September 9, 2008
I am writing in support of SEC proposed file number S7-14-08 release number 34-58022 on Indexed Annuities and Certain Other Insurance Contracts.
As a licensed insurance agent, registered representative, registered principal, and manager at a FINRA registered broker dealer I have over 15 years experience and a very deep understanding of product development, due diligance, sales supervision, and management of financial representatives and I feel that the SEC has identified a product that has been at the heart of various product, oversight, suitability, and marketing abuses in recent years. I also agree with the SECs comments that Indexed Annuities are complex financial vehicles that much more closely resemble other investment products such as variable annuities then they do true fixed investments.
I strongly believe that if the proposed rule change is enacted that the consumer will ultimately be the primary beneficiary with more regulatory oversight, more disclosure, better control of sales practices, required suitability determination at the client level, better oversight of financial representatives, and ultimately better and more competitive products.
I have read many of the other comments posted on the SEC website from current financial professionals and insurance companies and I have also received dozens of email blasts from insurance Field Marketing Organizations (FMOs) calling for opposition to the rule change and the vast majority of the ones I have read all have a common theme in that they are think of themselves and not the consumer first. Many of the comments talk about how their (the producers / FMOs) livelihood would be effected if the rule goes through without regard to the current abuses rampant in the indexed annuity market place. I actually received an email blast today from an FMO calling for insurance agents to listen to their conference call so they can save their frikin carrier It is disheartening to see the dozens of fellow financial professionals that are not wiling to look at this issue without putting their own interests first.
None of the comments I have read mention the opportunity these financial professionals have by getting more training through studying to get securities licensed on top of their insurance training which would ultimately increases the ability of the financial professional and gives the end client a better chance at receiving quality service from the industry as a whole. Many of the comments also state that further oversight is not needed because the State insurance departments already have jurisdiction however, anyone who takes a realistic look will find that most State insurance departments lack the budget, training, and personnel to effectively police an issue this large.
When a segment of the financial and insurance industry shows up as a Dateline NBC Special
because of consumers being taken advantage of due to lack of controls and compliance oversight it is well past the time to take action to correct those issues.
I will close be restating that I support the SEC proposal to categorize Indexed Annuities as a security and if anyone from the SEC would like to discuss the matter with me and other senior members of our firm do not hesitate to contact me.
Sincerely,
Anthony S. Bacarella