Members of the House today voted 418-13 to send President Bush the Senate version of a bill that would change the rules governing sales of life insurance and other products to military service members on military bases.
Supporters of the bill, S. 418, the Military Personnel Financial Services Protection Act, say they expect the president to sign the bill.
S. 418 was introduced by Sens. Mike Enzi, R-Wyo., and Hillary Clinton, D-N.Y.
Officials at the National Association of Insurance and Financial Advisers, Falls Church, Va., and the American Council of Life Insurers, Washington, have issued statements welcoming passage of the bill.
NAIFA is pleased that the bill “appropriately recognizes state jurisdiction over the sale of life insurance on military bases and takes advantage of existing state regulatory safeguards intended to protect all consumers from unfair and deceptive sales practices,” the group says.
ACLI President Frank Keating also is praising bill provisions that would give state regulators oversight of insurance sales on military bases.
The House passed its own version of the bill in June 2005, but it recently decided to accept the Senate bill, according to a NAIFA official.
The House decision to approve the Senate version eliminates the need for a time-consuming reconciliation process.
Although some provisions of the Senate bill are tougher on financial services companies, the Senate bill leaves out “predatory lending” provisions that were included in the House bill.
The Senate had originally planned to address that issue separately, but provisions dealing with that have been added to the 2007 fiscal year defense authorization conference report.
The conference report is still in conference, and bankers are looking to see whether the transferred lending provisions will affect the credit card business.
S. 419 bars the sale of contract mutual funds, which impose unusually high fees on purchasers in the early contract years.
The bill also clarifies that military bases fall under the jurisdiction of the insurance regulators for the state in which the bases are located, and the bill encourages increased communication between state regulators and military authorities.
Another bill provision requires the U.S. Department of Defense to maintain a list of individuals who have been barred from a base for unfair sales practices.
Passage of “this legislation ensures that members of the armed forces, who are protecting us, are also protected,” says John Oxendine, Georgia insurance and safety fire commissioner.
Officials at the National Association of Insurance Commissioners, Kansas City, Mo., say they have signed a memorandum of understanding with the Defense Department.
The memorandum will establish a partnership between the NAIC and the deputy undersecretary of defense for military community and family policy, NAIC officials say.
The agreement allows the Defense Department to use the NAIC’s Life Insurance for Military Personnel brochure in its campaign to improve the financial literacy of service members and their families, NAIC officials say.
The NAIC also is adding a data field to the NAIC’s Complaint Database System, to help state insurance departments classify complaints related to military service members, NAIC officials say.
“State insurance officials share the commitment to combat those who prey on the financial security of our military personnel, and to provide the men and women in the armed forces with the highest level of consumer protection,” says NAIC President Alessandro Iuppa, the Maine insurance superintendent.
Going forward, states will continue to enforce existing unfair trade practices standards, which prohibit the misrepresentation of the benefits, advantages, conditions or terms of any policy, Iuppa says.