Financial Product Sales: Actions Needed to Protect Military Members Page: 25 of 28
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counseling is required or optional during the cooling-off period. In
addition, the directive and the standard allotment forms do not contain
procedures for documenting whether the counseling took place.
To ensure better compliance with the directive, our June 2005 report
recommended that DOD clarify the requirements relating to the cooling-off
period in its upcoming revision to the solicitation policy directive, and
thereby eliminate the ambiguities about its requirements. In its comments
on a draft of our report, DOD concurred with this recommendation and
stated that it had identified an additional ambiguity in the current revised
directive regarding who is responsible for monitoring and enforcing the
cooling-off period for supplemental life insurance purchases. It indicates
that the proposed revision to the directive will address these issues.
We also found DOD personnel were not consistently complying with
regulations relating to ensuring that allotments were appropriately
authorized. According to DOD's Financial Management Regulation,
establishment of, discontinuance of, or changes to existing allotments for
supplemental life insurance are to be based on a written request by a
service member or someone with a special power of attorney on behalf of
the service member.5 However, DOD personnel and insurance agents
indicated that some offices accepted allotment forms personally submitted
by insurance agents or through the mail with only the signature on the
form serving as proof that the service member initiated the allotment. For
example, finance office personnel at Naval Station Great Lakes said that
about half of all insurance allotment forms submitted to and processed by
their office came from insurance agents. In addition, we reported that a
life insurance agent was alleged to have submitted allotment forms at Fort
Bragg for service members who later said they had not wanted the policies
for which they were paying. Finance personnel said they accepted
allotment forms in this manner to ensure that polices start promptly, but
starting allotments without service members' awareness can negatively
affect members' finances and their unit's morale and readiness.
5DOD, Financial Management Regulation 7000.14-R, Vol. 7A, Chapter 41, sec. 410801. This
regulation allows most financial allotments to be established though MyPay, DOD's
automated payroll program. MyPay allows service members to start, stop, or change
allotments with financial institutions when the funds are directed to be sent to a savings or
checking account. MyPay is not intended to be used for allotments to purchase
supplemental life insurance. Use of MyPay to establish a supplemental insurance allotment
makes it impossible for installation officials to monitor or enforce the proper use of
insurance allotments and other parts of the on-installation personal commercial solicitation
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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/m1/25/: accessed May 19, 2019), University of North Texas Libraries, Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.