September 8, 2008
Re: SEC Proposed Rule 151A
As an insurance producer who sells fixed indexed annuities, I am deeply troubled by a newly proposed rule issued by the Securities and Exchange Commission (SEC). This rule proposal, known as SEC Rule 151A, would significantly upset the regulation and marketing of fixed indexed annuities by deeming them to be securities, even though fixed indexed annuities have been in the marketplace for over a decade and are closely regulated by state insurance commissioners.
Is this a reaction to fear of loosing funds being transferred out of accumulation phase products, handled by the Wall Street Brokers? Just as Variable Annuities now are required to disclose their fees and rider costs, providing some guarantees, usually ascribed to Fixed Annuities in the past isnt it appropriate to bring insurance industry experts (and legislature) together to self-regulate and provide definitions to clarify terms and constraints, of all types of fixed indexed annuities? Competition for retirement accounts as the Boomers go into preservation and distribution phase, will create extreme confusion and lost decisions that will greatly impact retirees and their families.
Who are served most by this battlefield? Not the consumers, you can be sure.
What is especially troubling to me is the way in which this proposal seems to be being rushed to adoption. Even though indexed products have been around for over a decade, the SEC introduced its proposal with virtually no advance warning at the end of June and has allowed for comment only through September 10th. This means that in a matter of about two months, our industry could be turned upside down based on perceptions and decisions of a regulatory agency without any input from Congress and only minimal input from those most familiar with these products—insurance companies, insurance agents, and insurance regulators. This seems unfair and misguided.
Please raise these concerns—as soon as possible—with SEC Chairman Cox, the SEC Commissioners, and the House Financial Services Committee. Please do whatever you can to persuade them that a rule of this magnitude needs more study and to urge them to handle any process of evaluation in an equally representative forum. In addition, I am hoping you will take the time to learn more about this issue and help us convince the SEC that this rule proposal is unnecessary and counterproductive.
I ask for your help so that insurance financial industry can remain focused on providing the kinds of products that will help millions of Americans retire with incomes that will last as long as they may live. And the goal should be to support the process of providing Americans with alternative means of income over dependence upon Social Security.
Sincerely,
Linda Nebon
Life/Health/Fixed Annuity/LongTermCare Insurance Agent CA #0D93442
Woodland Hills, CA 91367