Subject: File No. S7-14-08
From: John Lyle, CLU
Affiliation: Past President local NAIFA, Past President AFMP

November 4, 2008

Fixed Indexed Annuities (FIAs) are excellent products that give consumer gurantees, flexibility, tax-deferral and many other advantages. While FIAs are not for everyone, sales of these products have soared because they give consumers a unique combination of guaranteed protection and opportunity for higher accumulation than traditional fixed annuities.

Proposed rule 151A is ill-conceived. This proposal is confusing and completely unsupported by judicial precedents on what makes an annuity exempt from securities laws.
It defies common sense that FIAs have virtually no market-related downside risk but would be considered securities in the same manner as mutual funds or variable products which the investor bears the risk for market losses.
The proposed rule also seems at odds with Congressional intent.

The recent downturn in the markets highlight the value of FIAs. While millions of Americans suffered huge financial losses as a result of the 20% plus plunge in the stock market, FIA-holders have not lost a penny in retirement savings because of market turmoil.

If these products were "Securities" they would not afford the above mentioned peace of mind for investors.