Subject: File No. S7-14-08
From: Steve Swanson

October 21, 2008

Dear Sec,
In regards to 151A ruling that you are looking at instituting, Fixed Indexed Annuities are a safe and useful vehicle for seniors and many others if they are fully explained. These contracts are not and should not be considered as a security.
I believe the reason for this move towards 151A is not to protect seniors or others is because of the loss of investments dollars under control of brokers and security firms. I believe that you should concentrate your efforts on placement of security products to seniors at a time in there lives that they can not afford to lose a penny.
I have seen over my career thousands of seniors that have been placed in security investments (most of the time 75% to 95% of there liquid and semi liquid assets) and have seen them lose 20% to 50% of these funds and there possibility of recouping these loses in there life time is slim to none.
I understand that some Fixed Indexed Annuities have long surrender charges but the client can not lose a penny if they do not surrender the contract or withdrawal more then the free withdrawal amount of the contract, also most of the time the clients that purchase these types of contracts are looking for safety an are not planning on accessing these funds during there life times with the intent of leaving these assets to there heirs.
I have also seen seniors qualified funds placed into security investments when they are at the point or are within a few years of having to take there RMDs. This does not make any sense. When they may have to take there RMD on a lesser value because of loss in the investment then the RMD was based on, this could cause there qualified funds to be cannibalized and some seniors are or where looking at the RMD to supplement there income in future years.
I think the SEC SHOULD be looking at these practices more then looking at Fixed Index Annuities just because Brokers and Security Firms are losing investment dollars under control.