Dear: MarketSurge.comNAFA is writing to request that you update your website because the information contained in this article (which is dated September 2014 by the URL) is no longer accurate or relevant. Since it repeatedly references the “NASD” which changed its name in November of 2007 to FINRA, it appears as if MarketSurge.com is merely re-posting old, misleading and incorrect content.    

As all who live in today’s annuity marketplace know:

1. Fixed indexed annuities are no longer considered a “jump ball” by regulators but are decisively and clearly considered an insurance product, like other fixed annuities, regulated by state insurance laws and overseen by state insurance departments. This decision has been confirmed and upheld by the National Association of Insurance Commissioners, the Dodd-Frank Wall Street Reform and Consumer Protection Act (2010 Public Law 111-203), and the United States Court of Appeals for the District of Columbia Circuit.¹
2. With the adoption in 2010 of the revised NAIC Suitability in Annuity Transactions Model Regulation, which has been enacted by 34 states (and counting) and represents about 95% of all fixed indexed annuity production, you are wrong in stating that there are “no uniform standards.”
3. If you read the insurance policy of an indexed fixed annuity and that of a non-indexed fixed annuity you will see that all the contractual elements, with the exception of how interest crediting rates are determined, ARE EXACTLY THE SAME. This includes minimum interest guarantees, the free look period during which you can return the policy, beneficiary designation, guaranteed income statements, etc. As such, the “set of protections” are extremely clear and are the same as with any other fixed annuity.
4. The NAIC Annuity Disclosure Model Regulation (first adopted in 1999 and revised in October 2011) also requires uniformity of disclosure material and requirements regardless of the interest crediting method used by the insurance company. The 2011 revised Model is in the process of being adopted by a number of states. Meanwhile, the current Model, the law of the land in most states, is equally uniform for all fixed annuities.

Also, the NASD (FINRA) Annuity Alert referenced in your article was first issued years ago and has not been updated or changed in all these years (it appears re-posting of outdated information is not limited to MarketSurge.com). Since then, complaints have plummeted to such an extent that neither insurance nor annuity products are mentioned as a concern in the 2014 FINRA Regulatory and Examination Priorities. Instead, FINRA warns investors to be wary of advisors pushing interest-rate-sensitive securities, such as mortgage backed securities and long duration bonds, bond funds and exchange traded funds (ETFs). New research by Dr. Jack Marrion, NAFA’s Director of Research, indicates that of the roughly 6.2 million fixed indexed annuity buyers since 1995 more than 99.976% have not complained. Surely this suggests an extremely high level of customer satisfaction that is unique compared to other financial products. While NAFA applauds the resource information provided at the end of the article, where you make it clear where consumers can go to determine regulatory oversight and licensing status as well as where and how to file a complaint, this clarity, in fact, directly contradicts the statements made throughout the article. Accordingly, an update is warranted. NAFA recommends that you reach out to the NAIC and ask for a free copy of the NAIC Fixed Deferred Annuity Buyer’s Guide. The Guide was updated in 2013, has been approved for state adoption, and is currently being adopted on a state-by-state basis. The information contained in the Guide will help inform you, and therefore your readers, about the questions to ask, the resources available, and how variable and fixed annuities are alike and how they are different. The Guide provides very good and UP-TO-DATE information for Americans preparing for and managing their retirement. Sincerely, Kim O’Brien President & CEO

¹ – American Equity Investment Life Insurance Company v. Securities and Exchange Commission (No. 09-1021, Decided July 21, 2009, reissued July 12, 2010 and consolidated with No. 09-1056), vacating the SEC’s Rule 151A, which would have expanded the SEC’s oversight to include fixed indexed annuities.