October 14, 2008
Changing the status of annuities to securities does not make sense on any level.
At the moment stock brokers have to be knowledgeable about a multitude of stocks and mutual funds to serve there client. Based on recent events it is evident that this knowledge base is shaky at best as many of there clients have absorbed huge losses. Adding another complicated product line that will require additional initial and continuing education demands to their already too full plate simply is not in the best interest of the public. To expect stock brokers to be KNOWLEDGEABLE about annuities in addition to all their other product offerings is folly.
You will be removing a source of income from a group of professionals (insurance agents) that have serve their clients interest for 100's of years with products that produce safe accumulation and protection of wealth for no valid reason. Many insurance agents (myself included) have no interest in becoming licensed to sell securities because they do not want to offer products that can ERODE wealth as easily as produce it. Adding another layer of regulation will only make this critical product less available exactly at the time it is most needed by the public. I assure you that you will NOT be protecting the public by making annuities a security product.
I know the financial strength, integrity, and ethics of the companies that I represent because I am involved solely in the insurance industry. A stock broker simply will not have the time to do the due diligence necessary to serve their clients because they have too many other products that require their attention.
Annuities ARE truly insurance products, not securities.
Don't let the actions of a few bad and greedy individuals reduce and hinder the public's access to this product especially at this critical time in our economy. You are never going to regulate greed as evidenced by the recent turn of economic events, but you can permit insurance professionals to continue to serve their clients best interest by not adding another layer of questionable regulation.
If regulation truly made securities safer for the public, how come millions of Americans suffered such devastating losses in the last year? Classifying annuities as securities puts these products in the hands of many individuals that didn't do the job of informing or advising their clients to reallocate their equity assets prior to the stock marketing tanking. It's the equivalent of rewarding incompetence with a bonus. Oh I forgot we already do that with our CEO's and upper management so why not expand the incompetency bonus program to stock brokers.
Thank You
Kenneth Noga