August 27, 2008
I believe this product line should not be regulated by the SEC. It is an insurance product. By definition, the insurance company is carrying the risk of delivering the benefit.
The insurance company is also carrying the risk for all riders; guaranteeing benefits not tied to interest rate performance.
Unlike regulated products, where the investor bears the performance risk, FIA's transfer that risk to the insurance company.
This, to me, is the seminal difference between FIA's and regulated product.
On another note, I wonder why there is an effort to regulate a product that has had far fewer complaints than the securities industry, and to date, no one has lost any money?
I'd suggest the SEC get the regulated products under control and compliant before they take on additional responsbility.
Thank You;
Phillip Scheiber
President, SR Insurance Services, LLC