August 20, 2008
To whom it may concern,
I really think that before the SEC and FINRA say that they can oversee and be sure that the Agent is selling annuities properly to prospective clients, they should police their own Registered Representatives since some of them are selling products that should not be sold to certain clients.
However, I do agree that insurance companies needed to put in place a Suitability procedures which will be sure that agents are selling the correct product to a consumer and that they are presenting it correctly, and I feel that insurance companies have made some very big strides in correcting the situation. They already meet or exceed the federal requirements.
Fixed Index Annuity is a Fixed Annuity. What makes it a fixed annuity is the guarantees, to say it is a security would be saying that there are no guarantees. When a Fixed index or deferred annuity is purchased it is purchased because of the guarantees, the same reason people purchase CD's. Market fluctuations do not directly impact a purchaser of a Fixed Index Annuity. The Negative investment risk to a purchaser is eliminated entirely.
Today there are no FEES, or COST to the purchaser of a Fixed Index Annuity, when the SEC controls this product there will be fees added which will reduce the value of the Fixed Index annuity to the purchaser.
The economic impact will cause a negative effect that will exceed $100 million to small agencies within the insurance industry around the country. This violates the Small Business Regulatory Enforcement Fairness Act of 1996. The economic impact on the Independent agent is also very big, and will affect their livelihood.
Lets be honest.. it really is about MONEY... yes there are some presentation that need to be corrected, cleaned up, and changed, but the real issue is that large amounts of money has transferred from Securities to Insurance Companies, and the Securities Exchange Commissions is not happy about that. I don't think that the SEC is any more concern about the people/prospects then the Insurance companies in fact I am sure that the insurance Companies are more concern about providing a quality product to the consumer.
This Ruling should not pass I think the insurance companies are more the capable in policing agents to be sure that this product is sold correctly. An they have proven that they provide products that are safe and a consumer will not ever lose their principal. Thus, a Fix, Guaranteed, insurance product.
Richard A. Mangiameli, LUTCF, FCC
Independent Agent
VP of a small insurance agency
Ipln4u@yahoo.com