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Yadin Antebi,

Commissioner of Insurance and Capital Markets,

Finance Ministry

Dear Mr. Antebi,

I have a little money saved in a "management insurance" policy (bituach minahalim), a training fund (keren hishtalmut) and a provident fund.

Mr. Commissioner, yesterday I read your monthly announcement to the press about profit-sharing policies at Israel's insurance companies.

First of all, thank you. I learned a lot of interesting stuff. I could compare the returns of the policies at all the insurance companies; the management fees they charge; and the updated composition of their investment portfolios.

Among other things, I realized that the insurance companies consistently devote about 30 percent of their portfolios to stocks. That makes sense for long-term savers, but it does mean we could be in for painful fluctuations in the short run.

I also learned that the insurance companies took NIS 1.2 billion in management fees from their customers in 2005. That is an impressive sum.

But the truth is, after I finished reading the press announcement I felt angrier and angrier with you, or rather, with your predecessors. You are, after all, brand new on the job, with just a few months under your belt.

Thing is, I can't do a thing with the information you gave me. The insurance policy terms the Finance Ministry approved over the years prevents me from withdrawing money from a policy without impairing my rights. Say I discover that my insurance policy is a lousy one or that my insurance company is terrible at managing money: I can't do a thing about it.

I wouldn't have complained in public like this if it wasn't for the fact that another NIS 100 billion is trapped with my little amounts. I wouldn't be so upset if the Finance Ministry hadn't proved four months ago that it really could promote genuine, sweeping reforms. Look at the Bachar reform of the capital market and banks.

Enabling people to take their money out of old life insurance policies is just one of the many reforms needed in Israel's sector of people managing other people's money. Here are a few more.

l The Bachar reform failed in allowing insurance companies to assume highly dominant positions in the capital market before upgrading supervision, transparency, and the mobility of money they manage for people. You don't need a commission like Joseph Bachar had to achieve this; you have the tools to deal with the insurance companies quickly and strongly by yourself.

l The public's portfolio of financial assets has already reached NIS 1.8 trillion. Gradually the whole amount is seeping into management in the open marketplace.

A portfolio like that deserves a single, strong authority that incorporates all the relevant powers of the Finance Ministry, the Bank of Israel, and the Israel Securities Authority, whose purpose is to protect the people whose money is being managed by other people.

l Before a Capital Market Authority is created, effective Chinese walls must be erected between the owners of the financial institutions and the investment committees of the companies. Owners or managers who try to influence investment committee decisions should face criminal charges. Every owner of every financial institution must understand that any effort to harness the public's money to promote his or his company's interests will land him behind bars.

l Give us IRAs, Mr. Antebi. Allow us to handle private pension accounts to manage our long-term savings ourselves. The income tax rules force Israel's savers to deposit their money in designated savings account, most of which are hopelessly non-transparent. That is the only way to lock in tax benefits of long-term savings.

Let us manage our own long-term savings, with appropriate restrictions to assure its term. Suddenly you'll see the pension giants slashing their prices, providing proper disclosure, improving service, persuading us they aren't taking a joyride on our money.

The competition arising in the arena of managing other people's money could mean that some bad eggs get into the basket. Mr. Commissioner, don't wait for scandal to erupt and hurt the public's confidence in the capital market. Prove your mettle.