On June 25, the Securities and Exchange Commission passed a proposal for Rule 151A, which would treat certain index annuities as securities. The action has created a rumble across the industry, as equity index annuities (EIAs) in particular have been coming under fire for the past couple of years. Industry players have warned this day would come, the day when annuity agents could be subject to federal sales practice, disclosure, and licensing laws.
Nobody yet knows all the implications of or the potential fallout from this proposal. Carriers and awareness groups, however, are mobilizing against the idea, with one producer calling it "the 21st century financial-services equivalent of inviting Vandals and Visigoths to a tea party."
The public has until Sept. 10 to submit comments on the proposal; the SEC has already gathered more than 100 responses on its Web site, www.sec.gov.
Some, like James Herbst, express confusion over the very idea that IAs would be considered securities.
"The worst case for a client is that they will get no growth in a year," Herbst writes. "NEVER AND I MEAN NEVER does the client's money even come close to being directly invested in the market. These are not even close to variable annuities or securities, which have a GREAT potential for loss, and for some reason they often get put into the same category."
Willard H. Colson, Jr., president and CEO of a broker/dealer and insurance agency, concedes that there are many marketing abuses surrounding index annuities but that they are a viable product if properly disclosed.
And Carol Dunderdale appeals the SEC to "reject this proposed Rule 151A for the benefit of millions of Americans desiring a safe and guaranteed option for their money, for the tens of thousands of small-entity insurance professionals who will be impaired if it is adopted, and for the purchasers of fixed index annuities, who deserve a robust local regulatory authority to rapidly resolve their complaints."
Do you have an opinion of your own on the matter? The Agent's Sales Journal is hosting a forum at www.AgentsSalesJournal.com/151A, along with a growing page of news links and resources for producers looking for more information on the proposal. Register today and log in to learn more and share your experiences with index annuities and your thoughts on the recent SEC proposal.
Benefits Selling Guide
The producer selling group benefits faces a unique set of circumstances. In most cases, they're not simply selling life or health -- they're offering a package of benefits for the employer client to purchase and, in turn, offer to their employees. But with the economy suffering from a downward spiral, many companies are looking to cut their costs.
Unfortunately for you, benefits may be the first to get the axe. Life and health are somewhat expected, but voluntary benefits such as short and long-term disability and long term care insurance could get short shrift.
It's your responsibility, then, to show employers how your package can benefit employees -- and the 2008 Benefits Selling Guide helps you do that and more. With the results of the second annual Benefits Market Study, articles on regulatory proposals and pitching to HR executives will help you sell everything from health savings accounts to term life.
Spotlight on mentoring
Joe Dimora and Justin Bennett are just two producers who have benefited from a mentoring relationship. As in all professions, learning from others and passing on your skill set can have great rewards. The Agent's Sales Journal offers firsthand accounts from Dimora and Bennett on the power of mentoring, along with 7 tips from an expert on the topic. Learn to find a mentor, what to look for, how to mentor others, and more.
Sincerely,
Christina Pellett
Managing editor
ASJeditor@AgentMediaCorp.com
