September 5, 2008
As a practitioner in the insurance industry I would like to comment against this proposed rule on the sale of Fixed Index Annuities. While there may be some sales practices used that are less than forthright, these practices are committed by a small minority of insurance practitioners. The vast majority of us always keep the best interests of our clients foremost in our recommendations. The same can be said of registered representatives. This is not a valid reason to remove the product from the insurance selling community and make it only available from the securities industry.
Perhaps, more importantly, the product provides guarrantees and there is not a market loss associated with the product or to the consumer. Over the past several months while the markets fell, owners of Fixed Index Annuities incurred no loss. This product is not a security.
All insurance products and practices are well regulated by the individual states and all of the companies I am associated with are adamant aboout training, suitability and ethical sales practices. Additional regulation by the SEC and/or the NASD would not add any benefit to the consumer. The only accomplishment of this rule would be to remove the independent insurance agent from the sales process of the index products thereby negatively impacting our livelihoods.
I urge you to abandon the pursuit of this rule.