August 28, 2008
Florence Harmon
Acting Secretary
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-0609
Florence Harmon:
Dear Madam Secretary:
A licensed insurance agent and registered representative, I oppose proposed Rule 151A. Indexed annuities should not be deemed securities. The scope of Rule 151A could also include other annuity and insurance products. I urge you to withdraw the proposal.
Unsuitable or misleading sales practices need to continue to be severely discouraged and sanctioned. But these are not germane in determining the classification of a financial product as a security. The risks to the owners of true indexed annuities are not the investment risks of true securities.
Indexed annuities are insurance products and should continue to be subject to regulation by states, with due attention to concerns raised by the SEC, especially the use of the term "indexed annuity" for a product that might be clearly more than an insurance product because subject to the risks of secuities. The National Association of Insurance and Financial Advisors (NAIFA), of which I am a member, supports the NAIC and state regulators in promulgating the adoption and vigorous enforcement of the NAIC's model regulations on annuity suitability and disclosure. NAIFA recommends the development of standards for indexed annuity product design by state regulators. Unsuitable indexed annuity products should not exist.
SEC must withdraw the proposal of Rule 151A.
You have my sincere thanks for considering my opinion of this matter.
Sincerely,
Denwood B. Parrish