Heavy Fallout From Times Articles
Members of Congress and the life insurance industry were forced to scramble for cover last week after the practice of selling private insurance to members of the military, especially those sales involving young and uninformed recruits, came under fire in two articles in the New York Times.
Published on July 19 and 20, the articles mentioned several insurers, including some that have been disciplined by the military for the use of misleading and improper sales practice to persuade soldiers to purchase products that provide little use or value to them.
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The Times articles prompted a swift response from lawmakers, as members of both the House and Senate requested hearings on the issue.
Rep. Rahm Emmanuel, D-Ill., a member of the House Financial Services Committee, asked chairman Michael Oxley, R-Ohio, to hold hearings on the issue “as soon as possible,” according to the paper, and the request is currently under review. In the Senate, Sen. Hillary Clinton, D-N.Y., who sits on the Senate Armed Services Committee, sent a letter to Defense Secretary Donald Rumsfeld asking for a Pentagon inquiry, and also to the committee leadership to request hearings as soon as Congress returns from the summer recess.
Clintons office also told the Times that she would try to remove language from the Defense Appropriations legislation the Senate was expected to act on last week that would bar the Pentagon from changing the regulations for on-base insurance sales until the General Accounting Office had completed an investigation into insurance industry complaints that some officers have interfered with insurance sales, either discouraging soldiers from making purchases or slowing the paperwork to have premiums deducted directly from their pay.
The American-Amicable Group, two of whose subsidiaries were mentioned in the article, posted a response to the articles, and specifically the first article, on its Web site. “The management of the American-Amicable group strongly disagrees with the content, misrepresentations and journalistic approach contained in the article,” the company said.
Two other companies mentioned in the articles, Florida-based American Fidelity Life Insurance Company and California-based Trans World Assurance Company, were unable to comment.