August 27, 2008
Florence Harmon
Acting Secretary
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-0609
Florence Harmon:
I am a licensed insurance and investment professional, doing business primarily in the state of Idaho. While I have sold indexed annuities(IA) in the past, my primary business is in the securities area. I believe there are certain client situations that require using indexed annuities, however, for the most part, clients prefer the diversification and other features of the variable annuities now available for sale.
I see no reason to classify IA as securities now. They are guaranteed by one insuring company. The rules and regulations covering their sale are adequately overseen by state insurance departments. Therefore, I do not support the adoption of proposed Rule 151A.
If they were classified as securities, government has the inclination to try to apply such rules to other products, which also do not need to be included under 151A. Let's not get into over regulation when there is no need to do so. Let the state insurance departments do their jobs.
The professional organization I belong to, the National Association of Insurance and Financial Advisors, is committed to working with the NAIC and state insurance commissioners towards the goal of having every state adopt and vigorously enforce the NAIC's model regulations on annuity suitability and disclosure. I also support NAIFA's recommendation that a state regulatory body be designated to develop standards for indexed annuity product design, such as limiting the surrender period and surrender charges for such IA, so that inappropriate indexed annuity products would be prevented from reaching the marketplace.
For these reasons, I urge the SEC to withdraw the proposed rule. Please take my comments into account when making your decision.
Sincerely,
Lance D. Perkins, CFP, LUTCF