September 4, 2008
I have been in the life insurance business for over 36 years and have held a securities license for 22 years.I AM STRONGLY OPPOSED TO THE PROPOSAL THAT FIXED INDEX ANNUITIES BE TREATED AS A SECURITY. FIA's NOT ONLY HAVE A GUARANTEE OF NO LOSS OF PRINCIPAL REGARDLESS OF WHAT THE STOCK MARKET DOES, BUT ALSO LOCK IN ANY GAINS IN YEARS OF GAINS. IN ADDITION,FIA's OFFER LIFETIME INCOME OPTIONS. MANY OF MY CLIENTS ARE AT THE AGE THAT THEY DON'T WANT THE RISKS OF LOSS THAT GO WITH STOCKS AND MUTUAL FUNDS,BUT THEY DO LIKE THE POTENTIAL FOR A RATE OF RETURN HIGHER THAN A CD OR FIXED GUARANTEED RATE. THIS HAS BEEN ESPECIALLY TRUE WITH THE RECENT VOLATILITY OF THE STOCK MARKET.
I AM ONE OF THE MANY SECURITIES LICENSE HOLDERS WHO HAS RESIGNED FROM HIS BROKER-DEALER DUE TO ALL THE RERGULATION AND RED TAPE. WITH ONLY ABOUT 1/10TH% COMPLAINTS FILED REGARDING FIA's I SUBMIT THAT IS A WHOLE LOT LOWER COMPLAINT LEVEL THAN WITH ALL THE SECURITIES FRAUD THAT THE SEC HAS NOT PREVENTED IN THE PAST. ADDITIO9NAL SEC REGULATION OF FIA's WOULD RESULT IN LOWER RETURNS TO THE CLIENT DUE TO INCREASED FORMS AND COMPLIANCE AND WITH NO BENEFIT TO THE CLIENTS. IT WOULD IMPOSE MAJOR HARDSHIP ON THE INSURANCE COMPANIES DUE TO FORMS, ADMINISTRATION, COMPLIANCE, AFFILIATION WITH BROKER-DEALERS, AND LICENSING OF AGENTS. IT ALSO WOULD IMPOSE AN UNNECESSARY AND COSTLY BURDEN ON ALL AGENTS WHO WOULD HAVE TO OBTAIN AND MAINTAIN A SECURITIES LICENSE AND DON'T WISH TO SELL STOCKS OR MUTUAL FUNDS.
THE STATES AND INSWURANCE COMPANIES ARE ALREADY POSITIONED AND TAKING THE STEPS NECESSARY TO PROTECT THE PUBLIC WITH SUITABILITY FORMS AND REGULATIONS. THE SEC WOULD NOT DO A BETTER JOB AND WOULD CREATE UNNECESSARY OBSTACLES TO THE CHOICES OF THE PEOPLE FOR THEIR SAVINGS OPTIONS.
Sincerely,
Willis E. Middlemiss,CLU