October 21, 2008
Gentlemen,
The annuity products you are proposing to regulate as securities (Index Annuities), are basic products that do not involve any direct purchase of individual securities or mutual funds. The contracts provide basic guarantees as to principal and minimum returns that are comunicated in the contracts. There is an upside potential based upon linking the contract's upside return to a particular index such as the Standard Poors index. The contracts do not provide for any purchase of securities what so ever. There is no reduction in value when the market contracts as it is currently.
Basic insurance products with certain guarantees, are the basis for all financial planning and family protection. Many people do not want the risk associated with direct investment in stock and bond market products that are subject to significant fluctuations of principal.
To take these products that are built on the principals of providing fundemental guarantees of principal, from agents that want to specalize in basic foundation financial products would be a travesty.
Sincerely,
Kenneth W. Hall