WASHINGTON — Georgia officials will bar First Command Financial Planning from selling any insurance products for 90 days for what it says is a warning not to victimize military personnel again, according to the state’s insurance commissioner.
“Whenever we’re talking about taking advantage of our men and women in uniform, you’ve got to be pre-emptive and send a strong signal,” Commissioner John W. Oxendine said this week. “We’re saying, ‘When you sell insurance in Georgia, you’re not going to hurt our military.’”
The three-month suspension comes weeks after First Command agreed to pay an $8 million fine and refund about $4 million to customers who bought certain mutual funds from the firm between 1999 and 2004. Company officials did not admit to, or deny, the charges.
Federal regulators said they had found company salespeople misled military personnel about costs and returns in First Command’s systematic investment plans. The company has since stopped offering the funds.
The ruling did not involve any of the firm’s insurance products, but Oxendine said it did raise concerns among officials in his department that the company may have taken advantage of military personnel in other sales practices.
“This is a concerted effort to protect our soldiers, and to make sure [First Command] cleans up their act,” he said.
The suspension is scheduled to begin Feb. 1, and the company will be put on probation by the state for one year after that. First Command officials said they will appeal the decision.
“We are unaware that there has been any client or regulatory complaints regarding our insurance sales in the state of Georgia,” company spokesman Paul Cozby said in a statement. “No negative assertions were made by [federal regulators] regarding our insurance business.
“We applaud the efforts of any regulatory body to protect the interests of our servicemen and women. We look forward to discussing this matter with Georgia insurance officials and intend to cooperate with the Georgia department of insurance fully in resolving this matter.”
According to SEC estimates, about 40 percent of the current active duty general officers, about one-third of the commissioned officers, and about 16 percent of noncommissioned officers are customers of First Command. The firm’s client total is just under 300,000, and the majority of its sales agents are retired military officers.
Last week, Georgia insurance officials announced American-Amicable Life Insurance will pay about $1.3 million to more than 900 Georgia servicemembers who were sold policies while in training, which is prohibited under Department of Defense policies and Georgia insurance sales regulations.
