Subject: File No. S7-14-08
From: Steven R DeJohn
Affiliation: CEO

August 18, 2008

Dear Mr. Cox:

Fixed Index Annuities are not only needed by baby boomers and retirees as a "middle ground" between CD's and the risky stock market, they represent what we sell to millions of Americans, "Sleep Insurance".

From 2000-2002, it was the worst three years in stock market since the depression. 7 trillion dollars were lost in the stock market. Not one dime was lost with an index annuity during that time. Does that sound like a security?

In the proposed ruling section 151-A: the number one reason investors buy Index annuites was not mentioned, "YOU CANNOT LOSE ANY PRINCIPAL, BONUS,OR PREVIOUS INTEREST EARNED DUE TO NEGATIVE MARKETS".

This means that with the 125 Billion dollars thus far protected in fixed Index annuity contracts throuhgout 58 insurance carriers, NOT ONE DIME WAS LOST DURING THOSE TERRIBLE TIMES.

As we are now again dealing with a failing stock market, war in Iraq, oil prices and many other uncontrolable world wide events that directly impact the stock market and trillions of dollars of Americans retirement accounts, Fixed Index Annuities are a very viable and needed option for part of one's retirement strategy.

You are either pregnant or not. There is no ambiguity or grey area. You are either a security or not. Your assertion that an "Index annuity uses an index to compute the interest that a consumer makes in any given contract" automatically makes it a security is questionable at best.

The Safe Harbour laws that define and require what makes a product a fixed annuty is within ALL Fixed Index Annuites.

This proposed ruling is very transparant as to the underlying objective that is truly at hand here, very simliar to the 05-50 ruling made a few years ago with the NASD, now FINRA. Again your assertion relies mostly on the "supervision" of these sales, when in reality it is the ability to get "paid" when these sales are made.

Billions of Fixed Index Annuity contracts at that time were being sold by agent/advisors with NASD affiliations.

These same registered representatives were "selling away" from their B/D's. This was known nationwide and the reason was to get paid without the commission reduction through a broker dealer. Unfortunatley this too did not work as it still very prevalant today.

What you are proposing is that sales of F.I.A.'s with the SEC's watchful eye will somehow make all sales more suitable for investors again is a hard one to swallow. This tells me you do not trust in the following order :

1. The product designers in the acturial departments in the insurance companies that design the products.
2. The Insurance commissioners state department which reviews all index annuities for approval to sell in their own state.
3. The insurance commissioners themselves and their over sight departments that watch all sales of index annities.
4. The insurance companies own "suitability" forms and compliance departments that review ALL sales of new applications that come in daily.
5. The one Million Insurace Agents that sell the products to the end user.

Last year there was 1 complaint for every 1900 Index Annuity sales in the United States.

I can say this with great confidence as being a Top of the Table producer for the past 8 years with selling Index Annuites with my average age client of 72 years old.

When they come into our office and lay down their brokerage statements all one has to do is look at the pie chart on the front page and you will clearly see that 80-95% of these seniors retirement accounts with the major brokerage houses in the United States are direclty in the market via stocks mutual funds. 80-95%

My question to you is:

"Who is watching the brokers of the world'?"

How do they get away with this type of planning? Does it seem approprate that the average consumer in their 70's has more than 80% of their Nest-Egg directly in the market? Why do you think that is? Is it simply due to the fact that is how the broker makes a living?

My next question is, who truly is the "predator" as dateline tried to suggest in it's very lop-sided and animated segment? The brokers who are gambling with 80-95% of one's portfolio directly in the market with Seniors retirement accounts or the insurance agent who is protecting their life savings?

Similar to the Dateline segment, you have conveniently left out all the reason why Americans buy Fixed Index Annuites that securities simply cannot provide.

1. Safety of Principal.
2. If not qualified money-tax deferred growth benefits.
3. Guaranteed life time income regardless of market performance.
4. Nursing home riders.
5. Termminal illness riders.
6. Keep positive years gains when the following year might be a negative market and wipe out all of one's gains immediatley thereafter.
7. Transfer of funds to heirs without worrying about the stock market depleting one's life-time savings.
8. Peace of Mind and sleep Insurance.
9. Alternative to low yielding CD's.
10.Avoiding potential affiliation with Mutual fund companies who have paid Billions of dollars in fines in the past 5 years for misleading the public with deceptive sales practices as documenented.

Over the past 8 years that I have been selling fixed Index Annuities and have not had one complaint.

Not one of my clients have lost one dime under my watch?

I would welcome you and or any committee member to call any of my clients today and ask them if they think they own a "security" with me in today's down market and compare that to their mutual funds or stocks.

If you cannot lose any of your original principal or any of the interest that you may have earned due to a future negative market, how can you say that is a security?

Do not get confused or distorted with the "tool" that gets the end result. Simply because an index may compute one's interest as a crediting method does not make it a security. That index is merely the "tool" that is used for the end result. Safety, peace of mind and sleep insurance that they cannot lose any money. That is not a security.

I look forward to your comments and also appeal to you to extend this extremely short waiting period to another 90 days as suggested by the NAIC with this very abrubt and one sided proposed ruling.

I also hope that no additional underlying agenda's may exist with this proposal such as any of the SEC's committee members having an offer to work with any securities firm in the near future after their term is over. This too could be a conflict of interest and a public concern in the future as using one's current position to change laws that may affect one's personal gain in the future.

Steven R. DeJohn
President