Financial Product Sales: Actions Needed to Protect Military Members Page: 10 of 28
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military service members who purchased life insurance policies from the
company by having its agents pose as independent and objective
counselors representing a nonprofit fraternal organization that offered, as
one of its benefits, the ability to purchase the company's life insurance.
The insurance companies that marketed primarily to service members
have also been accused of violating DOD's own solicitation policies for
many years. For example, a 1999 DOD Inspector General report and a
DOD-commissioned report issued in 2000 found that insurance companies
were frequently employing improper sales practices as part of marketing
to service members. Among the activities prohibited by DOD that the
Inspector General's report found were occurring included presentations
being made by unauthorized personnel, presentations being made to group
gatherings of service members, and solicitation of service members during
duty hours or in their barracks. More recently, DOD personnel conducted
an April 2005 proceeding in Georgia to review the practice of one of the
companies currently being investigated by state insurance regulators
regarding allegations of multiple violations of the DOD directive on
insurance solicitation. Among the practices alleged at this hearing were
misleading sales presentations to group audiences and solicitations in
unauthorized areas, such as in housing or barracks areas. DOD recently
began maintaining an online listing of actions taken against insurance
companies or their agents by various DOD installations. As of August 11,
2005, this web site listed 21 agents from some of the 6 companies that
market primarily to military members that are permanently barred-or
have had their solicitation privileges temporarily suspended-at 8
different military installations.
Our own work also found that problems involving sales of insurance
products to military members appeared to be widespread. We reported in
June 2005 that DOD only recently began systematically collecting and
disseminating information on violations of DOD's solicitation policy by
sellers of financial products.8 However, as part of that report, we also
surveyed DOD personal financial training program managers and found
that nearly 37 percent believed that insurance company representatives
had made misleading sales presentations at their installations during 2004,
with 12 percent believing that such presentations were occurring
routinely. At the two bases visited as part of work for this report, we also
found evidence that problematic sales to service members were occurring.
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United States. Government Accountability Office. Financial Product Sales: Actions Needed to Protect Military Members, text, November 17, 2005; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc292981/m1/10/: accessed May 22, 2019), University of North Texas Libraries, Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.