NAFA Response to Stan Haithcock from LifeHealthPro
April 10, 2013 by Kim O'Brien
April 5, 2013
LifeHealthPro Editorial Headquarters 7009 S. Potomac Street, Suite 200 Centennial, CO 80112
Letter to the Editor of LifeHealthPro
Re: “The annuity industry needs its own Series 7 exam…now” by Stan Haithcock
Dear Editor,
NAFA, the National Association for Fixed Annuities, has been advocating on behalf of fixed annuities for more than 15 years, and it is the only organization dedicated to safeguarding fixed annuities for American consumers. NAFA and its members have diligently and collaboratively worked with all levels of government (local, state and federal), to educate independent producers on sales best practices, proper use of professional designations and so much more.
Mr. Haithcock’s comments lumping 151A legislation in the same sentence as “annuity product slingers” as well as his blanket statement about the need for the annuity industry to “raise the bar really high for initial and ongoing licensing requirements” is self-serving and contradictory to the NAIC’s tracking of complaints and market conduct actions.
NAFA members believe that there is no place for abusive sales practices in our industry, and much effort has been made both on a regulatory front and within the industry voluntarily to prevent such practices and punish their purveyors. Unfortunately, Mr. Haithcock’s blog made it appear as though all independent professionals who sell fixed annuities are unethical. While Mr. Haithcock quickly makes reference to Rule 151A, he neglects to mention that it was vetted at the highest levels of government and, in fact, was declared moot, first by the D.C. Circuit Court of Appeals vacating the Rule and remanding back to the SEC to start over again and second by the passage of the Harkin amendment in Congress. There is clear-cut certainty that the fixed indexed annuities offered in the marketplace today are insurance products and not securities. By stating that the industry, “…needs its own Series 7 exam…now,” flies in the face of the millions upon millions of dollars Americans have lost to Series 7 licensees. Meanwhile when a sale of a fixed annuity is deemed fraudulent or unsuitable the insurance company returns the annuities full value and often with additional interest. This demonstrates that fixed annuities are robustly regulated by the individual state insurance departments and the licensing and continuing education requirements are appropriate and best for consumers.
We find it quite odd and questionable that LHP published what was essentially an incendiary blog without substance and its sole purpose appears to be self-promotion. In doing so, the publication has insulted an entire industry of independent producers who work diligently with their respective clients to develop secure retirement alternatives and plans. That alone is cause for great concern. Hopefully, upon further reflection, the Editors will reconsider material of this nature before publishing.
Sincerely,
Kim O’Brien, President & CEO The National Association for Fixed Annuities