October 22, 2008
I am writing to express my grave concern over the SEC proposal to classify Indexed Annutities as a security. Annuities (other than variable) are and have always been legitimate way of accumulation, tax deferral and lifetime income if needed. Equity Indexed Annuities do participate with various indexes that enable an annuitant to possibly increase his value at a faster rate than a fixed annuity, but functioning the same way as a variable annuity where the annuitant is subject to market risk that could deplete principal is not the same and should not be classified the same as a transaction where there is potentail loss of principal like a security.
Please resist this over regulation of an industry that is capable of reining in abuses and misleading sales practices by some and concentrate on the recent areas of concern in the unregulated financial markets i.e. hedge funds, derivatives and other complex financial instruments being traded today.