November 13, 2008

Subject: File No. S7-14-08

Indexed annuities ahould be subject io the more intense scrutiny of the SEC. State regulations and regulators have failed miserably to protect senior citizens from the aggressive sales tactics of agents who do not review the overall financial situation of the client, or ignore, or do not understand how this product will fit into a diversified portfolio of fixed and equity investments.

Many of these agents are ignorant of, even antagonistic toward, any type of equity investment. They do not understand investing and do not understand risk management principles. This is important to note because they are often advising clients to sell their equity positions to move the money into a fixed indexed annuity.

Insurance companies are not blameless in the over-selling of these products as the commissions for selling them are 3 to 4 times the commissions on fixed(non-indexed) annuities.

Agents generally do not even understand how these products are constructed. They know nothing of the options used to fund the instruments. The sales training given does not even touch on these underlying investments. The complexity of the underlying investment instruments is similar to the complexity of the instruments which have led to the recent, and ongoing, subprime lending debacle. If agents do not have the training to understand and explain how the investment portion of the annuity works, they should not be allowed to sell them.

The regulatory failures leading to the current credit crisis should be a warning of the consequences of inadequate oversight of complex financial products. Insurance regulations are not adequate protection as they vary from state to state, Insurance regulators do not have experience regulating equity products or evaluating the risks involved.

I have sold Indexed Annuities. I have had to explain these products to people who were introduced to them by insurance agents. My anecdotal experience is that my clients were unclear and even given false impressions of how the product would work.

I am a Certified Financial Planner and a member of the Financial Planning Association. I urge you to maintain the additional protection of SEC regulations.I believe Indexed Annuities have a place in the full panoply of investment options. The sale of these products must be adequately regulated, however.

Thank you for your attention.

Alan Gammel