From: C. Wilkins
Sent: August 15, 2006
Subject: File No. SR-NASD-2004-183

How does the NASD feel about Variable Annuities? Living Benefit's consumer oriented product line or National distrust? you decide... How does the NASD feel about Variable Annuities? THE REGULATORY VIEWPOINT 2006

[ Elisse B. Walter, senior executive vice president of regulatory policy and programs at the NASD, says that her organization isn't against Variable Annuities themselves."Our concern is not whether the product is good or bad, but how it is being sold and whether it is appropriate to the people to whom it is being sold,"she says.]

Let's look at this above statement

This above position taken by the NASD is what continues the problems with the Variable Annuity industry because there is no official position taken on suitability and in it's marketing of living benefits to the seniors/retirees that are led to purchase a risk product with a false sense of safety conveyed that somehow their money is really not at risk.

After all any product that uses the word guaranteed as many times as in the Variable Annuity Presentation sale certainly must not be of any risk to any consumer.

I disagree with the above NASD statement and their broad position that it's not a question of whether the product is good or bad? What is considered real compliance with the National Association of Securities Dealers? Only that their products offered are OK ?

IT'S NOT GOOD AS CURRENTLY DESIGNED PEOPLE ARE MISLED BY THE USE OF THE WORD GUARANTEED IN A RISK PRODUCT...{ It's not the product but how it's being sold and to whom } Is this for real? Is this then being Compliant ?

It's a product by current design that in itself mis-leads.The word guaranteed is a word that should never be allowed to be expressed with a risk product. It conveys some type of assurance that's it's OK for you to buy this product and if this that or any other thing occurs you will be all right !

These problems will never go away because of this"misuse of the meaning guaranteed in a risk product." Is this suitability? Is this being compliant? Is this a commingle of product designs and definitions?

Does the NASD rules send out mixed signals? Are they now a regulator of ambitiousness? Are their rules an exercise in contradictions? Why all the problems? Is this type of risk confusion that they allowed in the Variable Annuity now reached a point beyond their regulatory control?

This extra fee layer that you can buy back part of your loss/risk should not be allowed to be used in any same/similar manner as the word is used in a real guaranteed from loss product. The only real guarantee is that you will have to pay fees...

It tends to convey total safety from any real market loss when in reality there is none and then again tries to change this risk product the Variable Annuity by design and definition into a thing that it's not.

Real product risk should be highlighted not hidden in design that can create this false sense of safety for a product that has direct exposure to the market and it's real potential of loss for any purchaser let alone a senior or retiree.

Unacceptable meaning in product design definition is the real issue folks.

Once again the recent March 2006 decision expressed by the NASD that it's OK for you to exchange you Variable Annuity for another because of better living benefits. Is this their idea of being in Compliance?

Then they get upset with product being offered that by design avoid principal loss and risk attack them as competition when in reality they are the ones who have decided to allow a [ commingle of two different product worlds ]{guaranteed from loss products vs risk products with so called "living benefits"} & actually wonder why all so many complaint's still abound.[ Jump Ball vs Ping Pong Ball ] The Index Annuity vs the Variable Annuity.

The NASD refers to a Index Annuity as a "jump ball product" this is a term that should have applied to their"new Variable Annuity with living benefits" allowing to make a risk product into something it is not....a pretend to jump from risk to no risk with a introduction of the the word guaranteed in a risk product.

I'm really not sure the NASD does understand any real product difference.

Their boss had said Index Annuities are just too complicated to understand ! so based on these type of comments they just not might understand any real product difference between a true guaranteed "from loss product compared to the Variable Annuity with living benefits?"It could be rethinking time for the Annuity basics for the higher ranks instead of attack misdirect and then attack some more. NAIFA Action Alert Ask NASD to Back Off on Equity Indexed Annuities

The accreditation method of Index Annuities is not the real issue as the NASD would like you to believe although it does have many methods to reflect your potential for gain without risk to principal. It's not so difficult or confusing that almost 27 billion a year are marketed within this safe product.

These different accreditation methods offer great selection choices for the consumer.This is what's known also as fair market competition between one product or Annuity carrier with another.Just as in any case not all of the safe Index Annuity products are suitable for each and every clients needs.This is why the Index Annuity is offered in different accreditation methods and also different time spans of involvement.

The Variable Annuity has direct exposure to market risks where as the Index Annuity uses market performance as a external guide only an without direct exposure to the markets and your principal is not a risk.

The NASD representative your Variable Annuity writer dodges a suitability bullet by marketing the Living Benefits in bulk to their consumer then takes a position that because of the guaranteed living benefits all suitability issues have been resolved is this safe thinking? for the senior and retired concerns?

Living benefits are a"misrepresentation in risk reality"created to increase fees and misleading guarantees that allow the misuse of the word guaranteed that serves only to create an illusion that you are not in a risk product at all.

Guaranteed Minimum Withdrawal Benefits GMWB Guaranteed Minimum Income Benefit GMIB.Guaranteed Minimum Accumulation Benefit GMAB Guaranteed Minimum Death Benefits GMDB. I could go on and on. These fee based riders are designed to increase the cost of risk products yet "pound into the buyer is the word guaranteed" leaving them then think that by the conclusion of the sale process"their money is not really at any risk at all" but actually is guaranteed from any market loss.

Why is there still so many complaints/ fines is it because of the guarantees that don't? and why do they call these living benefits when death is required to collect on sum? If this were my retirement money I'm not so sure I would like to die or wait the remainder of my life to get back just what was put in..

Do they want to keep [ all retirement dollars at risk in retirement? ] I don't think this type thinking really meets the Principles and Code of Ethical Market Conduct ?

State regulators can not really regulate security products already a tilt in fairness has been created against the fixed/index annuity industry.

Once it allowed this word "guaranteed" to be bounced around the room in a Variable Annuity presentation without prejudice and any avoidance as much as any ping pong ball knowing all too well that any misuse of this word in any sale presentation for any risk product is all to easy to lead into the many misunderstandings that can be created for any age bracket.

This should not be allowed to happen when dealing with any ones retirement savings.

The"living benefits"might have saved the Variable Annuity industry but at what cost?

Never has any product generated so much national public distrust it really abounds but the NASD taken in a fortune in fines. They have allowed this problem to continue and are the only ones who can resolve it. Take away the NASD ability to profit from fines and objectivity might return to the issues at hand.

Does the Variable Annuity Industry today reflect National Distrust? 464,000 pages in just one browser below but it's the Index Annuity that they want to take the heat! Why is that..........

Has any risk product generated so much in fines for the NASD?? Do you think the misuse of the word & meaning for guaranteed product has created this problem?? At the rate the "NASD fines everyone" you would thing that they only have total idiots to market this risk product amazing.

I don't believe that at all but what is very obvious the NASD has found a good thing with Variable Annuities in more ways then one. Some how the words regulating and or orchestrating have seem to create these not so impressive results that have been achieved here. [ 464,000 pages of complaint issues ] on just one browser.

Variable Annuity Complaints Results 1 - 10 of about 464,000 for Variable Annuity Complaints. (0.16 seconds)

NASD Should You Exchange Your Variable Annuity?

(Updated March 2, 2006) is this for real?

There are various reasons why a variable annuity contract holder may want to exchange an existing variable annuity contract.These are all valid reasons for considering exchanging one insurance contract for another.