Subject: File No. S7-14-08
From: Don ald B Rowell

August 16, 2008

The legal authority of the SEC does not extend to insurance products. Commissioner Cox has beeen quoted as desirous of "cracking down on fraud.." as a reason for putting insurance into a system to protect consumers. This is the same system that had close to 600 complaints on variable annuities, which are in the system and half that many complaints about index annuities which are without any registration requirements with the SEC. How would putting insurance into a poor system of protecting consumers result in a better outcome? FINRA has an obvious objective to retain retirement money in brokerage accounts and stop the flow into indexed annuity contracts. As CEO of FINRA, it should be no surprise that Mary Shapiro wants to regulate insurance. If index annuities become securities by definition it will ignore the difference between securities which could lose their full value and annuities which always pay the underlying value.
The NAIC has succeeded in their efforts to create and improve compliance models to clean up practices that have been abusive. NASAA is less than forthcoming about the reasons which prompted them to ask the SEC for the rule change. "..the cause of Main Street investor protection"