September 10, 2008
I oppose the proposed rule 151a. The proposal seeks to have the securities and exchange commission oversee an area that, by definition, is not a security. By the definition in the law, a security involves risk. In the case of the fixed index annuity, the insurance company assumes all risk. Further, insurance commissioners in every state regulate the insurance companies that do business in their respective states. In every case, the index annuity has gone through a complete and extensive review of each contract. In fact, of all the complaints that have been submitted against insurance policies, only 0.12% of those complaints involve any kind of annuity. Of those few, only 9.62% have involved indexed fixed annuities. That translates to a complaint percentage of .011% of all complaints or 11 out of 10,000 complaints are about index annuities.
This is a clear attempt by the organization that used to be called the NASD to generate more income by forcing insurance providers and agents to pay a fee for oversight of a savings vehicle that has no risk to the policy holders. This power grab should be opposed at every level.