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March 30, 2007 at 10:46 AM
The National Association of Insurance Commissioners has proposed a rule that would set new standards for the sale of insurance products on military bases.
One provision of the model rule would require insurers that market products with a “side” or savings fund to demonstrate suitability for junior enlisted service members in pay grades E-4 and below.
The proposal would make it a deceptive trade practice to solicit in barracks, day rooms and other restricted areas.
If adopted, the model rule also would make more than 20 identified practices illegal under state law.
Under the proposal, certain product features would be prohibited altogether, regardless of suitability. These include deceptive interest crediting methodologies and automatic premium payment provisions, which divert accumulations from side funds to pay for life insurance in the event of default.
