October 26, 2008
Clearly, EIA's are sold by agents using the appeal of the growth potential of variable stock market indexes, while promoting the security and safety of the minimum gaurantees. The prospective buyers can get better fixed interest returns buying "fixed and immediate annuities" so therefore they would not buy the EIA's unless the agent promoted the returns avaialable in the market as additional enticement. VAriable Annuity contracts that offer "living benefits" or guaranteed minimum income benefits are the most similar financial products in the market. They have less surrender charges, more access to invested sums, cost less, and in general are much more flexible than the EIA"S. EIA's deserve to be treated on an equal basis with these, mutual funds and stocks so that the public has the same protection. Currently most EIA's are sold by agents who are insurance licensed only, some have no training in securities yet the underlying indexes are promoted based on past performance. In many other cases the agents in fact give up their securities license so they can sell EIA's for the more lucrative commissions and relieve themselves of the regulatory burden and oversight of securities licensing bodies. Avoiding the potential complaints that would show up on an FINRA record. Clearly this is one of many areas that require more rather than less regulatory oversight to protect the public.