Military Life Insurance Reform

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.