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Agents Of Ga. Firm Barred From Military Base

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Commanders at Fort Benning, Ga., have acted to restrain several insurance agents from access to the base.[@@]

The commanders barred or restricted agents of a Hinesville, Ga., insurance agency whose license the Georgia Insurance Department wants to revoke. Their action was disclosed in a statement of facts that the state Insurance Department has issued as it moves to revoke the license of the agency, Associates Financial Group, Inc.

In September, American Amicable Insurance Company of Texas, Waco, also barred the agents and the principal of Associates Financial from selling its products, according to the department’s statement, which it issued Oct. 8.

“The actions of American Amicable were based upon the manner in which the product was marketed and sold and precipitated by the fact that the. . . agents had either received letters of exclusion or had privileges to solicit restricted, limited or revoked by Fort Benning for one or more violations of military regulations in the marketing and sale of insurance products,” according to the statement.

The Insurance Department scheduled a hearing for Nov. 15 in Hinesville to consider revoking the license.

Subject of the disciplinary action is Jacques Frym, the principal agent and CEO of Associates Financial Group, and Daiana Frym, who serves as chief financial officer and secretary of the agency.

The lawyer for the Fryms, Joe Cragan of Morris Manning Martin, Atlanta, acknowledged receipt of the document but referred all requests for information to American Amicable.

An official of American Amicable says the company is one of 17 insurance companies throughout the country notified of the pending action against Associates Financial. The companies are located in Texas, Wisconsin, Ohio and Colorado.

The Insurance Department says in its document that it wants to revoke the license for actions by Associates Financial agents in selling insurance products at either Fort Benning or Fort Stewart, Ga.

The department charged that agents of Associates Financial marketed the American Amicable products to military personnel as a “savings plan” or an “investment” and hid the fact that the products were really an insurance plan.

“At no time did the members of the armed forces solicited by agents for the respondent clearly understand that they were being sold a product of insurance, as opposed to and distinguished from making a financial investment,” the complaint stated. Such practices are deceptive, the department charged.

The order by Georgia Insurance Commissioner John Oxendine is the first legal action against agents for insurance sales to military personnel since a firestorm about some of certain practices was created by a New York Times article last July. The article raised concerns that some agents were pushing unsuitable insurance products on soldiers on or near their bases.

The controversy generated a bill passed by the House of Representatives earlier this month, 396-2, that spells out that sales of insurance on military bases is subject to state regulation. The bill also mandates substantial disclosures about insurance products that are marketed to members of the armed forces.

It also bans selling mutual fund contracts on U.S. military bases, including those overseas, and it requires state regulators and the Department of Defense to keep a list of agents banned from military bases and to share that information with base commanders.

Members of Congress have asked the Government Accountability Office to study the issue and have also asked the U.S. Attorney’s Office in Philadelphia to subpoena some records of these sales from American Amicable.

The National Association of Insurance Commissioners has also created an informal group of regulators, headed by Commissioner Oxendine, to deal with the issue.


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