Subject: File No. S7-14-08
From: L David Overson, ChFC

August 11, 2008

The proposed rule to make indexed annuities subject to SEC/FINRA supervision is misguided and not founded on any facts I've been able to discover. As a securities representative who works with insurance products, I see no benefit to agents or policyholders by securitizing indexed annuities. I can see why broker/dealers would want to get in on the action, though.
According to a March 2008 NAIC report, indexed annuity policyholder complaints amount to only one-tenth of one percent of product sold. That's a pretty small complaint ratio. The assumption that the SEC can do a better job of policing annuity sales than the insurance industry can is quite disturbing to me. The Supreme Court has twice determined that these products are insurance products. I find no logical reason why the SEC should trump the conclusions of the Supreme Court on this issue.