July 18, 2008
I am commenting on the subject of Indexed Annuities.
I do not believe that they are securities and the SEC should have no jurisdiction/control over them. The State Commissioners of Insurance are the proper and appropriate governmental agencies to oversee this product and protect the interests of the public.
In this case, we must always keep in mind that interest is simply being credited to the principal which is not subject to "market risk". The percentage of interest may be coming from a benchmark that involves the performance of stocks, but that does not subject the public's principal to risk which stocks do. That is key, the public's principal is protected from "market risk", so we certainly do not need the SEC to step in and protect the public's principal from "market risk" again - once is enough. The Commissioners of Insurance have been overseeing and protecting the public's interest in these very matters very well and to suggest otherwise which this type of legislation does is to cast a huge shadow of doubt on the operation of the Commissioners of Insurance and, in fact, questions their very competence.
Don't fix what isn't broken The SEC has its hands full already and shouldn't be looking for more work it shouldn't do. Perhaps a more fruitful use of the SEC would be to more closely oversee and monitor the securitization of mortgages which has been the cause of great turmoil and distress to the public. Priorities, priorities, priorities