July 30, 2008
I have read everything that I could lay my hands on, and have come to one conclusion. My opinion probably will not fly with most agents.
I am not sure what an indexed annuity or indexed life insurance contract is.
But what I sincerely feel, is that anyone who sells these products should be securities licensed.
Before we could even say anything about stocks, bonds, mutual funds, etc we had to have our securities license. Why doesn't the law apply to those selling these products. When the agent can talk about the SP 500 avg, or the DOW or whatever, as far as I am concerned he is making a securities statement. He should be licensed.
Which begs the question, if the agent should be licensed, why should not the product be a securities. A very good question, and one that I can't answer.
I don't know what the insuring companies are saying, but I would believe that the broker dealers have a smile on their face from ear to ear. To have these products listed as a security would allow them to get their haircut from these sales. A haircut that they are not receiving because of the "non-securities" description of the product currently.