The Military Financial Services Protection Act Signed Into Law
WASHINGTON, D.C. (September 29, 2006) —The North American Securities Administrators Association Inc. today applauded the enactment of legislation to protect military personnel from unscrupulous sales of insurance and investment products.
Joseph P. Borg, NASAA President and Director of the Alabama Securities Commission, said he is pleased that Congress worked with NASAA on several amendments to “The Military Personnel Financial Services Protection Act,” which was signed into law today by President Bush.
“We are proud that Congress expressly preserved the authority of state securities regulators on military installations,” Borg said. “The men and women of our military and their families deserve that the jurisdiction of the agencies best equipped to take swift enforcement action remains explicitly intact. This federal/state partnership is crucial to ensure that those who are willing to sacrifice the most in order to ensure our safety are not forced to accept less than the full measure of protection the law allows.”
State securities regulators support provisions in the newly enacted law that will allow online public disclosure of information regarding financial firms and their employees, Borg 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.
Finally, 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 will help track rogue agents who go from base to base to try to sell unscrupulous financial products,” Borg 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 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.
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