August 7, 2008
RE: File No. S7-14-08
Indexed Annuities and Certain Other Insurance Contracts
I am strongly against making any changes requiring additional licencing requirements for insurance agents to market equity indexed products. I believe that the proposed changes will not materially affect the actions of a few renegade agents who will take advantage of clients. If your proposed changes are adopted, there is no guarantee that these same agents will not continue to do their dirty work until and if they are caught. Civil remedies are available to clients who have been damaged by these agents.
Equity Indexed products should not be singled out as they are tied to a market index. Given the logical extreme, CD's and home mortgages tied to market indexes or bond indexes should also come under the scope of the SEC. State insurance commissions have the ability to police the field and have done a very good job of taking corrective action when problems have been called to their attention.
As an agent, I am not afraid of having to obtain a security license to market indexed products (I had three in the past). I object to the time spent studying for and taking tests for products I would never market (mutual funds), the extreme costs of classes and the tests, the costs of renewals, and the overkill of documentation and requirement of government personnel to come into my home (where my office is located) to inspect my files. I also object to the evasion of my privacy in having to disclose to my broker dealer (if licensing is required) personal information about my family finances as an index product does not give me or my collegues substantial financial gain by recommending the purchase or sale of a particular index in favor of a fixed or other indexed position.
Yes senior citizens must be protected. Many industries have problems with senior citizens being duped by flim flam artists. Thity year mortages have been given to people in their 70's as have car loans to people in their 70's pr 80's. The solution is not more regulation, but enforcement of existing regulation and civil remedies.
File No. S7-14-08
Indexed Annuities and Certain Other Insurance Contracts is not a good proposal. It will not stop the ruthless flim flam artists in our industry, it will only hurt the honest, hardworking insurance agents who work diligently to protect the interests of their clients while earining a living by operating their small business.