August 11, 2008
Date 08/11/08
I am writing today to oppose the proposed rule 151A. I personally belive that this proposition is ill-conceived and lacking merit. Here are a few important points to consider:
Fixed indexed annuities are well-designed products that give consumers guarantees, flexibility, tax-deferral, and many other advantages. The recent downturn in the stock market highlights the very strength and value of FIAs.
Proposed Rule 151A is ill-conceived. Many securities lawyers find the proposal to be completely unsupported by judicial precedents on what constitutes an annuity exempt from securities laws. Beyond that, it defies common sense that a product which has virtually no market-related downside risk should be considered a security in the same manner as mutual funds or variable products where investors truly bear risk for market losses, including risk of loss of principal due to market declines.
The proposal has not been appropriately vetted for comment – and appears to be being rushed to adoption. With virtually no forewarning, the SEC unveiled this proposal on June 25th and has allowed for comments only until September 10th. This means a proposal with profound effects on the insurance industry could become law within just a couple months even though the general public has had minimal opportunity to evaluate, comment, and possibly offer alterative approaches to address any valid concerns. Fair play demands that a proposal of this magnitude not be rushed or adopted hastily.
I urge you, the SEC to withdraw this ill-conceived proposal. At a minimum, I ask you to slow down the adoption process so there can be adequate time for review of all implications and ramifications of this proposal.
I greatly appreciate your attention to this matter.
Sincerely yours,
Heather Hutchinson