Subject: File No. S7-14-08
From: Caroline M Peek
Affiliation: Series 65, CRFA

October 29, 2008

Fixed Index Annuities are excellent products providing guarantees, flexibility, tax-deferral many other advantages. While FIAs are not for everyone nor is there any one savings or investment product for EVERYONE yet FIAs give consumers a unique guaranteed protection and an opportunity for higher accumulation versus traditional fixed annuities. The SEC draft regulation (151A) adds an unnecessary layer of securities regulation to this INSURANCE product. Rule 151A would transform most FIAs as well as some non-indexed fixed annuities into securities. This will have far-reaching consequences by disrupting the manner in which FIAs are sold today. Beyond that it defies common sense that a product which has no market-related downside risk should be considered a security in the same manner as mutual funds or variable products where investors bear the risk of market losses. (Many consumers have a gross misperception understanding of how a variable annuity actually works.) The SEC, along with other critics, have focused on abuses in the marketing of Fixed Index Annuities (FIA). Needless to say there are abuses in the marketing of ALL financial products, including many that are already regulated by the SEC, ie - Variable Annuities, CMO's, etc. Recent market downturns highlights the value of FIA's. FIA-holders have peace of mind that market fluctuations do not adversely affect their account values. Fair play demands that a proposal of this magnitude should not be rushed or adopted hastily.