for the FIA purchasers.
6. This change will cause a huge negative economic impact to small agencies within the insurance industry which violates the Small Business Regulatory Enforcement Fairness Act of 1996.