Legislation acts to address federal report detailing predatory insurance sale practices to members of the Armed Forces
BOSTON – The House of Representatives today unanimously passed legislation to protect military service members from insurance fraud. The bill was filed in response to Congressional findings that predatory life insurance sales to military personnel had occurred on military bases nationwide.
Under the legislation adopted by the House, the Commissioner of Insurance would be granted authority to regulate insurance sales on military bases across the Commonwealth by declaring certain identified acts or practices to be false, misleading, deceptive, or unfair.
“In light of federal reports indicating that our honorable service members have been preyed upon by insurance salesmen, I am happy to stand with my colleagues to protect our servicemen and women from these deceptive and fraudulent practices,” said Representative Barbara L’Italien (D-Andover).
“This bill goes a long way to protect our honorable servicemen and women from predatory insurance sales practices. I am proud that the House acted today to address these practices so that the Commonwealth can develop regulations that will guard our military personnel against the fraudulent and dishonest sale of insurance products,” said House Speaker Salvatore F. DiMasi (D-Boston).
“The predatory sales practices of these insurance salesmen, who took advantage of our military service personnel before being shipped out to defend their country, were unconscionable,” said Representative Ron Mariano (D-Quincy), Chair of the Joint Committee on Financial Services. “I think it is appropriate that, as we approach Memorial Day, we move to ensure that America’s bravest will no longer fall pray to unscrupulous insurance salespeople, who are only concerned with scoring a big commission.”
In November 2005, the Government Accounting Office (GAO) issued a report documenting fraudulent practices in the sale of insurance to military personnel, including: improperly selling insurance policies as investment products; allowing agents to pose as independent and objective counselors representing a nonprofit organization; sponsoring presentations made to group gatherings of service members where attendance was mandatory; soliciting service members during duty hours or in their barracks; and misrepresenting forms used to initiate pay allotments to deduct the payments for the products directly from the service members pay.
Based on the GAO report, President Bush signed into law the Military Personnel Financial Services Protection Act which directed states and the Department of Defense to work together to ensure the implementation of appropriate standards to protect members of the Armed Forces.
This legislation will now move to the Senate for consideration.
