The House passed legislation last week by a vote of 405-2 that imposes tighter standards on sales of insurance products to military personnel on bases.
However, action in the Senate will not occur until the fall, when a report on sales practices on military bases sought by the leadership of the Banking Committee is due to be completed, according to a staff official representing Sen. Richard Shelby, R-Ala., chairman of the committee.
After the House vote, Rep. Mike Oxley, R-Ohio, chairman of the House Financial Services Committee, said, “The legislation will address this critical issue by helping to put an end to the long-standing problem of unscrupulous securities and life insurance firms which have been taking financial advantage of the men and women in our armed forces.
“There is no reason that any company selling these questionable plans can’t replace them with more reputable products as sold in the civilian market,” Oxley added.
Frank Keating, president and CEO of the American Council of Life Insurers, said, “House approval of this bill signals strong bipartisan support for curtailing abusive life insurance and mutual fund sales practices at military installations.”
David F. Woods, CEO of the National Association of Insurance and Financial Advisors, said, “NAIFA supports H.R. 458 and is encouraged that the bill mandates coordination with the state regulators.”
The bill “helps to free military personnel from predatory sales practices that NAIFA condemns while assuring that those who are serving our nation will have access to insurance products to protect themselves and their families,” said Woods.
The bill clarifies that state insurance regulators have jurisdiction over insurance sales on military bases within their states. It also bans sales of contractual mutual funds and requires that military personnel be told about government life insurance programs before buying private life insurance.
This bill also would allow military post commanders to ban unscrupulous agents from their bases and posts and forward a list of these banned agents to the Department of Defense. At the same time, it gives the DOD authority to send these lists to state insurance departments for further investigation.