November 16, 2008
To Whom It May Concern,
I oppose this proposed rule (151a) for the following 3 reasons...
1. Fixed Index Annuities carry no risk to the consumer. It does not participate with the downswings of the stock market. I have helped many seniors over the years with EIA/FIA's and the number one reason most seniors like this type of annuity is that they can't lose their principal due to the market. With the economy today it is refreshing that these types of annuities are available for seniors so they can have peace of mind that their money is in something without risk. This past year I have statements that show my customers losing nothing even though that index showed losses of up to 40%.
2. Fixed Index Annuities are already under strict regulation from the State Insurance Departments. I understand that there have been licensed agents that ignored suitability when it comes to FIA's. However, I have also seen security representatives that have done the same thing and in most cases much worse. At least with FIA's the client can't lose everything. The worst thing that could happen is that they lose some money to surrender charges for early withdrawal. With many of the risk products available that too can also happen. Then on top of that they can also experience market losses. It will not make a difference by having the SEC regulate instead of the State DOI. The real change that is needed is with the actual insurance companies being stricter on suitability and coming out with better customer friendly products. We have definitely seen that over the past year and I believe we will continue to see positive changes in the future.
3. Even if this rule is adopted I am confident that it will not end there. There will be lawsuits and millions of dollars spent by both parties in fighting over this rule adoption. Based on my research it appears that the SEC would most likely lose this lawsuit based on the existing laws. No one will benefit from the time and money that will be spent in this fight.
I have been a licensed insurance agent for 14 years and have found that fixed index annuities are a truly useful product for seniors. I truly hope that this rule is not adopted. If it is adopted I will be one of the many that will go out and get my securities licensing. That of course will cost me more time and money but maybe this is what rule 151a is all about
David R. Schroeder
National Sales Director
Estate Preservation Agency