November 17, 2008
To whom it may concern:
I have been an insurance agent since last year and securities licensed series 6,63 and 65 as well. It is my understanding that a savings vehicle, guaranteed to be worth more tomorrow than yesterday, having no potential for loss of principal, was not and could not be considered a security. These vehicles are issued by banks and insurance companies with a stated guaranteed minimum interest rate either for the duration of the holding period or as a lifetime minimum rate of return.
Fixed index annuities fall under the definition above, are accepted by the consumer as no-risk investment alternatives and SHOULD NOT BE registered or considered as investments that entail the possibility of a reduction in principal value during the holding period. As a matter of fact, if the deposited, invested or premium paid amount of the consumer into a fixed annuity is compromised in some way, either the Federal government or State government is responsible within certain limitations, to refund these losses. The same cannot be said for securities and therefore the conclusion MUST BE, that fixed annuities of all type, index or traditional are NOT securities and should not be treated as such.
To classify a fixed principal investment such as ANY fixed annuity as a "security" could be injurious to retirees who drastically need protection in uncertain economic times such as being experienced in our current worldwide markets. This classification change should not be taken in haste as it's ramifications have not been adequately evaluated.
In addition, the entire industry would need training in fixed investments as currently broker dealers have limited knowledge of how they work and how to oversee them. The addition cost and expense will certainly cut into the overall value that fixed annuities can provide to those nearing or in retirement.
Respectfully submitted,
Shane R. Couturier
American Prosperity Group