Mideast edition, Sunday, June 10, 2007

WASHINGTON — Insurance companies would face strict rules when selling policies to young enlisted servicemembers under new rules drafted by state insurance commissioners week.

The guidelines prohibit insurers from visiting barracks or base hangouts to sell policies, using gifts and other troops to market policies to enlisted personnel, and misleading troops about their existing benefits through the Servicemembers Group Life Insurance program.

Officials from the National Association of Insurance Commissioners, who drafted the guidelines in response to problems with sales to servicemembers, said they hope the rules become the standard for all insurance sales to military personnel worldwide.

“Companies are selling products to soldiers that they just don’t need,” said John Oxendine, Georgia insurance commissioner and spokesman for the NAIC’s military affairs committee. “If we can get these regulations enforced throughout the country, we can put these products out of business.”

Most of the rules are designed to offer extra protections to personnel E-4 and below. Oxendine said those servicemembers often have less financial savvy than their older counterparts, and have been taken advantage of in the past.

“The things that make them good soldiers — doing what you’re told, following orders — are also what allow people to take advantage of them,” he said. “These kids don’t know what they’re buying, and they don’t ask questions.”

Congress last year mandated states develop standards for military insurance sales after a series of news article last year chronicled members of the military tricked into buying redundant life insurance, purchasing policies they thought were savings accounts, and being pressured by commanding officers into company’s sales pitches.

The NAIC worked with Defense Department officials over the last six months developing the new standards, and Oxendine said both sides will work with state officials for the rest of the year to get the rules passed into law.

None of the rules would affect the existing Servicemembers Group Life Insurance program, only certain types of commercial insurance policies.

Under the guidelines any U.S. company illegally marketing or selling policies on overseas bases could be prosecuted in the state where it is headquartered. Oxendine said foreign insurance companies would not be covered, but those rarely have targeted U.S. servicemembers in the past.

He also added that he expects most states to quickly embrace the rules, adding that he already has begun discussions with Georgia officials.

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