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Life Groups Reshape Montana Military Sales Bill

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Life insurers and agents have persuaded Montana lawmakers to replace a bill aimed at protecting members of the armed services from unscrupulous financial services sales practices.

The Montana House Business and Labor Committee tabled the first bill, H.B. 542, after getting strong objections from the life industry.

Members of the committee have moved quickly to come up with a new military sales bill, H.B. 764, and representatives for the American Council of Life Insurers, Washington, and the National Association of Insurance and Financial Advisors, Falls Church, Va., are praising that bill.

John Morrison, Montana’s auditor, condemned industry opposition to H.B. 542 when that bill failed.

“Unfortunately, local insurance lobbyists convinced Republican committee members to table the bill,” Morrison said in a statement. “The men and women who protect our nation deserve to be protected against con artists trying to pedal unsuitable products on military bases.”

NAIFA spokesman Jim Edwards and Bruce Ferguson, ACLI spokesman, say their groups support the goal of protecting members of the military from unethical insurance sales and now support H.B. 764.

But the original bill, H.B. 542, contained confusing provisions that could have led to accidental violations of the law, Edwards says.

Unlike the new federal military sales law, H.B. 542 would have applied both on and off the grounds of military bases, says NAIFA spokesman Jim Edwards.

“It would be difficult for a producer to know, if he were talking to an officer in civilian clothes off base grounds, that he was talking to a member of the military,” Edwards says.

H.B. 542 also would have required an insurance producer to tell service members about their government insurance coverage at the outset of any meeting, before producers had had a chance to review clients’ coverage in any depth.

Bruce Ferguson, a senior vice president at the ACLI, Washington, says another problem with H.B. 542 is that it took aim at a “moving target” by authorizing the state auditor to enact military sales guidelines formulated by the National Association of Insurance Commissioners, Kansas City, Mo.

The problem is that the NAIC is still working on its guidelines and only recently has made them available for public comment, Ferguson says.


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