Subject: File No. S7-14-08
From: William H Barbee, III
Affiliation: Life Insurance Agent, Former Local President National Association of Insurance and Financial Advisors

November 10, 2008

Good Day

I am a Life Insurance professional, in practice for more than a decade. I have held securities licensing, including the required licensing which allows me to provide investment advice to my clients (RIA). I wish to offer my comments on this proposed regulation.

I cannot more strongly offer that the SECs draft regulation (rule 151A) adds an unnecessary layer of securities regulation to this insurance product. Rule 151A would turn most FIA products — as well as some non-indexed fixed annuities — into securities. Should this regulation be implemented as offered, it will have far-reaching consequences by disrupting the manner in which these products are sold today - causing confusion over the differences between insurance versus securities and providing little additional consumer protection at tremendous cost to companies, agents and ultimately to MY CLIENTS.

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

FIA products are already heavily regulated by state insurance departments. Through the NAIC, state regulators have worked hard over many years to come up with appropriate suitability and disclosure requirements for FIA products. To the credit of state insurance regulators,
this work continues today and should not be derailed by the SECs unilateral action.

Realizing that the SEC as well as other critics have rightly focused on abuses in the marketing of these
products, I believe that criticisms of FIAs have been exaggerated and market abuses have been largely corrected.

Needless to say, there are abuses in the marketing of ALL financial products, including many that are already regulated by the SEC. The fact is the FIA market has
grown rapidly because there is a demand for these products and generally consumers have been pleased with the results.

In light of the recent market volatility and insecurity, many of my clients have sought out - even demanded - the protections which FIAs provide. While millions of Americans suffered financial losses as a result of a twenty percent plunge in the stock market, my clients who own FIAs DID NOT LOSE ONE PENNY of retirement savings because of market turmoil.

FIA-holders have peace of mind that market fluctuations do not adversely affect their account values. It is BECAUSE these products are insurance contracts AND NOT INVESTMENTS that these guarantees, this security can be provided

Finally, the SEC proposal has not been appropriately available for comment by the market and by Producers — and appears to be rushed for adoption. With virtually no forewarning, the SEC unveiled this proposal on June 25 and has allowed for comments only until September 10 -- now extended until November 17. This means a proposal with profound effects on the insurance industry could become law within just a couple of months even though agents and insurers have had minimal opportunity to evaluate, comment and possibly offer alternative approaches to address any valid concerns. This sudden action comes ten years after the SEC first identified issues left dormant as the FIA market grew and evolved. Fair play demands that a proposal of this magnitude not be rushed or adopted hastily.

It is my hope and expectation that the SEC will continue to allow the sale of FIAs to be regulated by the State Insurance Departments, monitored by the companies which offer these products, and by professional agents like me rather than be inappropriately classified as securities and overseen by the SEC and FINRA.

Cordially,

Bill Barbee
Life Insurance Professional
California