Members of the U.S. House Financial Services Committee today voted 68-0 to approve a bill that could change the rules governing sales of insurance to military personnel.[@@]
Although the bill, H.R. 5011, enjoys broad support, it may have a hard time reaching the President’s desk this year because Congress wants to leave by Oct. 8, and the Senate has not said whether it will act on a military insurance sales bill.
The Financial Services Committee debated the bill and approved several amendments in the morning before holding off a final vote so it could consider legislation implementing changes in security activities proposed by the 9/11 Commission.
The military sales bill bars sales of contractual mutual funds on military bases and proposes a broad range of changes in oversight by both federal and state regulators. On the federal level, it mandates that the U.S. Securities and Exchange Commission, the NASD and the U.S. Department of Defense increase scrutiny of those selling insurance on military bases, and it requires prompt disclosure by the agencies of disciplinary actions taken against both carriers and producers for alleged abuses in sales of these instruments on military bases.
The bill also says “it is congressional intent” that the states undertake certain actions to improve oversight of sales on military bases within 12 months.
The legislation also implements several “good practices” designed to end abuses in sales of insurance to military personnel on bases as proposed by the American Council of Life Insurers, Washington, and the National Association of Insurance and Financial Advisors, Falls Church, Va. These address functional regulation, education and military base market conduct in an effort to improve protections for military personnel.