November 17, 2008
Re Equity Indexed Annuity Regulation
I have been in the financial services industry as a licensed insurance agent and registered rep of a broker dealer since 1976. EIA's represent the worst of the many bad products to have come along over the last 30+ years I have been in practice.
Please place Equity Indexed Annuities EIA's) under the auspices of regulation by FINRA and the SEC. I have seen too many investors harmed by unscrupulous insurance agents misrepresenting the benefits and workings of these EIA's. Just today I met with a doctor client and his wife who were told by a salesman that his EIA from Allianz Life paid a minimum of 12% annually and that their funds would be fully liquide within 10 years. Further, that agent stated there were no associated costs with this EIA.
State insurance department regulations of this product and the product pushers selling them to the unsuspecting public are clearly insuffucient. It is time for real regulators to make these EIA's regulated securities. That will finally put an end to the lies, misrepresentations and, hopefully, lack of product knowledge by these scurilous peddlers. If the commission rates were set more similarily to Variable Annuities, thus eliminating the unjustifiably high commissions, many of these peddlers would crawl back under their rocks.
Although there are other extremely pressing matters with the financial crisis we are encountering, I plead with you to continue this process of determining the strong need for this product's regulation.
Those companies trying to convince you otherwise are the ones peddling this to the public. It is their own self interest in mind arguing for no oversight and registration of EIA's.
Copyrighted material redacted. See WebCE.com, "Equity Indexedc Annuities," Published by WebCE.com, LLC