Subject: File No. S7-14-08
From: Eric M Osterhaus

August 25, 2008

Regarding #33-8933.

Having been involved in the insurance industry from 1996 - 2007 I was involved with the marketing and sales of fixed indexed annuities almost from their inception. FIA's have seen an evolution from its beginnings in both product design and function, as well as the basic understanding of those marketing and purchasing the products as to where they "fit" in the scheme of a financial portfolio.

I have had the opportunity to see these products perform well, badly and indifferently....but this response really is not about performance of the product.

FIA's (like ALL viable financial products) have a place and purpose to serve individual investors and clients. FIA's (like ALL viable financial products) also can be mis-represented by those marketing them, and misunderstood by those purchasing them.

FIA's have served a valuable resource for individual savers and investors since they were introduced. They have served to give "balance" to the idea that the only way to have opportunity to outpace "safe money" rates is to "take a deep breath" and put your money in a securities-regulated tool. Why is there such healthy, and needed, regulation of securities products? My opinion is that, very simply...risk to the individual saver's and investors' principle. This has always (and hopefully will continue to be) the benchmark as to what need to be "federally regulated."

I am no longer involved in the insurance industry and have no financial stake in whether FIA's fall under FINRA's supervision. However, I am doubtful as to the true intent behind the securities industry "concern" regarding those purchasing FIA's. Whose interests are best served by these products being supervised...the saver's and investor's or FINRA's?

However, at the risk of being blunt...this is obviously about "the money."

Proper education and representation of what the products are, what they can do, what they can't do, and how they fit in a individuals portfolio are, OF COURSE, critical. Proper supervision of the sales practices of those promoting FIA's needs to continue to increase to insure that the public is not being subjected to unscrupulous practices. One can simply look at how long "tried and true" financial products, such as mutual funds (which fall under FINRA's supervision) continue to be misrepresented and improperly supervised...costing the individual investor not only "return risk" but also principle risk.

This action is about "the money." Specifically, the money that is flowing from Wall Street to the insurance industry. Wall Street sees the FIA as a threat to their "turf" and have been "sharpening their pencils" since the last failed attempt to have them become securities regulated.

This proposed change IS NOT about what is right and good for the American saver and investor....it's about what IS good for Wall Street. This action will serve one purpose and one purpose only. It will serve to greatly reduce (if not eliminate) access to a financial tool that American investors need and desire.

America was built on a system of "checks and balances" and the most wonderful aspect of the FIA is that by having them marketed by BOTH insurance and securities registred salespeople the investor had an equal opportunity to weigh the options being presented. This proposal will effectively end that balance...shifting the weight of what is being presented to the individual investor back to "true" securities products. This will "flush" the money back into Wall Street which is, of course, the true purpose of this action.