October 14, 2008
As an insurance agent who does not wear two hats, meaning I don't sell fixed insurance products as well as securities products, I find that my clients can sleep better at night knowing what they bought from me has guarantees and that their money is safe and secure. I am not licensed for securities and I only market fixed products. Products that provide my clients with guarantees.
Having the ability to provide my clients with an option that allows them to participate in the potential growth if the economy performs well and get returns that are based in part on how well the economy is doing rather than restricting them to simply accepting the fixed interest rate declared by the insurance company is helping me provide better service to my clients. My ability to market index annuities that can increase but not diminish in value to my clients is a great comfort to my clients and I.
Since index annuities are fixed and not securities products and since they are already (better) regulated, it seems that the licensing required to market them should be the same licensing required to sell any other fixed insurance product. After all they do not have sub accounts that are invested directly in the stock market nor are the funds placed in them managed or subject to risk. Requiring hard working insurance professionals like myself to become licensed for securities will be an unnecessary hardship. Requiring a securities license to market index annuities may lead some agents who deal with seniors to be tempted to offer such securities to clients who are in no position to invest in the stock market.
When I get a call from a client who is concerned about the economy and their money, I can assure them that they have not lost one dime. I do however come across many people who's brokerage statements including their variable annuity statements have diminished in value. Most of these people depend on that money to help them have a comfortable retirement that is not assured any longer.
Please do not let the pressure from the securities industry and it's lobbyists make you change the type of licensing required to market index annuities. As we all witness what is happening to the financial markets, primarily due to greed in sectors of the securities market, it's nice to have fixed index annuities marketed by insurance professionals and not by stock brokers. Let the stock brokers sell stocks, bonds and mutual funds to people who can stand and understand the risk.
Very seldom do we hear about an insurance company needing to be rescued. The ones that do get into trouble do so by not sticking to their core insurance business and by getting into the murky waters of the securities world. Please let us insurance professionals sell insurance products including fixed annuities, including index annuities, and let the securities brokers sell their products. Sincerely,
Eli Mizrahi
NW Senior Resources Corp.