Financial Product Sales: Actions Needed to Protect Military Members Page: 19 of 28
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that was published for comment also lacked any provisions relating to
such information. In addition, when we issued our June 2005 report on
DOD's insurance solicitation oversight, DOD was reluctant to provide
information to regulators beyond indicating that DOD installations had
suspended or revoked a given firm's or individual's solicitation privileges
or that the violations involved the eligibility of the agent to hold a State
license or meet other regulatory requirements.17 However, staff in the
office that oversees the policy directive told us more recently that they
intend to specifically require in the new directive that base personnel
report to financial regulators any service member concerns or complaints
that relate to the quality of the financial products offered to them or
regarding the appropriateness of the practices used to market these
products. DOD has not, as of yet, issued this new directive. To ensure that
financial regulators have critical information that they need to identify
problematic products and sales practices, the report we prepared for this
committee recommends that DOD issue a revised DOD solicitation policy
directive that would require that information on service member
complaints related to financial product sales be provided to relevant state
and federal financial regulators.
DOD and financial regulators have also worked together to increase
education for military members. For example, NAIC and DOD personnel
have worked to together to develop a brochure that can be distributed to
service members that describes insurance products and lists the state
regulatory organizations to contact if they have concerns. In addition,
NASD was cooperated with DOD personnel as part of developing the
education campaign that is being planned using the money from the
broker-dealer contractual plan settlement.
However, DOD has not acted to fully address potential barriers to
increased sharing with financial regulators. For example, securities
regulatory staff told us that while they were conducting their
investigations of contractual plan sales, personnel at some DOD
installations were reluctant to share any information involving specific
service members for various reasons. According to these regulators, the
17In response to our June 2005 report (GAO-05-696), DOD also concurred with several other
recommendations we made, including agreeing to clarify the policy in the revised
solicitation directive relating to the "cooling off' period before processing allotments for
insurance, improving its database of insurance allotments, and reminding all installations
of the policies related to initiating or changing allotments. Our findings on these issues are
discussed in appendix 1.
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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/m1/19/: accessed May 27, 2019), University of North Texas Libraries, Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.