A member of Congress says he will be introducing a bill that will address the issue of life insurance sales on military base grounds.[@@]
Rep. Max Burns, R-Ga., whose district includes a high concentration of military personnel, says he plans to introduce the Military Personnel Financial Services Protection Act when Congress reconvenes Sept. 7. He has asked the U.S. House Financial Services Committee for an expedited hearing on the bill.
The New York Times drew lawmakers’ attention to the issue earlier this summer, when it ran a series of articles that described allegations of deceptive sales practices on military base grounds and inappropriate sales of insurance products to young soldiers.
“I am outraged that our men and women in uniform are being unfairly targeted in the sale of dubious financial products,” Burns writes in a letter asking his fellow lawmakers for their support for the bill.
The bill would declare that state insurance regulators have authority over insurance activities taking place on military base grounds and federal lands in their states.
The bill also would require insurance agents selling products on military bases to disclose that subsidized coverage might be available from the federal government, and it would ban outright the sale of mutual fund contractual plans.
Contractual plans, which impose front-end sales loads that can amount to as much as 50% of first-year contributions, “virtually disappeared from the civilian market in the early 1980s after decades of sales abuses and regulatory crackdowns,” Burns writes in his letter. “These plans are not recommended by any reputable independent financial advisor and are highly inappropriate for military personnel with short-term risk horizons.”
House Financial Services Committee Chairman Mike Oxley, R-Ohio, says the committee will hold hearings on marketing of life insurance on military bases in September.