109TH CONGRESS

2D SESSION S. 418

AN ACT

To protect members of the Armed Forces from unscrupulous

practices regarding sales of insurance, financial, and investment products.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Military Personnel Financial Services Protection Act’’.
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1 (b) TABLE OF CONTENTS.—The table of contents for

2 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Congressional findings.

Sec. 3. Definitions.

Sec. 4. Prohibition on future sales of periodic payment plans.

Sec. 5. Required disclosures regarding offers or sales of securities on military

installations.

Sec. 6. Method of maintaining broker and dealer registration, disciplinary, and

other data.

Sec. 7. Filing depositories for investment advisers.

Sec. 8. State insurance and securities jurisdiction on military installations.

Sec. 9. Required development of military personnel protection standards regarding insurance sales; administrative coordination.

Sec. 10. Required disclosures regarding life insurance products.

Sec. 11. Improving life insurance product standards.

Sec. 12. Required reporting of disciplinary actions.

Sec. 13. Reporting barred persons selling insurance or securities.

Sec. 14. Study and reports by Inspector General of the Department of Defense.

3 SEC. 2. CONGRESSIONAL FINDINGS.

4 Congress finds that—

5 (1) members of the Armed Forces perform

6 great sacrifices in protecting our Nation in the War

7 on Terror;

8 (2) the brave men and women in uniform de9 serve to be offered first-rate financial products in

10 order to provide for their families and to save and

11 invest for retirement;

12 (3) members of the Armed Forces are being of13 fered high-cost securities and life insurance products

14 by some financial services companies engaging in

15 abusive and misleading sales practices;

16 (4) one securities product offered to service

17 members, known as the ‘‘mutual fund contractual
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1 plan’’, largely disappeared from the civilian market

2 in the 1980s, due to excessive sales charges;

3 (5) with respect to a mutual fund contractual

4 plan, a 50 percent sales commission is assessed

5 against the first year of contributions, despite an av6 erage commission on other securities products of less

7 than 6 percent on each sale;

8 (6) excessive sales charges allow abusive and

9 misleading sales practices in connection with mutual

10 fund contractual plan;

11 (7) certain life insurance products being offered

12 to members of the Armed Forces are improperly

13 marketed as investment products, providing minimal

14 death benefits in exchange for excessive premiums

15 that are front-loaded in the first few years, making

16 them entirely inappropriate for most military per17 sonnel; and

18 (8) the need for regulation of the marketing

19 and sale of securities and life insurance products on

20 military bases necessitates Congressional action.

21 SEC. 3. DEFINITIONS.

22 For purposes of this Act, the following definitions

23 shall apply:

24 (1) LIFE INSURANCE PRODUCT.—
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1 (A) IN GENERAL.—The term ‘‘life insur2 ance product’’ means any product, including in3 dividual and group life insurance, funding

4 agreements, and annuities, that provides insur5 ance for which the probabilities of the duration

6 of human life or the rate of mortality are an

7 element or condition of insurance.

8 (B) INCLUDED INSURANCE.—The term

9 ‘‘life insurance product’’ includes the granting

10 of—

11 (i) endowment benefits;

12 (ii) additional benefits in the event of

13 death by accident or accidental means;

14 (iii) disability income benefits;

15 (iv) additional disability benefits that

16 operate to safeguard the contract from

17 lapse or to provide a special surrender

18 value, or special benefit in the event of

19 total and permanent disability;

20 (v) benefits that provide payment or

21 reimbursement for long-term home health

22 care, or long-term care in a nursing home

23 or other related facility;

24 (vi) burial insurance; and
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1 (vii) optional modes of settlement or

2 proceeds of life insurance.

3 (C) EXCLUSIONS.—Such term does not in4 clude workers compensation insurance, medical

5 indemnity health insurance, or property and

6 casualty insurance.

7 (2) NAIC.—The term ‘‘NAIC’’ means the Na8 tional Association of Insurance Commissioners (or

9 any successor thereto).

10 SEC. 4. PROHIBITION ON FUTURE SALES OF PERIODIC PAY11 MENT PLANS.

12 (a) AMENDMENT.—Section 27 of the Investment

13 Company Act of 1940 (15 U.S.C. 80a–27) is amended by

14 adding at the end the following new subsection:

15 ‘‘(j) TERMINATION OF SALES.—

16 ‘‘(1) TERMINATION.—Effective 30 days after

17 the date of enactment of the Military Personnel Fi18 nancial Services Protection Act, it shall be unlawful,

19 subject to subsection (i)—

20 ‘‘(A) for any registered investment com21 pany to issue any periodic payment plan certifi22 cate; or

23 ‘‘(B) for such company, or any depositor of

24 or underwriter for any such company, or any

25 other person, to sell such a certificate.
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1 ‘‘(2) NO INVALIDATION OFEXISTING CERTIFI2 CATES.—Paragraph (1) shall not be construed to

3 alter, invalidate, or otherwise affect any rights or ob4 ligations, including rights of redemption, under any

5 periodic payment plan certificate issued and sold be6 fore 30 days after such date of enactment.’’.

7 (b) TECHNICAL AMENDMENT.—Section 27(i)(2)(B)

8 of the Investment Company Act of 1940 (15 U.S.C. 80a–

9 27(i)(2)(B)) is amended by striking ‘‘section 26(e)’’ each

10 place that term appears and inserting ‘‘section 26(f)’’.

11 (c) REPORT ON REFUNDS, SALES PRACTICES, AND

12 REVENUES FROM PERIODIC PAYMENT PLANS.—Not later

13 than 6 months after the date of enactment of this Act,

14 the Securities and Exchange Commission shall submit to

15 the Committee on Financial Services of the House of Rep16 resentatives and the Committee on Banking, Housing, and

17 Urban Affairs of the Senate, a report describing—

18 (1) any measures taken by a broker or dealer

19 registered with the Securities and Exchange Com20 mission pursuant to section 15(b) of the Securities

21 Exchange Act of 1934 (15 U.S.C. 78o(b)) to volun22 tarily refund payments made by military service

23 members on any periodic payment plan certificate,

24 and the amounts of such refunds;
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1 (2) after such consultation with the Secretary

2 of Defense, as the Commission considers appro3 priate, the sales practices of such brokers or dealers

4 on military installations over the 5 years preceding

5 the date of submission of the report and any legisla6 tive or regulatory recommendations to improve such

7 practices; and

8 (3) the revenues generated by such brokers or

9 dealers in the sales of periodic payment plan certifi10 cates over the 5 years preceding the date of submis11 sion of the report, and the products marketed by

12 such brokers or dealers to replace the revenue gen13 erated from the sales of periodic payment plan cer14 tificates prohibited under subsection (a).

15 SEC. 5. REQUIRED DISCLOSURES REGARDING OFFERS OR

16 SALES OF SECURITIES ON MILITARY INSTAL17 LATIONS.

18 Section 15A(b) of the Securities Exchange Act of

19 1934 (15 U.S.C. 78o-3(b)) is amended by inserting imme20 diately after paragraph (13) the following:

21 ‘‘(14) The rules of the association include provi22 sions governing the sales, or offers of sales, of secu23 rities on the premises of any military installation to

24 any member of the Armed Forces or a dependent

25 thereof, which rules require—
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1 ‘‘(A) the broker or dealer performing bro2 kerage services to clearly and conspicuously dis3 close to potential investors—

4 ‘‘(i) that the securities offered are not

5 being offered or provided by the broker or

6 dealer on behalf of the Federal Govern7 ment, and that its offer is not sanctioned,

8 recommended, or encouraged by the Fed9 eral Government; and

10 ‘‘(ii) the identity of the registered

11 broker-dealer offering the securities;

12 ‘‘(B) such broker or dealer to perform an

13 appropriate suitability determination, including

14 consideration of costs and knowledge about se15 curities, prior to making a recommendation of

16 a security to a member of the Armed Forces or

17 a dependent thereof; and

18 ‘‘(C) that no person receive any referral fee

19 or incentive compensation in connection with a

20 sale or offer of sale of securities, unless such

21 person is an associated person of a registered

22 broker or dealer and is qualified pursuant to

23 the rules of a self-regulatory organization.’’.
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1 SEC. 6. METHOD OF MAINTAINING BROKER AND DEALER

2 REGISTRATION, DISCIPLINARY, AND OTHER

3 DATA.

4 Section 15A(i) of the Securities Exchange Act of

5 1934 (15 U.S.C. 78o–3(i)) is amended to read as follows:

6 ‘‘(i) OBLIGATION TO MAINTAIN REGISTRATION, DIS7 CIPLINARY, AND OTHER DATA.—

8 ‘‘(1) MAINTENANCE OFSYSTEM TO RESPOND

9 TO INQUIRIES.—A registered securities association

10 shall—

11 ‘‘(A) establish and maintain a system for

12 collecting and retaining registration informa13 tion;

14 ‘‘(B) establish and maintain a toll-free

15 telephone listing, and a readily accessible elec16 tronic or other process, to receive and promptly

17 respond to inquiries regarding—

18 ‘‘(i) registration information on its

19 members and their associated persons; and

20 ‘‘(ii) registration information on the

21 members and their associated persons of

22 any registered national securities exchange

23 that uses the system described in subpara24 graph (A) for the registration of its mem25 bers and their associated persons; and
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1 ‘‘(C) adopt rules governing the process for

2 making inquiries and the type, scope, and pres3 entation of information to be provided in re4 sponse to such inquiries in consultation with

5 any registered national securities exchange pro6 viding information pursuant to subparagraph

7 (B)(ii).

8 ‘‘(2) RECOVERY OFCOSTS.—A registered secu9 rities association may charge persons making inquir10 ies described in paragraph (1)(B), other than indi11 vidual investors, reasonable fees for responses to

12 such inquiries.

13 ‘‘(3) PROCESS FOR DISPUTED INFORMATION.—

14 Each registered securities association shall adopt

15 rules establishing an administrative process for dis16 puting the accuracy of information provided in re17 sponse to inquiries under this subsection in consulta18 tion with any registered national securities exchange

19 providing information pursuant to paragraph

20 (1)(B)(ii).

21 ‘‘(4) LIMITATION ON LIABILITY.—A registered

22 securities association, or an exchange reporting in23 formation to such an association, shall not have any

24 liability to any person for any actions taken or omit25 ted in good faith under this subsection.
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1 ‘‘(5) DEFINITION.—For purposes of this sub2 section, the term ‘registration information’ means

3 the information reported in connection with the reg4 istration or licensing of brokers and dealers and

5 their associated persons, including disciplinary ac6 tions, regulatory, judicial, and arbitration pro7 ceedings, and other information required by law, or

8 exchange or association rule, and the source and sta9 tus of such information.’’.

10 SEC. 7. FILING DEPOSITORIES FOR INVESTMENT ADVIS11 ERS.

12 (a) INVESTMENT ADVISERS.—Section 204 of the In13 vestment Advisers Act of 1940 (15 U.S.C. 80b–4) is

14 amended—

15 (1) by striking ‘‘Every investment’’ and insert16 ing the following:

17 ‘‘(a) IN GENERAL.—Every investment’’; and

18 (2) by adding at the end the following:

19 ‘‘(b) FILING DEPOSITORIES.—The Commission may,

20 by rule, require an investment adviser—

21 ‘‘(1) to file with the Commission any fee, appli22 cation, report, or notice required to be filed by this

23 title or the rules issued under this title through any

24 entity designated by the Commission for that pur25 pose; and
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1 ‘‘(2) to pay the reasonable costs associated with

2 such filing and the establishment and maintenance

3 of the systems required by subsection (c).

4 ‘‘(c) ACCESS TO DISCIPLINARY AND OTHER INFOR5 MATION.—

6 ‘‘(1) MAINTENANCE OFSYSTEM TO RESPOND

7 TO INQUIRIES.—

8 ‘‘(A) IN GENERAL.—The Commission shall

9 require the entity designated by the Commis10 sion under subsection (b)(1) to establish and

11 maintain a toll-free telephone listing, or a read12 ily accessible electronic or other process, to re13 ceive and promptly respond to inquiries regard14 ing registration information (including discipli15 nary actions, regulatory, judicial, and arbitra16 tion proceedings, and other information re17 quired by law or rule to be reported) involving

18 investment advisers and persons associated with

19 investment advisers.

20 ‘‘(B) APPLICABILITY.—This subsection

21 shall apply to any investment adviser (and the

22 persons associated with that adviser), whether

23 the investment adviser is registered with the

24 Commission under section 203 or regulated

25 solely by a State, as described in section 203A.
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1 ‘‘(2) RECOVERY OFCOSTS.—An entity des2 ignated by the Commission under subsection (b)(1)

3 may charge persons making inquiries, other than in4 dividual investors, reasonable fees for responses to

5 inquiries described in paragraph (1).

6 ‘‘(3) LIMITATION ON LIABILITY.—An entity

7 designated by the Commission under subsection

8 (b)(1) shall not have any liability to any person for

9 any actions taken or omitted in good faith under

10 this subsection.’’.

11 (b) CONFORMING AMENDMENTS.—

12 (1) INVESTMENT ADVISERS ACT OF1940.—Sec13 tion 203A of the Investment Advisers Act of 1940

14 (15 U.S.C. 80b–3a) is amended—

15 (A) by striking subsection (d); and

16 (B) by redesignating subsection (e) as sub17 section (d).

18 (2) NATIONAL SECURITIES MARKETS IMPROVE19 MENT ACT OF1996.—Section 306 of the National

20 Securities Markets Improvement Act of 1996 (15

21 U.S.C. 80b–10, note) is repealed.

22 SEC. 8. STATE INSURANCE AND SECURITIES JURISDICTION

23 ON MILITARY INSTALLATIONS.

24 (a) CLARIFICATION OF JURISDICTION.—Any provi25 sion of law, regulation, or order of a State with respect
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1 to regulating the business of insurance or securities shall

2 apply to insurance or securities activities conducted on

3 Federal land or facilities in the United States and abroad,

4 including military installations, except to the extent that

5 such law, regulation, or order—

6 (1) directly conflicts with any applicable Fed7 eral law, regulation, or authorized directive; or

8 (2) would not apply if such activity were con9 ducted on State land.

10 (b) PRIMARY STATE JURISDICTION.—To the extent

11 that multiple State laws would otherwise apply pursuant

12 to subsection (a) to an insurance or securities activity of

13 an individual or entity on Federal land or facilities, the

14 State having the primary duty to regulate such activity

15 and the laws of which shall apply to such activity in the

16 case of a conflict shall be—

17 (1) the State within which the Federal land or

18 facility is located; or

19 (2) if the Federal land or facility is located out20 side of the United States, the State in which—

21 (A) in the case of an individual engaged in

22 the business of insurance, such individual has

23 been issued a resident license;

24 (B) in the case of an entity engaged in the

25 business of insurance, such entity is domiciled;
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1 (C) in the case of an individual engaged in

2 the offer or sale (or both) of securities, such in3 dividual is registered or required to be reg4 istered to do business or the person solicited by

5 such individual resides; or

6 (D) in the case of an entity engaged in the

7 offer or sale (or both) of securities, such entity

8 is registered or is required to be registered to

9 do business or the person solicited by such enti10 ty resides.

11 SEC. 9. REQUIRED DEVELOPMENT OF MILITARY PER12 SONNEL PROTECTION STANDARDS REGARD13 ING INSURANCE SALES; ADMINISTRATIVE CO14 ORDINATION.

15 (a) STATE STANDARDS.—Congress intends that—

16 (1) the States collectively work with the Sec17 retary of Defense to ensure implementation of ap18 propriate standards to protect members of the

19 Armed Forces from dishonest and predatory insur20 ance sales practices while on a military installation

21 of the United States (including installations located

22 outside of the United States); and

23 (2) each State identify its role in promoting the

24 standards described in paragraph (1) in a uniform
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1 manner, not later than 12 months after the date of

2 enactment of this Act.

3 (b) STATE REPORT.—It is the sense of Congress that

4 the NAIC should, after consultation with the Secretary of

5 Defense and, not later than 12 months after the date of

6 enactment of this Act, conduct a study to determine the

7 extent to which the States have met the requirement of

8 subsection (a), and report the results of such study to the

9 Committee on Financial Services of the House of Rep10 resentatives and the Committee on Banking, Housing, and

11 Urban Affairs of the Senate.

12 (c) ADMINISTRATIVE COORDINATION; SENSE OF

13 CONGRESS.—It is the sense of the Congress that senior

14 representatives of the Secretary of Defense, the Securities

15 and Exchange Commission, and the NAIC should meet

16 not less frequently than twice a year to coordinate their

17 activities to implement this Act and monitor the enforce18 ment of relevant regulations relating to the sale of finan19 cial products on military installations of the United States.

20 SEC. 10. REQUIRED DISCLOSURES REGARDING LIFE INSUR21 ANCE PRODUCTS.

22 (a) REQUIREMENT.—Except as provided in sub23 section (e), no person may sell, or offer for sale, any life

24 insurance product to any member of the Armed Forces

25 or a dependent thereof on a military installation of the
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1 United States, unless a disclosure in accordance with this

2 section is provided to such member or dependent at the

3 time of the sale or offer.

4 (b) DISCLOSURE.—A disclosure in accordance with

5 this section is a written disclosure that—

6 (1) states that subsidized life insurance is avail7 able to the member of the Armed Forces from the

8 Federal Government under the Servicemembers’

9 Group Life Insurance program (also referred to as

10 ‘‘SGLI’’), under subchapter III of chapter 19 of title

11 38, United States Code;

12 (2) states the amount of insurance coverage

13 available under the SGLI program, together with the

14 costs to the member of the Armed Forces for such

15 coverage;

16 (3) states that the life insurance product that

17 is the subject of the disclosure is not offered or pro18 vided by the Federal Government, and that the Fed19 eral Government has in no way sanctioned, rec20 ommended, or encouraged the sale of the life insur21 ance product being offered;

22 (4) fully discloses any terms and circumstances

23 under which amounts accumulated in a savings fund

24 or savings feature under the life insurance product

25 that is the subject of the disclosure may be diverted
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1 to pay, or reduced to offset, premiums due for con2 tinuation of coverage under such product;

3 (5) states that no person has received any refer4 ral fee or incentive compensation in connection with

5 the offer or sale of the life insurance product, unless

6 such person is a licensed agent of the person en7 gaged in the business of insurance that is issuing

8 such product;

9 (6) is made in plain and readily understandable

10 language and in a type font at least as large as the

11 font used for the majority of the solicitation material

12 used with respect to or relating to the life insurance

13 product; and

14 (7) with respect to a sale or solicitation on Fed15 eral land or facilities located outside of the United

16 States, lists the address and phone number at which

17 consumer complaints are received by the State insur18 ance commissioner for the State having the primary

19 jurisdiction and duty to regulate the sale of such life

20 insurance products pursuant to section 8.

21 (c) VOIDABILITY.—The sale of a life insurance prod22 uct in violation of this section shall be voidable from its

23 inception, at the sole option of the member of the Armed

24 Forces, or dependent thereof, as applicable, to whom the

25 product was sold.
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1 (d) ENFORCEMENT.—If it is determined by a Federal

2 or State agency, or in a final court proceeding, that any

3 person has intentionally violated, or willfully disregarded

4 the provisions of, this section, in addition to any other

5 penalty under applicable Federal or State law, such person

6 shall be prohibited from further engaging in the business

7 of insurance with respect to employees of the Federal Gov8 ernment on Federal land, except—

9 (1) with respect to existing policies; and

10 (2) to the extent required by the Federal Gov11 ernment pursuant to previous commitments.

12 (e) EXCEPTIONS.—This section shall not apply to any

13 life insurance product specifically contracted by or

14 through the Federal Government.

15 SEC. 11. IMPROVING LIFE INSURANCE PRODUCT STAND16 ARDS.

17 (a) IN GENERAL.—It is the sense of Congress that

18 the NAIC should, after consultation with the Secretary of

19 Defense, and not later than 6 months after the date of

20 enactment of this Act, conduct a study and submit a re21 port to the Committee on Banking, Housing, and Urban

22 Affairs of the Senate and the Committee on Financial

23 Services of the House of Representatives on—
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1 (1) ways of improving the quality of and sale of

2 life insurance products sold on military installations

3 of the United States, which may include—

4 (A) limiting such sales authority to persons

5 that are certified as meeting appropriate best

6 practices procedures; and

7 (B) creating standards for products spe8 cifically designed to meet the particular needs

9 of members of the Armed Forces, regardless of

10 the sales location; and

11 (2) the extent to which life insurance products

12 marketed to members of the Armed Forces comply

13 with otherwise applicable provisions of State law.

14 (b) CONDITIONAL GAO REPORT.—If the NAIC does

15 not submit the report as described in subsection (a), the

16 Comptroller General of the United States shall—

17 (1) study any proposals that have been made to

18 improve the quality of and sale of life insurance

19 products sold on military installations of the United

20 States; and

21 (2) not later than 6 months after the expiration

22 of the period referred to in subsection (a), submit a

23 report on such proposals to the Committee on Bank24 ing, Housing, and Urban Affairs of the Senate and
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1 the Committee on Financial Services of the House of

2 Representatives.

3 SEC. 12. REQUIRED REPORTING OF DISCIPLINARY AC4 TIONS.

5 (a) REPORTING BY INSURERS.—Beginning 1 year

6 after the date of enactment of this Act, no insurer may

7 enter into or renew a contractual relationship with any

8 other person that sells or solicits the sale of any life insur9 ance product on any military installation of the United

10 States, unless the insurer has implemented a system to

11 report to the State insurance commissioner of the State

12 of domicile of the insurer and the State of residence of

13 that other person—

14 (1) any disciplinary action taken by any Fed15 eral or State government entity with respect to sales

16 or solicitations of life insurance products on a mili17 tary installation that the insurer knows, or in the ex18 ercise of due diligence should have known, to have

19 been taken; and

20 (2) any significant disciplinary action taken by

21 the insurer with respect to sales or solicitations of

22 life insurance products on a military installation of

23 the United States.

24 (b) REPORTING BY STATES.—It is the sense of Con25 gress that, not later than 1 year after the date of enact-
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1 ment of this Act, the States should collectively implement

2 a system to—

3 (1) receive reports of disciplinary actions taken

4 against persons that sell or solicit the sale of any life

5 insurance product on any military installation of the

6 United States by insurers or Federal or State gov7 ernment entities with respect to such sales or solici8 tations; and

9 (2) disseminate such information to all other

10 States and to the Secretary of Defense.

11 (c) DEFINITION.—As used in this section, the term

12 ‘‘insurer’’ means a person engaged in the business of in13 surance.

14 SEC. 13. REPORTING BARRED PERSONS SELLING INSUR15 ANCE OR SECURITIES.

16 (a) ESTABLISHMENT.—The Secretary of Defense

17 shall maintain a list of the name, address, and other ap18 propriate information relating to persons engaged in the

19 business of securities or insurance that have been barred

20 or otherwise limited in any manner that is not generally

21 applicable to all such type of persons, from any or all mili22 tary installations of the United States, or that have en23 gaged in any transaction that is prohibited by this Act.

24 (b) NOTICE AND ACCESS.—The Secretary of Defense

25 shall ensure that—
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1 (1) the appropriate Federal and State agencies

2 responsible for securities and insurance regulation

3 are promptly notified upon the inclusion in or re4 moval from the list required by subsection (a) of a

5 person under the jurisdiction of one or more of such

6 agencies; and

7 (2) the list is kept current and easily

8 accessible—

9 (A) for use by such agencies; and

10 (B) for purposes of enforcing or consid11 ering any such bar or limitation by the appro12 priate Federal personnel, including commanders

13 of military installations.

14 (c) REGULATIONS.—

15 (1) IN GENERAL.—The Secretary of Defense

16 shall issue regulations in accordance with this sub17 section to provide for the establishment and mainte18 nance of the list required by this section, including

19 appropriate due process considerations.

20 (2) TIMING.—

21 (A) PROPOSED REGULATIONS.—Not later

22 than the expiration of the 60-day period begin23 ning on the date of enactment of this Act, the

24 Secretary of Defense shall prepare and submit

25 to the appropriate Committees of Congress a
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1 copy of the regulations required by this sub2 section that are proposed to be published for

3 comment. The Secretary may not publish such

4 regulations for comment in the Federal Reg5 ister until the expiration of the 15-day period

6 beginning on the date of such submission to the

7 appropriate Committees of Congress.

8 (B) FINAL REGULATIONS.—Not later than

9 90 days after the date of enactment of this Act,

10 the Secretary of Defense shall submit to the ap11 propriate Committees of Congress a copy of the

12 regulations under this section to be published in

13 final form.

14 (C) EFFECTIVE DATE.—Final regulations

15 under this paragraph shall become effective 30

16 days after the date of their submission to the

17 appropriate Committees of Congress under sub18 paragraph (B).

19 (d) DEFINITION.—For purposes of this section, the

20 term ‘‘appropriate Committees of Congress’’ means—

21 (1) the Committee on Financial Services and

22 the Committee on Armed Services of the House of

23 Representatives; and
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1 (2) the Committee on Banking, Housing, and

2 Urban Affairs and the Committee on Armed Serv3 ices of the Senate.

4 SEC. 14. STUDY AND REPORTS BY INSPECTOR GENERAL OF

5 THE DEPARTMENT OF DEFENSE.

6 (a) STUDY.—The Inspector General of the Depart7 ment of Defense shall conduct a study on the impact of

8 Department of Defense Instruction 1344.07 (as in effect

9 on the date of enactment of this Act) and the reforms in10 cluded in this Act on the quality and suitability of sales

11 of securities and insurance products marketed or other12 wise offered to members of the Armed Forces.

13 (b) REPORTS.—Not later than 12 months after the

14 date of enactment of this Act, the Inspector General of

15 the Department of Defense shall submit an initial report

16 on the results of the study conducted under subsection (a)

17 to the Committee on Banking, Housing, and Urban Af18 fairs of the Senate and the Committee on Financial Serv19 ices of the House of Representatives, and shall submit fol-
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1 lowup reports to those committees on December 31, 2008

2 and December 31, 2010.

Passed the Senate July 19, 2006.

Attest:

Secretary.
109TH CONGRESS

2D SESSION S. 418

AN ACT

To protect members of the Armed Forces from unfinancial, and investment products. scrupulous practices regarding sales of insurance,