October 21, 2008
I think equity indexed annuities are difficult for most people to understand, and anyone selling them should have the proper training and knowledge that being a Series 7 broker can provide.
I personally have seen MANY people who have purchased these products, and did not at all understand them, nor the LONG surrender periods, steep surrender fees, and other provisions these contracts often have. I don't think they are being explained correctly, nor should advice be given by someone who is not Series 7 licensed on investments which are marketed and sold as "a safe way for the annuity owner to participate in the upside growth of the stock market without any of the downside risk".
I recommend that Rule 151-A be approved, and that these EQUITY indexed annuities be considered a registered SECURITY.
Thank you.