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FOR IMMEDIATE RELEASE
NAIC
OUTLINES PROTECTIONS FOR MILITARY PERSONNEL WASHINGTON, D.C. (March 29, 2007) – The National Association of Insurance Commissioners (NAIC) today released its report to Congress on ways to improve the quality and sales of life insurance sold to military personnel. “Our report shows the need for state regulators to come in and protect our servicemen and women from being scammed by unscrupulous insurance agents,” said Georgia Insurance Commissioner John Oxendine, who co-chairs the NAIC’s Military Life Insurance Working Group. The military life insurance sales report is the first of two NAIC reports prompted by the Military Personnel Financial Services Protection Act, which was signed into law on September 29, 2006. Prepared in consultation with the Department of Defense (DoD), this interim report outlines the best practices and necessary protections for ensuring the quality and appropriateness for life insurance products sold to the nation’s service members both on and off military installations in the U.S. and abroad. “This report sets a clear plan of action for the Congress and the states to protect the men and women of the armed services,” said Texas Commissioner and Working Group Co-Chair Mike Geeslin, who also expressed his appreciation to the many regulators from across the country who contributed to this multi-state effort to protect military personnel. The centerpiece of the report is the “Military Sales Practices Model Regulation,” which makes it a violation to engage in certain acts and practices previously identified in state and federal investigations by declaring them to be false, misleading, deceptive or unfair. Many of the practices identified incorporate DoD solicitation rules. For example, the Model Regulation, tracking DoD regulations, makes it a deceptive trade practice to solicit in barracks, day rooms and other restricted areas. If adopted, the Model makes more than twenty identified practices illegal under state law. The Model Regulation addresses congressional concerns in federal law regarding suitability and product standards. In this regard, the Model Regulation requires 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. Also, certain product features are 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 the life insurance in the event of default. The NAIC will release its final report on implementation efforts to Congress on September 29, 2007. Click here to view the military life insurance sales report.
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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©2007 National Association of Insurance Commissioners. All rights reserved. | ||
