Subject: File No. S7-14-08
From: Gerard F Stellwagen, CPA, CFP, CLU

August 12, 2008

Sirs:
I am very much against the SEC's proposal to classify indexed annuities as securities. They are clearly distinguishable from securities in that the owner cannot lose principal (except for surrender charges). In fact, they are similar to CDs, some of which are linked to market indices.

All this will do, in my opinion, is to make it more expensive to bring these products to market. Who will bear that cost? You know it will be the consumer.

I have sold only a few indexed annuities. I did so because they were the most appropriate products for the clients. The SEC's reclassification will only make it more difficult for me to make these products available to my clients.

The TV show ("Tricks of the Trade") was a hoax. Clearly it was staged and presented in the most vicious light possible. I can't believe that there were no scenarios (edited out, no doubt) where the agent said: "I don't think this is suitable for you," as I have done many times. For regulators to rely on this kind of sensationalism is disingenuous.

The insurance industry is doing a good job of regulating these products.