The life insurance industry already is tackling concerns about sales of life insurance products on military bases.[@@]

The industry has started working with the military and an agents’ association to revise the rules for military base life sales, Frank Keating, president of the American Council of Life Insurers, Washington, said last week while he was on the CNBC program Kudlow & Cramer.

Keating appeared on a segment of the program that dealt with a major series of New York Times articles about military base life sales. The articles cite allegations that some representatives used misleading and at times coercive tactics to sell unsuitable products to young soldiers.

Keating said the ACLI is working with the military to remove bad actors from bases while still ensuring that legitimate companies and agents will have access to military consumers.

“We are meeting as an industry with the agents, who are just as outraged about this, the agent association, as we are,” Keating said. “And we are working with the Department of Defense–we’ve already had our first meeting–to say, ‘How can we do this together to make sure that only good products, good people are on bases and bad products and bad people, just like bad lawyers and doctors, are not permitted on?’ And we’re working through that.”

Although the ACLI has lauded the Times for its reporting on the issue, Keating took the opportunity to counter a characterization made in the articles of the ACLI as a group that “opposes any tightening” of the rules governing sales of insurance products on military bases.

“The reality is we want tightening,” Keating said. “But what we want is fairness. That companies that are legitimate, agents that are legitimate, have an opportunity to have access to bases, just like the banks and securities firms. We don’t want any abusive practices; we don’t want any unacceptable products. I mean, that is just completely dumb and unacceptable for this industry and, quite truthfully, for the military base commanders.”

Those base commanders and the Defense Department drew some criticism from Keating, who said he found their “paralysis” on dealing with the issue puzzling.

“The reality is…insurance is state-regulated,” Keating said. “These base commanders, if there are rogue agents or rogue companies dealing with them, with their base personnel, they can pick up the phone and demand that the state insurance commissioners, the insurance department in that state, do something about it. They can pick up the phone and call us, and we’ll jump on the back of the regulators as well as the company. That has not happened.”

Keating and the ACLI will likely soon have the opportunity to make their arguments before Congress. Appearing on the same program recently, U.S. House Financial Services Committee Chairman Mike Oxley, R-Ohio, said that the committee will hold hearings on the issue, possibly as part of the “roadmap” for insurance regulatory reform legislation he is crafting with Rep. Richard Baker, R-La., who chairs a key financial services subcommittee.