Subject: File No. S7-14-08
From: JUNIUS T LILES, III
Affiliation: 30 YEAR LICENSED INSURANCE PROFESSIONAL

June 29, 2008

Dear Gentlemen, I have been marketing insurance and investment products since 1978, having been securities licensed from 1983-2001, and holding an insurance license from 1978 to date. In 1999, I learned about and began marketing Index Annuities. In 2001, I decided not to renew my series 6,63, and 26 securities licenses. The fact that Index Annuities have been sold since 1995, without a requirement to be registered as securities, should give you great pause for thought about your recent suggestion to require such. The fact that an Index Annuity is simply a FIXED ANNUITY that "does not expose the annuitant to any risk of loss from stock market declines", should seperate them from "actual secuities products". With an Index Annuity the purchaser "INDIRECTLY BENEFITS" from the INDEX and has "NO DOWNSIDE RISK and owns NO SHARES" of anything, whereas in a mutual fund or variable annuity, the owner "DIRECTLY benefits" from the action of the stock market precisely because they "DO own shares of the mutual fund", and therefore they can (and often do) lose account value in market declines. There is no need to require these products to be registered as securities, because they are not. It might be good to require additional training for licensed reps to market the products, but that should be decided by the STATE INSURANCE DEPARTMENTS and their Commissioners, not by you. It would seem that there is a lack of true understanding on your part as to exactly what an Index Annuity is, and how it works. I strongly oppose your decision, and feel it is misguided and political. I hope you will withdraw it and cease and desist your efforts.