September 5, 2008
I strongly support classifying Fixed Indexed Annuities as registered securities. Insurance salesmen commonly portray these as investments when marketing them to the public. The owners of these equity indexed annuities are taking risks that they do not understand and which are not fully disclosed to them. The high commissions on these products tempt otherwise honest salesmen to highlight the positive and ignore the negatives of these products. State Insurance suitability laws regarding Indexed Annuities are inadequate to protect the public. Abusive and dishonest sales practices are actively promoted by the marketing organizations and agents representing the companies that issue Indexed Annuities. In fighting this, the insurance industry is scaring its salespeople about the negative economic impact to small agencies within the insurance industry if Equity Indexed Annuities are classified as registered securities. What we really should be concerned about is the positive economic impact to the public that will result in better regulation of these products and the sales tactics to promote them.