October 19, 2008
Dear SEC,
RE: Proposed Ruling Section 57-14-08
I am licensed to market fixed annuities and fixed indexed annuities. None of the products that I offer my clients involve any investments or risk. I consider myself an expert in serving my clients, because I am totally aware of what the insurance company contract states to be a contractual agreement between that Legal Life Reserve Insurance Carrier and My Client. The fact that fixed annuities offer protection to many families, and help them create an income they can not outlive, is a very desirable attribute to a safe money account. The fact that the growth from the fixed annuities grows tax deferred is also a very desirable attribute of these products.
The fixed indexed annuity has come under fire, perhaps because so many registered investment advisors marketed it to their client bases after the technical financial bubble of 2001 and 2002. Seniors in particular were looking for safety. Fixed indexed annuites were described as different than variable annuities by these registered investment advisors and also by certified financial planners. Some of the fixed annuities offered very large commissions that were attractive and heavily marketed by large IMO's. These IMO's serve both the securies side and also the insurance side. It is further my understanding that considering these Securities Licensed Professionals also did not share those large commissions with their brokers, because they would be able to obtain seperate licenses, and not be "downline from their broker".
Further considering that in the years 2002, 2003 and 2004, over 35 percent of these " fixed indexed annuities" were marketed or sold by financial professionals,seeking to provide a safe money account to their clients. One may conclude that the "Upline Broker" lost out on significant income that went directly to the also "Independent Insurance Agent".
Many of these financial planners who held insurance licenses also, were motivated by large commission products and many did not do due-diligence into the guts of the contract. Some of these "Fixed Indexed Annuities" were not so great for the consumer, but great income for the agent/financial professional. One may further conclude that in many instances good intentions were being made, but a lack of knowledge about how a product works means knowing how it is built, how strong the caps are, what the participation rates are, what the minimum guarantees are.
I can affirm and promise that when one markets big commission products the consumer's best interest is not being served. This response or posting of my comments may not make as much sense to the masses of the people, but it is simply not fair for the SEC to impose it's judgements on the Insurance Industry.
I am proud to be a licensed insurance agent who has sought out specialized knowledge about preservation and protection of one's assets, to maximize them, provide security and safety. Fixed Indexed Annuities and Fixed annuites are safe money accounts. They are not investments, and are backed by the strength of the carrier that offers them. I have no desire to sell anything that invloves any risk, and I'm proud of that.
For the SEC to somehow think it has a right to impose their regulations in the Safe Insurance Industry would be one great disservice to the American People. The State Insurance Commissioners in the respective states in which they reside are much more capable of taking care of the consumers in their states than the SEC could ever be. The SEC is out of touch with reality with their continued motivation to regulate regulate. One wouild have to further conclude that with the economies current state of affairs my clients certainly do not want the SEC involved in any regulation of their "Safe Money Annuities" Thank you very much for allowing me the ability to give my opinion, and perhaps a different point of view.
Independent Insurance Agency owner is what I have chosen as a career and a service to those that I serve. I'm board certified in estate planning, and am thankful that I do not put any of my client's money at risk. That is not my goal, and my client's are thankful for that. Being independent and not having anyone try and tell me what I need to sell today is how "I want to STAY" I promise and affirm I only act in the best interest of my clients. Please DO NOT take away my ability to serve my clients by imposing your regulations on me.
Sincerely,
P.Smith
Virginia