August 27, 2008
My only comment is that Indexed Annuities are clearly not securities. Americans need a choice between products which involve their shouldering the risk, and ones which require the selling companies to carry the risk. No mater how you look at it, indexed annuities are essentially the same as fixed annuities - the insurance company holds the risk of maintaining principle - and guarantees some rate of earnings. The method they use to determine possible future rates of return are simply more favorable to the client with an indexed annuity, than with most fixed products.
The only problem for the consumer has been how these products have been sold by some unscrupulous, or ill-informed, insurance agents. The remedy for this is simply greater compliance imposed on the insurance companies, and better oversight by the state insurance commissioners.