From: Anonymous
Sent: Tuesday, August 15, 2006 3:52 PM
To: Rule-Comments
Subject: SR-NASD-2004-183

I am a licensed insurance professional and variable product salesperson. Although sale of variable products is a small part of my business, I am concerned about the suitability standard and principal review requirements pertaining to the sale of variable annuities contained in NASD proposed Rule 2821. The proposed rule's requirements are redundant, unnecessary, will provide no meaningful additional protection to consumers and will negatively impact this area of business. As it stands now, I am very reluctant to sell variable products because the excessive regulations makes it nerve racking for fear of sanctions etc. I urge the SEC to disapprove the proposal.

I strongly believe people who engage in misleading sales practices should be aggressively prosecuted and sanctioned appropriately. However, the NASD 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. Insstead of passing new and redundant legislation, to protect consumers, regulators should focus on appropriate enforcement of the existing suitability rule.

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 that was available to me).

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