October 22, 2008
I have read most of 151A and read several commentaries and it is my opinion that having another regulatory body involved in the insurance business would not be in the best interests of anyone except broker-dealers and the SEC.
Indexed annuities are fixed with many guarantees so that a policy holder is guaranteed not to lose money in any particular year and with minimum policy guarantees will be guaranteed with a small gain at worst by the end of the policy guaranteed period. Fixed index annuities are a conservative investment which do not carry the risks that variable annuities do. If the products are being misused by some bad apples in the business then the state insurance departments need to address this. It is my experience that insurance agents, as a whole, are far more concerned about their prospect's best interest and providing a product not with concern for which company pays the highest commission. This is not my experience with securities brokers. The SEC has done such a poor job regulating the securities business I would have no confidence that they would be able to properly regulate anything in the insurance business. The current financial fiasco is an indictment against all regulating bodies except possibly the state insurance departments. Adding more regulation and fees will only serve to discourage insurance agents from offering indexed annuities. The broker-dealers will have purged a very useful product from the landscape. The SEC will then be able to claim victory and go after all other insurance products. I would hope that the SEC would seek to do a better job in regulating the equities business and not seek other venues to conquer. Thank you for the opportunity to comment.