(Washington, DC) The District of Columbia Department of Insurance, Securities and Banking (DISB) today applauded the enactment of a new 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 George W. Bush.

 

"We are proud that Congress took measures to protect those who are sacrificing the most for our country," DISB Commissioner Thomas E. Hampton said. "I'm also glad that Congress expressly preserved the authority of state securities regulators since we are best equipped to provide regulatory oversight and take swift enforcement action."

 

"This federal/state partnership is crucial to ensuring that the men and women of our military and their families can enjoy the full protection of the law," Hampton said.

 

According to Hampton, state securities regulators support provisions in the newly enacted law that will allow online public disclosure of information regarding financial firms and their employees. This will enhance investor protection by ensuring that the investing public is able to access this information online before deciding which firm and representative will handle their brokerage and investment advisory business.

 

In addition, the Department of Defense will now maintain a list of individuals who have been banned from selling financial services products on military bases, and will share that list with Federal and State securities and insurance regulators. "This will help track rogue agents who go from base to base attempting to sell unscrupulous financial products," Hampton said.

 

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 staff 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.