August 2008 Archives
Introducing the Certified Index Specialist designation
In this episode we visit with John Scheer from Indexed Product Specialist and learn about the new Certified Index Specialist designation and coursework. With the entire industry focused on indexed products, we discuss the most comprehensive and in-depth training and education program available for indexed insurance products. (10:00)
Protect Your Liberties—Your Action Needed Now
Regardless of where you stand on the political spectrum, the SEC is attempting to usurp your right to conduct indexed annuity business with the introduction of proposed SEC Rule 151A. AMZ Financial strongly and vehemently opposes this rule as more unnecessary regulation which further complicates the issues revolving around indexed annuities.
Though the SEC acts independently and can adopt rules without Congressional approval, Congress has considerable influence with the SEC. To protect your right to sell indexed annuities, we need you to contact your U.S. Senators and Representative immediately.
Your contact with your elected official should be brief, respectful and to the point. It is critical that you request your elected officials to do whatever they can in their capacity to stop this draft regulation from becoming law - or at least allow more time for closer review. Let your Senators and Representative know that you personally would appreciate them or their offices contacting Chairman Cox, the SEC Commissioners, and the members of the Senate Banking/House Financial Services Committees to express these concerns.
Here are talking points you can use in expressing your concerns.
- Fixed Indexed Annuity (FIA) products are already heavily regulated by state insurance departments. Through the National Association of Insurance Commissioners (NAIC), state regulators have worked hard over many years to come up with appropriate suitability and disclosure requirements for FIA products. To the credit of state insurance regulators, this work continues today and should not be derailed by the SEC’s unilateral action.
- Proposed Rule 151A is ill-conceived. Many securities lawyers find the SEC proposal to be confusing and completely unsupported by judicial precedents on what constitutes an “annuity” exempt from securities laws. Beyond that, it defies common sense that a product which has no market-related downside risk should be considered a security in the same manner as mutual funds or variable products where investors truly bear risk for market losses. Many observers think the SEC’s proposed regulation - if adopted - is a slippery slope towards reclassifying many other annuity products as securities. This seems at odds with Congressional intent.
- The SEC’s draft regulation (Rule 151A) adds an unnecessary layer of securities regulation to this insurance product. Rule 151A would turn most FIA products - as well as more non-indexed traditional fixed annuities -- into securities. This development would subject them to an unnecessary layer of securities regulation. This will have far-reaching consequences by disrupting the manner in which these products are sold today, causing confusion over the differences between insurance versus securities, and ultimately providing little additional consumer protection at tremendous cost to companies, agents, and ultimately consumers.
- Criticisms of FIAs have been exaggerated and market abuses have been largely corrected. Needless to say, there are abuses in the marketing of all financial products including many that are already regulated by the SEC. The fact is the FIA market has grown rapidly because there is a demand for these products and generally consumers have been pleased with the results. While there have been some inappropriate sales (as with any product) those concerns have been largely addressed by new regulations and evolution of products themselves which today generally have lower surrender charges and shorter surrender periods. FIA products and the FIA marketplace will continue to evolve to meet customer needs despite efforts by critics to paint the entire industry with one brush.
- While millions of Americans suffered financial losses as a result of a twenty percent plunge in the stock market, FIA holders have not lost a penny in retirement savings because of this market turmoil. FIA holders have peace of mind that market fluctuations do not adversely affect their retirement savings.
- The SEC proposal has not been appropriately vetted for comment - and appears to be being rushed to adoption. With virtually no forewarning, the SEC unveiled this proposal on June 25th and has allowed for comments only until September 10th. This means a proposal with profound effects on the insurance industry could become law within just a couple months even though agents and insurers have had minimal opportunity to evaluate, comment, and possibly offer alternative approaches to address any valid concerns. This sudden action comes ten years after the SEC first identified this very issue that was then left dormant as the FIA market grew and evolved over many years. Fair play demands that a proposal of this magnitude not be rushed or adopted hastily.
More Training and Education Needed
At AMZ Financial, we believe that this attack comes due to a lack of training and education programs on indexed products. “If more producers took the time to learn all the ins-and-outs of indexed products, they’d be armed with knowledge, and that’s powerful,” said Allie Miller, CEO of AMZ Financial. “One company that we are very closely aligned with is Indexed Products Specialists (IPS), an insurance education and consulting firm.” IPS, in conjunction with RegEd, a leader in online continuing education, has developed a three part training program focused entirely on how indexed products are built, marketed and sold. These courses delve deep into the products and give a producer the foundation they need and the education they desire. Learn more about IPS.