July 16, 2008
I am very concerned over the news that the SEC wants to govern Fixed Indexed Annuities. I have lost a small fortune in the securities market. What makes you think you can do a better job that the State Insurance Departments can do with the FIA. People have lost trillions of dollars in the stock market since October 2007. I have not lost a penny with my FIA. If it ain't broke then leave it alone. I know you think most insurance agents are stupid, but that is not the case at all. Like your industry there may be a few crooks, but you sure have not protected people from losing money in variable annuities, mutual funds or stocks. Stay out of the insurance industry. You have enough problems in your industry to keep you busy.
Indexed annuities have been successful because the nature of the product meets the needs of the saving public
Indexed annuities are ridk - adverse savings vehicles - they are Not high-risk investment products where a consumer can lose his or her principal
Indexed annuities offer consumers important protections, namely:
(1) the guarantee of premiums paid and (2) guarantee of interest credited Indexed annuities provide underlying interest guarantees required by state law. There is little difference in the risk to a policyholder for a traditional fixed annuity versus an indexed annuity. Under both forms of annuities, the policyholder is at risk to the insurer's annual interest rate declaration, whether it is an expressed percentage amount or a formula relating to changes in an index.
The sales practices and suitability safeguards needed for index annuities are the same safeguards needed for all life and annuity products.
The proper supervision needed for traditional fixed annuities, indexed annuities, and life insurance can be, and is being, performed according to state insurance department rules.
The results of the SECs proposed rule will not be to benefit savers but to:
1. Reduce the number of agents who can offer a product that is beneficial to many savers
2. Burden indexed annuities with unneeded additional expenses (for filing, regulation, and supervision), the cost which will be borne by savers
3. Damage financially many individuals, small businesses, and smaller insurance companies and
4 Give Broker/Dealers the ability to suppress a viable, valuable, and successful form of retirement savings which has and would continue to provide strong competition to those retirement savings offerings traditionally made by Broker/Dealers.
5. There will be a large lay-off of wonderful people should this nonsense continue. Our economy is already in a mess, don't add to the problem
Again, this should be left to the State Insurance Departments and not be regulated by the SEC.