October 21, 2008
After receiving numerous e-mails requesting that I comment on this matter, I believe that now is finally the time to do so. There are many insurance professionals who have become accustomed to selling Equity Indexed Annuities and other equity-linked insurance products who have absolutely no business doing so. Without any formal background in the securities industry or any fundamental understanding of the "Equity Index" portion of the annuity, they sell these products. Their ignorance leads them to making statements which are deceptive in nature--or would be considered deceptive to someone with a securities background who actually understands the nature of the claims made by the salesmen. I believe that these products were created by the insurance industry to better serve their customers, but that non-securities licensed insurance professionals are ill-equipped to sell them.
I believe it is in the best interest of the public that equity-linked products be sold by regulated securities professionals. An insurance license is not enough to understand these products, and an insurance professional without a securities license should not be in a position to sell them.