Variable annuities and variable life insurance are complicated and too often sold improperly, concluded the Securities and Exchange Commission and the National Association of Securities Dealers in a jointly written 30-page staff report Wednesday. The NASD has seen many customer complaints and examples of improperly sold policies, despite the fact that the products have been subject to regulation by both agencies.

The agencies found significant weaknesses in the practice of selling variable products, particularly with regards to sales to senior citizens and those who cannot afford to invest in such long-term investment vehicles. They found some customers buying variable products with money borrowed from home mortgages.

"Given the complexity of variable annuities, extra care is required. The findings of these examinations show that many firms should take steps to improve their practices," said SEC Chairman William Donaldson.

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