October 13, 2008
This is a grab by the securities industry to take a profitable product from the Insurance Industry. State regulators have been more than adequate workiing with the Carriers to better protect the public with full disclosure and better sales practices. Adequate disclosure is part of the Insurance sales and compliance process and it has been evolving with even better consumer protection and disclosure which is modeled after the securities industry.
The securities industry is no stranger for violating the public trust - all regulated industries have continuing issues, no matter how diligent their regulators may be.
Since the products are guaranteed by an insurance carrier with no downside risk, they are definitely not either an investment or a security. An investment MUST have risk. Fixed Annuities have no market risk..in this case they are like a CD.
Social Security has a Cost of Living provision tied to the Inflation Index, it is no more a security than an annuity is.
A mortgages interest rate is tied to the Ten Year Note, a security, yet a mortgage is not a security.
By singling out Indexed Annuities and putting them under the FINRA/NASD regulators, you increase the costs, lessen distribution, restrain competition and trade.
The motivation here certianly seems transparent to me... $$.