July 24, 2008
Sirs/Madams:
It is my opinion that you are going totally in the wrong direction. There does need to be a way to stop the people in our INSURANCE sales business that are "con artists" selling the equity indexed annuities, but we that understand and explian our products fully, should not be penalized by making the SEC and NASD regulators of these products. I, personnally, make sure that my clients understand all of the nuances of the equity indexed products I sell as well as the risk, that they might not get a return for a year or so, and that the gain may be capped only allowing them a portion of the gain in that year. On the other hand, I was NASD registered at one point (twice, in fact) and defy any registered representative to say that they explain all of the risks, invesment objectives, fees, etc. in a mutual fund, or that they went over the prospetus completely with their customers. I got out of that business because of the risk my clients had and the abuses involved by the mutual fund companies and their sales forces. You would be taking a product that is simple, useful and necessary for all concerned and giving it to people who are already not able to explain their products while taking it away from a large sales force who can. If you must regulate these products I would suggest that you create another designation to be controlled jointly by the insurance commissions of each state and the NASD, and have people test and license under this designation (both insurance agents and NASD Registered Representatives). This may alleviate your problem.
Rick Noerr, LUTCF