Subject: File No. 4-606
From: DuWayne D Mews, FICF, CSA
Affiliation: NAIFA

July 30, 2010

I served the last 2 years on the Wisconsin OCI annuity suitability committee. We worked together with major insurance carriers, consumer groups, regulators and producers to create model legislation to implement product presale training prior to sales, ethical product recommendations coupled with liquidity standards to protect consumers. Insurance carriers and broker dealers have the reponsibility to supervise agents and registered representatives (RR's). This new model legislation is being adopted by 30 states. We don't need additional regulation.

The registered representatives job is to educate the consumer on subaccounts, fees and conduct reviews with the consumer. The problem is the old passive management coupled with the buy and hold philosophy. Investors that stay with that strategy will see flucation in share values and will only lose money if they liquidate when shares prices are low. It's when they sell low out of fear from bad press is when regulators get contacted. Total complaints based on products sold isn't that high to push a fiduiary standards on to B/D's and R.R's on a products that has no guarantees.

There are other options that RR's can recommend but the B/D needs to make them available. Tactical asset allocation, using ETF's and fixed guaranteed annuities have work well for me to eliminate some of the downside for my clients when markets fall. Using proper liquidity standards allows the investor to stay the course. Mosts B/D won't add those options because it might hurt their cash flow from 12b1 fees that pays for their staff and overhead.