July 11, 2008
Dear Sirs:
I have been in the insurance profession since 1979. I obtained my Securities License in 1983. Many of my sales have been primarily in the fixed annuity arena. I believe that there is a wide gulf that is appropriate for the fixed indexed annuity: Conservative, yet wish to have the opportunity to earn a long-term average rate higher than the traditional fixed annuities offer, and Risk-Averse, who have had less than a positive experience with the overall Securities Market. Statistics show that an investment need only to earn 30% of the "Stock Market" gains, without participating in the losses, in order to equal overall "Stock Market" returns. That's exactly what the fixed indexed annuities offer. The removal of loss, with a minimum guaranteed rate of return constitutes a "Fixed" product. Because a minimal few have misused sales tactics does not mean that we should paint all with the same brush.
I can sell fixed indexed annuities whether they remain fixed, or are portrayed, incorrectly, in my opinion, as securities products. However, in my opinion, there is no doubt that these products obviously meet the requirements of fixed products, and the limitation created by classifying these products as "securities" would be a gross injustice to the American Public.
Let the NAIC be responsible for fixed product sales conduct, and the SEC mind its own business with the risk-based products. There is obviously more work to be done with endless compliance issues, which continue to choke the securities sales process, and with the market conduct of securities hawkers
Leave fixed products alone
Very seriously,
Robert D. Long, Registered Rep