August 4, 2008
Your proposed regulation to require securities licensing to sell "fixed" products with the reasoning that the consumer needs to be protected is another example of big brother knowing more about every situation than anyone else.
Please justify your actions with the complaints about fixed indexed annuities and the volumne sold as compared to variable annuities. You have the BD's supervising the sale and compliance of that varaible financial instrument, and rightly so, yet look at the misrepresentations being made every day by the securities licensed reps concerning the gurarnteed income riders. Even though you have control of this product it is being mis-represented every day as a guarantee of principle. Your regulations have not changed the actions of the few securities licensed bad apples out there and this recommendation will not solve anything on the fixed side either.
This proposel to require securities licenses to sell a fixed indexed annuity will result in the consumer having fewer choices being offered because of the tunnel vision of securities licensed reps and their attitude to fixed instruments.This will hurt the consumer, the industry and many good honest agents. If the consumer wants true safety from the negatives of the market, is it not their right to make the decision not to buy an equity based product? Will the client get that kind of direction fron a "variable" agent, or will the client be sold a VA with the "guarantee income rider". I think any honest person that has been in the business very long knows the response to that.
This is a serious over reaction that smacks of big government stepping on the freedoms we thought we had.
Any precieved compliance problem you might think you see can and is being handled very well by the suppliers in the industry. To require a securities licence to sell fixed indexed annuities is like using the atomic bomb to curb a local neighborhood squirt gun water fight.