Subject: File No. S7-14-08
From: David Shafer, PhD

August 14, 2008

This is simply a way for security firms to increase their revenue over insurance firms. For a indexed annuity to be a security it would need to present downside risk of principal, which it does not. There is already case law (Malone v. Addison Insurance Marketing) adjudicating indexed annuities as a fixed INSURANCE product, not a security. Finally, if this product is re-defined as a security you will see additional costs which will hurt consumers and make it harder for consumers to pursue complaints by making them have to hire an attorney.
This change is bad for the consumer, favors one type of business over another, and throws well defined classifications out the window. Don't reclassify indexed annuities.