Bill to Protect Military from Unfair Financial Product Sales Gets Another Go

WASHINGTON – A bill that aims to safeguard military personnel from unfair financial products and bad sales practices was introduced on Feb. 1. The Military Personnel Financial Services Protection Act of 2005, introduced by Rep. Geoff Davis (R-Ky.), would ban the sale of contractual mutual funds, an obscure product that disappeared from the civilian market more than two decades ago; clarify that state insurance commissioners have jurisdiction over military bases located within their borders, as well as military installations overseas; and require that military personnel be informed about life insurance available from the federal government prior to the sale of any private insurance. Additionally, the bill would create a list of barred insurance agents and financial advisors that would be made available nationally to all military installations and federal and state financial regulators. Notification to military installations and regulators when there is a change in the list would also be required. The states would be directed to develop additional insurance protections to further safeguard members of the armed services. Similar legislation was unanimously voted out of the Financial Services Committee in the 108th Congress and passed the House by a vote of 396 to 2. It was referred to the Senate where no action was taken.