November 17, 2008
With the financial crisis that we are currently experiencing, the only stable asset class is annuities both fixed and indexed. How can you even consider making changes to a product which has performed and performed remarkably during a time of crisis.
Even the worst designed EIA sold to the client who probably should not have purchased the annuity at the time they did, is much better off than had they purchased any other product, other than another fixed annuity. They have not lost a dollar. Please compare that to mutual funds, variable annuities, stocks and bonds, there is no comparison.
I sold an indexed annuity in October 1998 and as of this October, it produced an annually compounded return of 4.99%. Compare that to the Dow, the SP, Nasdaq or any other index around, they are flat at best and negative in most situations.
The SEC should have been paying attention to credit swaps and collatorized mortgages obligations which have caused all the problems in the country today. It is time that the efforts of the agency should be placed where the REAL harm is being done. Hint: it is not indexed annuities.
I strongly recommend that you abandon this witch hunt and go after the real problem makers which are not the insurance companies. Go after the Wall Street firms and leave us alone.