Subject: File No. S7-14-08
From: John W Homer
Affiliation: Financial Advisor

October 23, 2008

In my opinion, index annuities should NOT be regulated by the SEC. I am a registered rep and understand the differences between securities such as variable annuities, mutual funds, variable life, and index annuities.

Index annuities are not the answer to all situations. They have a place. They offer guarantees at the cost of sharing upside potential with the insurer. These guarantees are related to guarantees found in other fixed annuities and focus on the safety of principle. Such guarantees are very different than the income guarantees of variable annuities.

Index annuities earn interest. The value of the annuity is not subject to downward movements of the market in the same way that such movements affect mutual funds or variable annuities. It behaves much more like a traditional fixed annuity than like any security.

The assumption that only the SEC can oversee the sale of index annuities has no substance. There are agents who do not represent index annuities accurately, just as there are registered reps. who misrepresent securities. There are penalties for any misrepresentation.

Having index annuities regulated by the SEC, imposes an additional, unneeded, expense in the distribution process, with no additional benefit. I fail to see the logic of this result.