From: Raymond E. Moore
To: Rule Comments
Sent:July 12, 2006
Subject:File Number SR-NASD-2004-183

While I agree in principle with the position of NAIFA so eloquently phrased in the following paragraphs, I disagree with their stance on indexed annuity products. I feel the NASD and the SEC should not be imposing additional suitability rules on the sale of Variable Annuities, but rather should work to halt the abusive practices I have seen in the sale of indexed annuities sold by unregistered persons. I have witnessed countless examples of misleading advertisements, seminars and sale presentations, many preying on the fears of and made to elderly prospects. While I know NAIFA disagrees, I believe these products must be classified as securities and subject to the same registration, licensing and suitability rules of variable annuities. While I have been a member of NAIFA for over 20 years, am a life and qualifying member of MDRT, and have been in the insurance and financial services business for more than 30 years, I know that the insurance industry will not police itself and take the steps necessary to shut down these abusive sales practices. The SEC and NASD are the only regulatory bodies capable of doing so. Please, back off the idea of making it more difficult for ethical advisors to do a good job for their clients, and spend your time cleaning up the indexed annuity business. This will protect more seniors and annuity purchasers of all ages than any other action you could take.

I am writing to you concerning the suitability standard and principal review requirements pertaining to the sale of variable annuities contained in NASD proposed Rule 2821. Although the latest NASD proposal includes several amendments made to earlier versions of the proposal, the proposed rule's requirements are redundant, unnecessary, will provide no meaningful additional protection to consumers and will adversely impact my business. I urge the SEC to disapprove the proposal.

I firmly believe people who engage in misleading sales practices should be aggressively prosecuted and subject to appropriate sanctions. The NASD, however, has failed to adequately justify the need for the proposed rule. To the contrary, the available data does not support the NASD's claims that the level of sales problems in the variable annuity marketplace calls for the adoption of the proposed rule. Unsuitable variable annuity sales made up less than .50 percent of the NASD's disciplinary actions over the last five years, and complaints about mutual funds and individual securities far outnumber those concerning variable annuities. Furthermore, the vast majority of the comments received by the NASD and SEC regarding the proposal opposed the new rule, and the NASD has not adequately responded to the concerns raised by the vast majority of commentators.

Furthermore, proposed Rule 2821 duplicates current supervision and suitability requirements that are already in place. NASD rules (including Rule 2310) already contain suitability requirements that apply to all sales of securities, including variable annuities. If regulators really want to protect consumers, appropriate enforcement of the existing suitability rule rather than adopting a new rule is the answer.

In addition, the requirement for review by a principal found in the proposed rule deviates in several significant ways from the general supervision requirements found in Rule 3010. This requirement appears to present a bias against these products, and will lead to constant second guessing of my advice and recommendations (based upon less first hand information than was available to me).

The NASD proposal is a solution in search of a problem that could ultimately harm consumers by making these products less available to people who could benefit from them. For these reasons, I urge the SEC to disapprove NASD proposed Rule 2821. Thank you for your consideration of my views on this matter.

Sincerely,

Raymond E. Moore, CLU, ChFC, MSFS, CAP President, Registered Principal* Moore Financial Services 567-B Southlake Blvd. Richmond, VA 23236 Phone (804) 379-3212 Fax (804) 379-1469 Toll Free (888) 285-1576 www.moorefinancialservices.com

*Investments and Advisory Services offered through Jefferson Pilot Securities Corporation - Member Boston Stock Exchange, NASD, SIPC.

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