Subject: File No. S7-14-08
From: Barry D Estell, Esquire
Affiliation: Attorney At Law

November 5, 2008

Equity index annuities are designed, advertised, promoted, sold, and ultimately purchsed as investments, not insurance.

Because they are not considered "securities" they are not subject to the full disclosure required in a prospecutus. The people selling them normally have no greater understanding of them than the purchasers but the sellers know they pay two or more times the commission rate of a mutual fund and there are no break-points for large purchases, further increasing the incentive for misrepresentation of these investments.

Almost none will ever actually pay a "market" return after all the caps and limitations hidden in the policy which most investors can not analyze. They are a great fraud on the market without any legal requirement of full disclosure of the very limited benefits which will accrue.

State insurance commissioners are capable of analyzing true insurance policies, but not investments. That is better left to the investment professionals.

This may be the last chance for the current Commission to show a spine in the face of big money opposition and it should take advantage of the opportunity. It will have one, and only one, actual accomplishment in protecting public investors instead of toadying to the special interests preying on individual investors.