July 9, 2008
RE S7-14-08 7/9/2008
The SEC has no jurisdiction on the subject of Indexed or Fixed annuities and I oppose any such change as to reclassfication of either to securities. The SEC and NASD are both overstepping their grounds as these products fall under the control and jurisdiction of the Insurance Commissioner's in every State.
Let me give a couple of examples and critical issues
1) How would you write/prepare a prospectus on a fixed or indexed annuity when the buyer/owner is not exposed to Risk?
2) If the fixed or indexed annuity were to be defined as a security, wouldn't all existing securities have to provide the same protection to owner's/buyer's i.e.- No risk of loss? The brokerage and investment advisor companies would have to assume all risk of loss, just as the Insurance companies
3) Is the SEC prepared to adopt a Lifetime Income Guarantee for all securities as an optional rider? Better be ready to do so.
4) Is the SEC going to propose tax deferral on all investments, such as provided by Indexed or Fixed Annuities?
5) 99% of my business comes from clients that HATE what Broker's and Investment Advisors have done to them over the past years. They want protection and guarantee's. If the SEC and NASD will sign on the dotted lines to provide the same protection/guarantee's as those provided by Insurance Companies, then do it first, before you try and govern the Insurance Industry.
I never plan to sell or be associated with Securities, as I am much more confident in the protection and guarantee's offered by Inusrance Products. The SEC and NASD cannot dictate to me what I can and cannot do until such time the Insurance Commissioner's are done away with. I only offer Insurance products to prospective client's and not securities or investment advice.
The SEC and NASD need to address the problems in "THEIR INDUSTRY" for the protection of the publics well being.
Considering the past years the SEC and NASD have earned "FAILING GRADES". That's why you can't stand to see all the money leaving WallStreet and want to take control of the Indexed and Fixed Annuities offered by Insurance
Companies.
Again, I am opposed to any such legislation and the SEC does not overrule prior Court decisions/definitions. Fixed or Indexed annuities are NOT SECURITIES
Sincerely,
Barry Burge