A 2004 investigative report by the New York Times revealed
that some soldiers on military bases were being sold unnecessary
insurance policies that were actually contractual plan mutual
funds. Included in the reports were descriptions of meetings—sometimes
compulsory—where soldiers allegedly were encouraged to
purchase high-cost products from salesmen who gave the appearance
of being independent financial planners working on the soldiers'
behalf.
The Military Personnel Financial Services Protection Act (S.
418), sponsored by Senator Michael Enzi (R-WY), bans the sale
of contractual mutual funds on military bases and grants state
insurance commissioners explicit authority in federal law to
regulate insurance sales to military personnel, on bases in the
United States and abroad, unless state regulations directly conflict
with federal law or would not apply to sales conducted on state
lands.
The Senate unanimously approved S. 418, the Military Personnel
Financial Services Protection, on July 19, 2006. The House passed
a version of the bill (HR 458) on June 28, 2005. The House passed
S. 418, 418-3, on September 21, 2006. President George W. Bush
signed S. 418 into law on September 29, 2006. |