September 8, 2008
On June 25, 2008, the United States Securities and Exchange Commission proposed a new Rule 151A that would, in effect, define most indexed annuities as securities. I am writing to oppose this proposed regulation.
I am an independent insurance distributor whose practice includes indexed annuities. These products are an increasingly popular retirement savings tool for consumers who want a secure place for their money in these economically uncertain times.
Indexed annuity sales are regulated by the respective state insurance commissions. They are insurance products designed as retirement savings vehicles with built in guarantees that are not offered in the stock market.
There is a fundamental difference between indexed annuities and securities. The fundamental difference is risk. With indexed annuities the risk is born by the insurance carrier and backed by capital reserves. With an investment in the stock market all of the risk is born by the investor. Calling and indexed annuity a security does not make it a security.
The SEC’s proposal for the SEC to regulate indexed annuities merely adds to governmental bureaucracy without providing consumers with additional protection. I want my clients and all consumers of insurance products to be protected from those who might do them harm. But the current proposal does not help them and may even hurt them. It also will have a negative impact upon me and upon my business.
I take pride in providing a high quality of service to my clients which is rooted in ethics and their best interest. Proposed Rule 151A will not help me do that more effectively and will not provide consumers with any better or different protection.
I strongly urge that proposed Rule 151A not be enacted. It is unnecessary, redundant and counterproductive
.Respectfully submitted,
Michael M. Mirich