From: Anonymous
Sent: Tuesday, August 15, 2006 3:54 PM
To: Rule-Comments
Subject: SR-NASD-2004-183

As a licensed insurance professional and registered principal and representative, I suppose you can also say that I am also a variable product salesperson. I am writing in regards to suitability standards and principal review requirements that pertain to the sale of variable annuities contained in NASD proposed Rule 2821. While the latest NASD proposal includes several amendments made to earlier versions of the proposal, I personally find the proposed rule's requirements redundant, unnecessary, and providing no meaningful additional protection to consumers. At the same time, I believe this requirement will adversely impact my business. Because of these reasons, I urge the SEC to disapprove the proposal.

It is in my best interest and the interest of the people I serve to support the aggressive prosecution and appropriate sanctions levied against those people who engage in misleading sales practices. At the same time, The NASD has failed to adequately justify the need for this proposed rule. To the contrary, the available data fails to support the NASD's claims that the level of sales problems in the variable annuity marketplace calls for the adoption of the proposed rule. Unsuitable variable annuity sales made up less than .50 percent of the NASD's disciplinary actions over the last five years, and complaints about mutual funds and individual securities far outnumber those concerning variable annuities. Furthermore, the vast majority of the comments received by the NASD and SEC regarding the proposal opposed the new rule, and the NASD has not adequately responded to the concerns raised by the vast majority of commentators.

Furthermore, proposed Rule 2821 duplicates current supervision and suitability requirements that are already in place. NASD rules (including Rule 2310) already contain suitability requirements that apply to all sales of securities, including variable annuities. If regulators really want to protect consumers, appropriate enforcement of the existing suitability rule rather than adopting a new rule is the answer.

In addition, the requirement for review by a principal found in the proposed rule deviates in several significant ways from the general supervision requirements found in Rule 3010. This requirement appears to present a bias against these products, and will lead to constant second guessing of my advice and recommendations (based upon less first hand information than was available to me).

The NASD proposal is a solution in search of a problem that could ultimately harm consumers by making these products less available to people who could benefit from them. For these reasons, I urge the SEC to disapprove NASD proposed Rule 2821. Thank you for your consideration of my views on this matter.