September 3, 2008
I am a constituent in the state of California. My livelihood and business as a licensed, independent insurance agent may be greatly impacted by a proposed rule 151A. The request that the SEC is seeking to require that all fixed index annuities become a registered product sold only through a broker-dealer and not by insurance agents, is one that will only benefit the broker dealer and not the client. This rule adds no consumer protections not already provided by state insurance regulations and would in fact undermine my state initiative concerning sales practices. My fear is that these products will no longer be offered to clients because they do not provide the agent (broker) with an ongoing income stream. For the right client they are the perfect program to provide protection and income security in many cases for a lifetime.
These programs are in no way part of the securities business. The assets are not invested in any security. These programs use a market index to set possible interest credit much like banks use the Treasury or Federal Fund rate to set interest rates on CDs and MMA accounts. The insurance carriers provide the benefits and guarantees so why would we want the SEC to regulate programs that they are not involved in drafting nor have a vested interest in future performance.
Thank you for your objective view of this rule.
Stacie Leake