Subject: Proposed Rule 151A

July 8, 2008

I am adamant in my opposition to this intrusion into the insurance field by the SEC. I recommend that you clean up your own house first---mutual funds fees and poor performance, failure to adequately advise purchasers of the 1099 tax problem, Bear Sterns, etc., to name a few (and, there are many more.) I cannot see any good outcome by allowing the SEC to regulate the area of Fixed Index Annuiities. The SEC commissioner’s statement indicated that the complaints notifications come from securities’ regulators in various states. That should tell him that the real problem might be variable annuities. Did anyone think to ask the insurance commissioners for their records of complaints against fixed index annuities?

For 38 years I have advised clients on the benefits and rules governing the insurance products I sell. There have been no complaints to date filed. The insurance departments have a splendid record of regulation compared to the SEC. And, a fixed index annuity is an insurance product by any definition. This is the first time I have formalized a complaint against a proposed rule. The real issue, as I see it, is an attempt by the equity sales industry to GRAB a product that they can offer, subject to their own whims as to compensation and control.

As a Republican, I also find revolting the fact that the Administration appointed SEC commissioner would advocate a reduction of states’ rights in favor of Federalism. What’s gotten into the thinking of Washington these days? Surely, the public polls showing the very low ratings of Congress and the Administration should tell someone there what my customers/your constituents are thinking. This action is ill-advised and will certainly be defeated. We, the insurance industry, will certainly mount a strong opposition to this both the national and grass-roots levels.

As to the program aired on “Dateline,” it was a piece of “yellow” journalism. They did not show any agent giving the correct advice; we were all painted with the same brush. I guess TRUTH is not a word that NBC knows. I’m sure NBC could do a piece on stock brokers advising their clients and probably have a “two hour program.” The above are my opinions.

Douglas R. Franklin, CLU, ChFC
Life & Qualifying Member of the Million Dollar Round Table
Member of the National Association of Insurance and Financial Advisors
Past State President of the North Carolina Association of Insurance and Financial Advisors
Past Local President of the WNCAIFA
Past Local President of the WNC Chapter of CLU
Past Local President of the Land of the Sky Estate Planning Council
Graduate, North Carolina State University, 1970, Economics