September 9, 2008
Fixed Annuities are designed by insurance companies and for consumers who are looking for an alternative to securities products. These are not
market products even though they are tied to market performance. The design and the sale of these products are already highly regulated by state insurance departments and the companies who sell them. Suitability is and continues to be highly scrutinized under the current regulators. There is no need to add additional layers to these products.
Fixed annuities are guaranteed products. They are guaranteed by the insurance companies which manufacture and sell the products and therefore should be regulated - as they currently are - by insurance regulators - not by the SEC.
Changing regulation on these products will result in a cost adjustment to the consumer. These consumers are people who are risk averse and who do not want to take chances in the markets. Please do not punish the consumer with fees that will surely be passed along to them, when these are precisely the consumers who choose to avoid fees that are associated with other market products.