For Release: September 11, 2008

WASHINGTON, D.C.… The Financial Planning Association^® (FPA^®) has joined the heated industry debate over regulation of indexed annuities, submitting formal comments yesterday to the Securities and Exchange Commission (SEC) supporting federal oversight. Indexed annuities, which mimic stock market returns, are a product developed by the insurance industry in the mid-1990s. In 2007, indexed annuity assets totaled $123 billion.

Until the SEC rule proposal, indexed annuities were regulated by state insurance commissioners. Aggressive and misleading sales of the product to seniors at free luncheons hosted by insurance agents have been the source of widespread complaints and the focus of at least one hearing in Congress.

"We are very pleased that the SEC has moved forward to help protect the retirement assets of the vulnerable senior population," said Dan Barry, FPA's director of government relations. "Just like a prescription drug, there can be serious side-effects in purchasing a retirement product. Indexed annuities have been marketed as a risk-free investment, but they're not for everyone."

FPA cited a number of problems financial planners have identified in the marketing and sale of indexed annuities, including inadequate training of insurance agents, hidden costs, and limitations on income that are not disclosed to buyers. FPA also urged the Commission not to delay adoption of the rule, noting that industry opponents have had years to refine their arguments against securities regulation on the state level. Industry groups representing indexed annuity products have called on the SEC to delay adoption, claiming the proposal is being rushed through the review process.

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