July 12, 2008
I support the need for change concering Equity or Fixed Index Annuities, but I do not agree that it should be through the SEC and more specifically Broker/Dealers.
1) Annuties are an insurance product and should be supervised through state Insurance Commissioners.
2) I agree that a "model" product or products should be established. I support the proposed "10 and 10" rule. As I understand the rule an annuity is limited to a 10 year surrender charge period (or less on the older age clients) and a maximum sales charge of 10%.
3) I would support a specific license or required training class to be eligible to market these products. I agree that many of these products have been marketed incorrectly due to limited education of the agent. Putting these products under a Broker/Dealer will not improve the training or supervision.
4) Broker/Dealers are NOT being charitably inclined. They see putting Fixed annuities under them as an enormus revenue source. They are having a difficult time supervising the sale of Variable Annuities. How does adding the addition burden of fixed annuities help?
In summary, I agree some change would be beneficial. Have State Insurance Commissioners establish a model series of plans, review all products to make sure they are within the guidelines, and require agent licensing and training.
Thank you for considering my comments.