October 21, 2008
I am opposed to rule 151A from the SEC.
In my opinion, indexed annuities provide consumers an excellent opportunity to exceed traditional fixed interest rates, but without exposing their principal. In fact, once these indexed annuities receive an "interest credit" they can not be reduced - regardless of the performance of the market. Based on this, I believe that indexed annuities are very different from traditional securities products. And, as a result, should not be governed by the SEC.
I also believe that rule 151A would create consumer compromise and eliminate healthy competition in the financial market place. This legislation would immediately reduce the number of producers able to offer indexed annuities, and would force many middle-class American's to find a new "advisor" to purchase an indexed annuity. This would require consumers to go outside the strong relationships they may have in place with their local insurance agent to purchase this product. So, in essence, the legislation would require many people to purchase an indexed annuity from someone they may not know and/or trust. And in today's economy, I don't believe that's in the best interest of consumers. In addition, healthy competition would be immediately reduced due to the licensing requirements. And I'm not sure how either of those things helps consumers.
As a result, I am opposed to rule 151A and would hope that the SEC (and other regulators) would reconsider their opinion on this legislation. There are too many other areas the SEC should focus on right now to help our economy recover from this crisis.