MORRISON APPLAUDS CONGRESSIONAL ACTION TO PROTECT MILITARY PERSONNEL FROM UNSCRUPULOUS SALES OF INSURANCE AND INVESTMENT PRODUCTS
Enactment of Federal legislation prohibits predatory sales practices for financial products on U.S. military installations located in this country and overseas
Montana State Auditor John Morrison today applauded the enactment of legislation to protect military personnel from unscrupulous sales of insurance and investment products. “The Military Personnel Financial Services Protection Act” was signed into law on September 29 by President Bush.
“I am pleased that Congress did the right thing by preserving the authority of state securities regulators on military installations,” Morrison said. “The folks who protect our nation deserve to be protected against con-artists trying to pedal their unsuitable products on military bases. The measure passed by Congress allows my office the authority to fully protect members of the military from these deceitful practices.”
The Department of Defense will now maintain a list of individuals who have been banned from selling financial services products on military bases, and to share that list with Federal and State securities and insurance regulators. “This new federal/state system will help track rogue agents who go from base to base to try to sell unscrupulous financial products,” Morrison said. “It will help folks separate the wheat from the chaff so they know they’re dealing with legitimate, properly registered products and agents.”
State securities regulators also support provisions in the newly enacted law that will allow online public disclosure of information regarding financial firms and their employees, Morrison said. This will enhance investor protection by ensuring that the investing public benefits from being able to access this information online before deciding which firm and representative will handle their brokerage and investment advisory business.
The legislation bans the sale of high-priced, contractual mutual funds. The product has become scarce in the civilian market but was still being offered to soldiers by sales staffs allowed on military bases. Congressional hearings revealed that life insurance sales were made without informing soldiers that life insurance was available to them through the federal government. Under the act, disclosures are required before private life insurance could be sold to military personnel.