September 9, 2008
RE: Proposed Rule 151A--SEC regulation of Insurance products
I understand that numerous emails have been received by the SEC from NAIFA members and others citing opposition to the view of NAIFA that proposed rule 151a is indeed NOT good for consumers. This is truly amazing to me, but shows clearly that the average NAIFA member who currently holds a securities license (and is thus one of the most highly regulated individuals in the nation) would much rather use that un-American level of regulation to reduce his competition in the marketplace. Obviously, those apples didn't fall far from the tree of their origin—the SECwho similarly is attempting to use regulatory efforts as a tool to reduce, or at least control, the stiff competition that the insurance industry gives the goods they market and regulate.
Flatly, the insurance industry is doing a better job of protecting their consumers than the SEC is doing protecting theirsor would protect insurance and indexed annuity consumers should they wrongly be given the regulatory authority to do so.
The absolute truth of this terrible proposed rule 151a is that the consumer, who the SEC would have us believe they desire to protect, would in fact be harmed by a reduction of this VERY HEALTHY COMPETITION for the consumers business. Not to mention that the same need for competition exists in the retail sector of the marketplace, although those NAIFA members and other insurance professionals who see these proposed regulations as beneficial (only because it would reduce their competition) don't welcome that competition and would selfishly like to regulate it out of existence. This motivation is clear I submit that 90% of mutual fund owners DO NOT UNDERSTAND HOW THEY WORK (in spite of licensing regs), that they incur undisclosed fees, commissions and other "skimming" and that this fact accounts for more harm to consumers in one year than all the Equity Indexed Annuities combined since their introduction by the insurance industry as an effective solution to the great FAILURE OF THE SEC TO PROTECT THE CONSUMER. If the SEC is not culpable for poor consumer protection, why is there in fact any such thing as undisclosed fees/commissions and fund managers that rake in tremendous profits even while the fund owners lose principal? Shame on you.
If real concern for the consumer is paramount, healthy competition should be encouraged, not regulated out of businessand the current energy spent by the SEC trying to regulate their industrys stiffest competition should be spent curbing the corruption on Wall Street and the hidden fees and expenses that are bilked out of the average securities investor without their knowledge or consent, even while they watch their principal balance lose valuea terrible experience which causes consumers great harm and distress and that Index Annuities prevent (without SEC regulation)
I feel compelled to call attention to the fact that this effort by the SEC reminds me of the actions of the governments of Socialist and Communist countries who follow Marxist ideologies into economic oblivion. This poor understanding of free markets and historical economic success has even been embraced for the first time by a major party's candidate for President of the United States of America and those who don't know any better that support him...and if we don't employ self discipline and historical precedent to resist the temptation to allow wholesale monopolistic over-regulation in this instance, the American people will be materially harmed by the reduction of competition, cost of compliance and encouragement of off-shore competition that does not benefit our Nation or abide by it's stifling regulatory requirements.
Dear SEC: Compete with Equity Indexed Annuities by cleaning up your own act, not by obstructing your competitors. You will never regulate me, so don't force me offshore where I will become even more competitive to your industry than I am as a domestic insurance professional. You forget that some of us don't appreciate being told how, what and when to do what we deem appropriate in our professional lives...much less at great time and monetary expense to ourselves. Life is too short for your concept of good business practices...the insurance industry protects it's clients better with less onerous means.
Thank you, but no thank you very much for rule 151A.
Chuck Foster