July 17, 2008
I was always under the impression that a security was a financial instrument that involved the risk of principal and that if the value of this instrument went up you profitted and if it went down you could have a loss. How can a fixed indexed annuity be classified as a security if there is no risk of loss if held to the expiration of surrender charges. It appears to me that the states have done an excellent job of regulating the insurance industry over the past 100 years or so, while the NASD and now FINRA wants to usurp the states authority and enter into something they have had no expirence in regulating. The history of the NASD and now FINRA has not been particularly sterling, when you consider the scandals, such as ENRON and others, as well as the after hours trading scandal that came to light over the last few years.
I beleive that it would be in the best interest of the public and the state regulators to leave the enforcement of indexed annuities as is, and have FINRA concentrate on their current business of regulating true securities.