September 9, 2008
I have been in the insurance business since 1977 and for awhile I was also in the securities business. I held a series 6 and 63 licenses.
Indexed annuities are definitely not securities.
For one and most importantly there is no other security that comes with a guarantee of principle and a guarantee of a stated interest rate. Kind of makes me wonder why they call the securities industry, the "securities industry" being that there is no security in the products sold. IE. stocks, bonds, mutual funds, etf's etc.
My clients choose indexed annuities because they are safe.
They know that they will not get a return based on the market but rather an interest rate based on how the market does as a whole.
It is an INTEREST RATE and that is the point here.
You say you are doing this for the protection of the people, but I seriously doubt that that is the real reason. You and your friends at FINRA are in the business of protecting the Wall Street moguls not the American public. You can watch the action of the markets in general and many individual stocks and know that there is insider trading going on everyday and yet you hardly ever do anything about that because it is the people paying your bills who are guilty of it.
The insurance departments of the individual states are doing a great job at regulating all of us insurance agents and protecting the people of their states from unscrupulous agents. The NAIC has done a great job in providing guidance and there is nothing more that you could do that would add any extra protection for the people. what you will accomplish is in helping the moguls of wall street capture a large per centage of the commissions paid to the agents. Which is what I truely believe is the real reason that you are even considering this action. Local regulation and enforcement is always much more effective than any quasi-governmental national try at the same thing.
Take for example the banking system,(many more banks fail than insurance companies), all the big mortgage banks that have and are now failing (you've done a great job at regulating their products and how they run their businesses.
The insurance industry is fine as it sits, they are the ones where people went to save their farms, homes and businesses during the great depression and have provided secure retirement funds for generations of Americans and they did all this without any national form of regulation.
I highly suggest that you let the states, the NAIC, and the insurance companies themselves regulate the insurance industry. I feel it would be best if you just continued to regulate all the "non-secure" securities and leave the truely guaranteed products to be regulated by someone else.