The U.S. Department of Defense is mounting its own effort to respond to complaints about abusive financial services sales practices on military bases.[@@]
The Defense Department has proposed military base sales regulations that incorporate consumer protection provisions similar to those included in a bill now awaiting action on the House floor.
The department has opened a 60-day comment period for the proposed regulations and scheduled a May 6 hearing on the proposed regulations at the Central Library in Arlington, Va.
The proposed regulations require closer cooperation between military authorities and civilian financial services regulators, including state insurance commissioners. The regulations also require the Defense Department to create and maintain a master list of disciplinary actions taken against sales agents at military bases and to make such a list available to legal personnel at all bases.
The American Council of Life Insurers, Washington, and the National Association of Insurance and Financial Advisors, Falls Church, Va., are welcoming the proposed regulations.
“The proposed rules would strongly increase supervision of life insurance sales to military personnel,” ACLI spokesman Jack Dolan says. “They are responsive to abuses uncovered but, importantly, don’t appear to deny our military personnel from obtaining coverage they may want and need.”
Dolan says the Defense Department proposal does not appear to target any one distribution method. “It does impose new and rigorous rules relating to sales overseas, and we’ll have to evaluate them further,” he says. “But again, the industry shares the desire of both Congress and the DOD to straighten out this situation.”
A NAIFA spokesman says NAIFA will want to work with the Defense Department to improve the final rule. But “NAIFA is pleased that the proposed regulation recognizes the role of state insurance regulators,” the spokesman says.