July 24, 2008
This is a comment against the acceptance of the S7-14-08 proposal. I am a licensed life insurance agent. Over the last ten years I have implemented over 1,500 fixed indexed annuities, worth over $75,000,000. No annuity owner has ever filed a complaint. My clients have made money for ten straight years. When the stock market dropped, none of my clients lost any money. I have never lost a client, and I doubt if any registered representative in the country has a better track record. Most of my commission goes towards paying my advertising and office expenses. Should this rule be accepted and I am forced to share my commission with a broker dealer, it will put me out of business.
Every client has expressed the desire to keep their money safe from stock market losses. The industry was born out of the 2000-2002 stock market declines. As a result, most of my clients are over 60-years old and withdrawing money to supplement their social security benefits. The safety of a traditional fixed annuity does not offer the potential of stock market-linked returns, and I have clients who have earned over 25-39% in one year.
Harry S. Dent, Jr., nationally recognized economist forecasts the next great depression (2009-2023). If he is right, none of my clients will be at risk. They will never lose any money. Their money will be safe and sound earning the minimum guaranteed fixed interest rate. I do not recommend guaranteed lifetime income riders because these riders were never intended for a fifteen year depression. If this rule is implemented, there will be massive life insurance company failures. No variable annuity or fixed indexed annuity company has published adequate reserves to cover the rider risks. Recommend investigating guaranteed lifetime income riders.