November 17, 2008

Subject: File No. S7-14-08

From: Ken Sutherland ChFC, CLU - Registered Investment Advisor

RE: Opposition to the proposed ruling.

I have been licensed in various capacities in the insurance and securities field for over 18 years. In the course of my work I provide annual reviews to my clients. In the past several months those who have both Index Annuities as well as equity Accounts with me have been greatly comforted that their Index Annuity has protected their principal and previous growth.

By far the most common question I have received is whether clients can move additional funds from the market to their Index Annuity contracts – clients of a wide age span want the assurance of asset protection. IN fact I have been receiving more thank you Notes and phone calls from clients over the past several weeks than every before. How many brokers can say the same?

In my nearly 20 years in insurance and equity work I have always heard of and seen evidence of some improper sales practice. The majority of these cases seem to involve clients who have lost money due to market risks that they did not understand or Agree to. It is quite rare – though not unheard of – for complaints about their money being too safe.

Given our current financial situation I find it ironic that the SEC is suggestion they can better regulate and supervise Index annuities Than can the state insurance departments. It seems the SEC is already understaffed and quite behind the 8ball on staying ahead Of abuses, scams and challenges in what they already have to do.

I think the situation with the AIG bailout is relevant here. What I hear reported in the news is the bailout of AIG Insurance company. I believe that is not accurate. Is it not a Federally regulated Financial holding company that is being bailed out? Am I correct that The AIG financial holding company – that was allowed to invest significant assets in dubious investments – actually attempted to Find relive by borrowing assets from their subsidiary insurance companies …. And were turned down by state regulators????

What would have happened if the SEC had taken over regulation of such insurance companies some years ago … would the consumer Have had all their “eggs” in one inadequate “regulatory basket?”

THE PUBLIC IS SEEKING ADDITIONAL ACCESS TO MINIMUM GUARANTEED PRODUCTS …. NOT LESS!

When I report to my clients that the SEC wants to declare Index Annuities a “security” because you might earn more than is guaranteed I always get in response the same dumbfounded look!!!!!!! The typical response is …. “what are they trying to protect us from?”

I take my responsibilities seriously and welcome the stringent compliance requirements currently imposed by the state regulators. I do Not