Subject: File No. S7-14-08
From: F. Lamar Watson
Affiliation: financial planner

August 7, 2008

I have been a licensed agent since 1949 and I formed my first Broker/Dealer in 1969. I believe the NASD has failed in it's supervisory role: not because the constraints are not desirable but because it is essentially reactive and belatively so. To give the SEC and the NASD additional responsibility would simply produce a greater bureaucracy and more expensive, less effective supervision. I recognise that whenever a new financial product becomes popular and sales accelerate, abuses occur and unquestionably we have seen some abusive selling practices of indexed products. However, over the last 2 years, I have been favorably impressed by the combined efforts of insurance companies and the state regulators to better underwrite and supervise new business activity.

With overwhelming evidence from the current financial debacle that Federal oversight either through agencies or Congress has been totally inept, I shudder at the prospect of an expanded Federal regulatory role.

Finally, Rule 151,A is factually deficient. The risk of loss in a fixed index product is borne by the insurance company, not the policy owner. It simply is not an investment