November 16, 2008
File No. S7-14-08
Comment: I am a CPA and CFP with 25+ years of experience in the planning and investment arena as well as a member of the Financial Planning Association and am writing to you concerning the rule allowing the SEC to have oversight of indexed annuity sales, by including it in the definition of a security, in addition to the current state oversight by insurance commissioners.
I support the rule as a way of curbing abusive sales practices - particularly those targeting the elderly and vulnerable clients, who are the primary sales target of sellers of this product, who need protection from aggressive sales people. Unfortunately, I have met several elderly clients who have been encouraged to purchase these and similar annuities. In each instance, the client has a substantial lack of information regarding the risks that the would be incurring in the of the annuity.
The problem with this product is that not all of the downside risks, surrender charges and other suitability factors are not clearly disclosed or understood and not all states have adopted standards for the sale of this product. As a result, the insurance commissions do not have the tools to police this product; addtionally, not all insurance commissions have sufficient enforcement resources available to them to police this product.
Therefore, I encourage you to move forward with new regulations that will allow the SEC to to have oversight of these products and provide support to state regulations.
Thank you for your time,
Kathleen Huckabay, CPA & CFP