July 2, 2008
Your proposal to regulate annuites as a security should not be approved. There is no reason to regulate these products as they are not securities no matter how you rationalize the reasons. My father had stocks and two annuities. He lost almost all his stocks and no one was there to return his money. His two annuities never lost a penny and this is what allowed him to live the remainder of his life in safety and peace up until the day he passed away. IWithout these annuities he would not have enough income to live without going into debt.
I strongly recommend that you leave these products alone and let the state and insurance companies continue regulating these products with the suitability forms and rules all ready in place.
I would be more concerned about stocks and mutual funds. Explain to me how my 67 year old aunt lost $ 111,000 in the stock market since January 2008 before she pulled out her money. If she would have left the remainder of her money in the market as of July 3, 2008 she would have lost another $ 60,000.00. Who is going to return any of her losses? No one. When we talked to the Broker she was told to leave it in there and that it would come back. At 67 she would have to realize 60%+ in gains over the next 6 to 8 years just to break even and that does not account for inflation. So until then where does her living income come from.
I would be more concerned about the stock market, after hour trading, hedge funds, ETF's and idiots of the world that have computer seminares that sell these programs to consumers who lose thousands of dollars of their money because they do not really understand what they are doing.
I recommend that you do not regulate annuities.
Sincerely,
Jack Kusch