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FOR IMMEDIATE RELEASE NAIC COMMENDS SENATE COMMITTEE FOR Vote Signals End of Abusive Sales to Nation’s Military KANSAS CITY, MO - (June 16, 2006) - The National Association of Insurance Commissioners (NAIC) is applauding action by the Senate Banking Committee that would prevent high-cost mutual funds and insurance products being sold to our nation’s military personnel. By voice vote Wednesday, the Senate Banking Committee approved S. 418, the Military Personnel Financial Services Protection Act, sponsored by Senator Michael Enzi (R-Wyo.) and Senator Hillary Clinton (D-NY). S. 418 addresses what ranking panel Democrat Paul Sarbanes of Maryland calls “misleading sales pitches and abuses.” S. 418 would ban periodic payment plans, a type of financial product that has all but disappeared from the civilian market because it carries unusually high fees and sales commissions. State insurance officials share the commitment to combat those who target the financial security of U.S. military personnel, and to provide the men and women of the Armed Forces with the highest level of consumer protection. "We commend the Senate Banking Committee's action on S. 418, which supports America's military personnel,” said John Oxendine, Georgia Insurance and Safety Fire Commissioner. “This legislation targets those who prey upon our nation's soldiers and will provide consumer protections that will benefit the soldiers and their families." Prior to the Senate action, the House had passed H.R. 458, the Military Personnel Financial Services Protection Act, which slightly differs from the Senate version. The next step will be for the full Senate to approve S. 418, and then move to a conference for final congressional approval. In preparation for the passage of this legislation, state insurance commissioners formally charged the NAIC’s Life Insurance & Annuities Committee in February to explore the appropriateness of developing specific suitability standards for life insurance sales to military personnel and, if appropriate, to develop such standards. The Committee is also modifying the Senior Protection in Annuity Transactions Model Regulation to ensure the consumer protections in this model apply to all individuals regardless of age. The current model applies to senior consumers who are 65 years of age or older. During the approval process for S. 418, the NAIC will continue to collaborate with the Department of Defense to address these issues. While these discussions proceed, the states will continue to enforce existing unfair trade practices standards, which prohibit the misrepresentation of the benefits, advantages, conditions or terms of any policy. The NAIC encourages swift congressional action for final passage of S. 418.
About the NAIC About the NAIC Headquartered in Kansas City, Missouri, the National Association of Insurance Commissioners (NAIC) is a voluntary organization of the chief insurance regulatory officials of the 50 states, the District of Columbia and the five U.S. territories. The NAIC’s overriding objective is to assist state insurance regulators in protecting consumers and helping maintain the financial stability of the insurance industry by offering financial, actuarial, legal, computer, research, market conduct and economic expertise. Formed in 1871, the NAIC is the oldest association of state officials. For more than 135 years, state-based insurance supervision has served the needs of consumers, industry and the business of insurance at-large by ensuring hands-on, frontline protection for consumers, while providing insurers the uniform platforms and coordinated systems they need to compete effectively in an ever-changing marketplace. For more information, visit NAIC on the Web at: http://www.naic.org/press_home.htm
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