Subject: File Number S7-14-08

August 27, 2008

I could not be more supportive of the SECs desire to regulate certain annuity contracts as “securities”. It seems to me that something that “guarantees” a certain rate of return or is sold because “you get the upside of the market, without any downside risk” would certainly fit the bill as an “investment contract” as defined under the Securities Act of 1933 and, as such, should be regulated the same as a stock, bond, mutual fund, etc sale.

All of the people that I have seen selling these products sell them as “investments”, yet they are not held to the same standards of full and fair disclosure as required in FINRA Rule 2210. They promise high “first-year” interest rates, but never mention the much, much lower rates in subsequent years. They over-emphasize bonuses without having to disclose whether or not you can ever walk away with that bonus. And, they underplay the surrender period and surrender charges so that the average investor doesn’t realize how illiquid they are until it is too late.

If I were in charge, I would even go one step further. In addition to regulating these products as securities, I would also add a rule that says that, if the investor is 55 or above, they can NEVER be sold something that has a surrender period of greater than 1 year. In retirement, life situations change rapidly so being able to access your money without penalties is very important. If the investment company wants to pay high commissions and the client leaves, the investment company should take the commission back from the sales person and not from the investor.

So, nothing would make me happier than to see the SEC take over regulation of these types of annuity contracts as I believe that the investing public would be better served if there were more oversight.

Regards,

Todd VanDenburg, CSA, RFC, CEP
VanDenburg Financial and Insurance Services