July 22, 2008
I heard that the SEC has proposed to make Indexed Annuities a security, with all the added restrictions and costs associated with securities. PLEASE LEAVE THIS AS IS AND DON'T MAKE THEM SECURITIES. Here's why:
1. As a retired saving citizen, I have an indexed annuity. I got it because it offers me the protections not offered by securities, such as guarantee of my principal and the declared interest credited, whether determined by insurance company declaration or by formula tied to the index.
2. Many of my friend are risk adverse and annuities offer the vehicles that meet their needs. They would not save otherwise. With Social Security on the brink, we want to keep a savings avenue that the general public (not just the rich) can use to save. Stocks and bonds are not for everybody, esp. the average worker.
3. If IA become securities, they will become costly, due to the added costs of filings, regulations and supervision. These costs are passed on to the saver, discouraging their saving.
4. Having to use a registered representative will prohibit fair competition and better access to savings through insurance companies--and raise costs to the saver.
5. Many agents would be restricted in their offerings to the average saver---not a good idea for those who want to consider IA or fixed annuities from the local agent These agents are effective working under state regulatory supervision and the companies they represent. Adding additional requirements will jeopardize their work unnecessarily.
6. Making IA a security would cause problems financially for individuals and small businesses who want to save, esp. in a smaller scale than large investers in stocks and bonds. They would discourage savings.
7. Worse of all, it would give broker/dealers the ability to SUPPRESS this viable and useful form of retirement savings. Their competitive spirit would not serve the needs of present clients, but their own needs. Retiring individuals do not want to put their retirment savings into risk avenues Why force it
8. IA have been successful at meeting our needs as it is, esp. for most average workers. We like our guarantees