‘‘(A) establish and maintain a system for 
collecting and retaining registration informa-
tion; 
‘‘(B) establish and maintain a toll-free tele-
phone listing, and a readily accessible electronic 
or other process, to receive and promptly respond 
to inquiries regarding—
‘‘(i) registration information on its 
members and their associated persons; and 
‘‘(ii) registration information on the 
members and their associated persons of 
any registered national securities exchange 
that uses the system described in subpara-
graph (A) for the registration of its mem-
bers and their associated persons; and 
‘‘(C) adopt rules governing the process for 
making inquiries and the type, scope, and pres-
entation of information to be provided in re-
sponse to such inquiries in consultation with 
any registered national securities exchange pro-
viding information pursuant to subparagraph 
(B)(ii). 
‘‘(2) RECOVERY OF COSTS.—Such an association 
may charge persons making inquiries, other than in-
dividual investors, reasonable fees for responses to 
such inquiries. 
‘‘(3) PROCESS FOR DISPUTED INFORMATION.—
Such an association shall adopt rules establishing an 
administrative process for disputing the accuracy of 
information provided in response to inquiries under 
this subsection in consultation with any registered 
national securities exchange providing information 
pursuant to paragraph (1)(B)(ii). 
‘‘(4) LIMITATION OF LIABILITY.—Such an asso-
ciation, or an exchange reporting information to such 
an association, shall not have any liability to any 
person for any actions taken or omitted in good faith 
under this subsection. 
‘‘(5) DEFINITION.—For purposes of this sub-
section, the term ‘registration information’ means the 
information reported in connection with the registra-
tion or licensing of brokers and dealers and their as-
sociated persons, including disciplinary actions, regu-
latory, judicial, and arbitration proceedings, and 
other information required by law, or exchange or as-
sociation rule, and the source and status of such in-
formation.’’.
SEC. 5. FILING DEPOSITORIES FOR INVESTMENT ADVISERS. 
(a) AMENDMENT.—Section 204 of the Investment Ad-
visers Act of 1940 (15 U.S.C. 80b-4) is amended—
(1) by striking ‘‘Every investment’’ and insert-
ing the following: ‘‘(a) IN GENERAL.—Every invest-
ment’’; and 
(2) by adding at the end the following: 
‘‘(b) FILING DEPOSITORIES.—The Commission may, 
by rule, require an investment adviser—
‘‘(1) to file with the Commission any fee, appli-
cation, report, or notice required to be filed by this 
title or the rules issued under this title through any 
entity designated by the Commission for that purpose; 
and 
‘‘(2) to pay the reasonable costs associated with 
such filing and the establishment and maintenance of 
the systems required by subsection (c). 
‘‘(c) ACCESS TO DISCIPLINARY AND OTHER INFORMA-
TION.—
‘‘(1) MAINTENANCE OF SYSTEM TO RESPOND TO 
INQUIRIES.—The Commission shall require the entity 
designated by the Commission under subsection (b)(1) 
to establish and maintain a toll-free telephone listing, 
or a readily accessible electronic or other process, to 
receive and promptly respond to inquiries regarding 
registration information (including disciplinary ac-
tions, regulatory, judicial, and arbitration pro-
ceedings, and other information required by law or 
rule to be reported) involving investment advisers and 
persons associated with investment advisers. 
‘‘(2) RECOVERY
OF
COSTS.—An entity des-
ignated by the Commission under subsection (b)(1) 
may charge persons making inquiries, other than in-
dividual investors, reasonable fees for responses to in-
quiries made under paragraph (1). 
‘‘(3) LIMITATION ON LIABILITY.—An entity des-
ignated by the Commission under subsection (b)(1) 
shall not have any liability to any person for any ac-
tions taken or omitted in good faith under this sub-
section.’’. 
(b) CONFORMING AMENDMENTS.—
(1) Section 203A of the Investment Advisers Act 
of 1940 (15 U.S.C. 80b-3a) is amended—
(A) by striking subsection (d); and 
(B) by redesignating subsection (e) as sub-
section (d). 
(2) Section 306 of the National Securities Mar-
kets Improvement Act of 1996 (15 U.S.C. 80b-10, 
note; P.L. 104–290; 110 Stat. 3439) is repealed.
SEC. 6. STATE INSURANCE JURISDICTION ON MILITARY IN-
STALLATIONS. 
(a) CLARIFICATION OF JURISDICTION.—Any law, reg-
ulation, or order of a State with respect to regulating the 
business of insurance shall apply to insurance activities 
conducted on Federal land or facilities in the United States 
and abroad, including military installations, except to the 
extent that such law, regulation, or order—
(1) directly conflicts with any applicable Federal 
law, regulation, or authorized directive; or 
(2) would not apply if such activity were con-
ducted on State land. 
(b) PRIMARY STATE JURISDICTION.—To the extent 
that multiple State laws would otherwise apply pursuant 
to subsection (a) to an insurance activity of an individual 
or entity on Federal land or facilities, the State having the 
primary duty to regulate such activity and whose laws shall 
apply to such activity in the case of a conflict shall be—
(1) the State within which the Federal land or 
facility is located; or 
(2) if the Federal land or facility is located out-
side of the United States, the State in which—
(A) in the case of an individual engaged in 
the business of insurance, such individual has 
been issued a resident license; or
(B) in the case of an entity engaged in the 
business of insurance, such entity is domiciled. 
SEC. 7. REQUIRED DEVELOPMENT OF MILITARY PER-
SONNEL PROTECTION STANDARDS REGARD-
ING INSURANCE SALES. 
(a) STATE STANDARDS.—The Congress intends that—
(1) the States collectively work with the Sec-
retary of Defense to ensure implementation of appro-
priate standards to protect members of the Armed 
Forces from dishonest and predatory insurance sales 
practices while on a military installation of the 
United States (including installations located outside 
of the United States); and 
(2) each State identify its role in promoting the 
standards described in paragraph (1) in a uniform 
manner within 12 months after the date of the enact-
ment of this Act. 
(b) STATE REPORT.—It is the sense of the Congress 
that the NAIC should, after consultation with the Secretary 
of Defense and within 12 months after the date of the enact-
ment of this Act, conduct a study to determine the extent 
to which the States have met the requirement of subsection 
(a) and report such study to the Committee on Financial 
Services of the House of Representatives and the Committee 
on Banking, Housing, and Urban Affairs of the Senate.
SEC. 8. REQUIRED DISCLOSURES REGARDING LIFE INSUR-
ANCE. 
(a) REQUIREMENT.—Except as provided in subsection 
(d), no insurer or producer may sell or solicit, in person, 
any life insurance product to any member of the Armed 
Forces on a military installation of the United States unless 
a disclosure in accordance with this section is provided to 
such member before the sale of such insurance. 
(b) DISCLOSURE.—A disclosure in accordance with 
this section is a written disclosure that—
(1) states that subsidized life insurance may be 
available to the member of the Armed Forces from the 
Federal Government; 
(2) states that the United States Government has 
in no way sanctioned, recommended, or encouraged 
the sale of the product being offered; 
(3) is made in plain and readily understandable 
language and in a type font at least as large as the 
font used for the majority of the policy; and 
(4) with respect to a sale or solicitation on Fed-
eral land or facilities located outside of the United 
States by an individual or entity engaged in the busi-
ness of insurance, except to the extent otherwise spe-
cifically provided by the laws of such State in ref-
erence to this Act, lists the address and phone number 
where consumer complaints are received by the State
insurance commissioner for the State in which the in-
dividual has been issued a resident license or the enti-
ty is domiciled, as applicable. 
(c) ENFORCEMENT.—If it is determined by a State or 
Federal agency, or in a final court proceeding, that any 
individual or entity has intentionally failed to provide a 
disclosure required by this section, such individual or entity 
shall be prohibited from further engaging in the business 
of insurance with respect to employees of the Federal Gov-
ernment on Federal land, except—
(1) with respect to existing policies; and 
(2) to the extent required by the Federal Govern-
ment pursuant to previous commitments. 
(d) EXCEPTIONS.—
(1) FEDERAL
AND
STATE
INSURANCE
ACTIV-
ITY.—This section shall not apply to insurance ac-
tivities—
(A) specifically contracted by or through the 
Federal Government or any State government; or 
(B) specifically exempted from the applica-
bility of this Act by a Federal or State law, reg-
ulation, or order that specifically refers to this 
paragraph. 
(2) UNIFORM STATE STANDARDS.—If a majority 
of the States have adopted, in materially identical
form, a standard setting forth the disclosures required 
under this section that apply to insurance solicita-
tions and sales to military personnel on military in-
stallations of the United States, after the expiration 
of the 2-year period beginning on such majority adop-
tion, such standard shall apply in lieu of the require-
ments of this section to all insurance solicitations and 
sales to military personnel on military installations, 
with respect to such States, to the extent that such 
standards do not directly conflict with any applicable 
authorized Federal regulation or directive. 
(3) MATERIALLY
IDENTICAL
FORM.—For pur-
poses of this subsection, standards adopted by more 
than one State shall be considered to have materially 
identical form to the extent that such standards re-
quire or prohibit identical conduct with respect to the 
same activity, notwithstanding that the standards 
may differ with respect to conduct required or prohib-
ited with respect to other activities. 
SEC. 9. IMPROVING LIFE INSURANCE PRODUCT STAND-
ARDS. 
(a) IN GENERAL.—It is the sense of the Congress that 
the NAIC should, after consultation with the Secretary of 
Defense and within 12 months after the date of the enact-
ment of this Act, conduct a study and submit a report to
the Committee on Financial Services of the House of Rep-
resentatives and the Committee on Banking, Housing, and 
Urban Affairs of the Senate on ways of improving the qual-
ity of and sale of life insurance products sold by insurers 
and producers on military installations of the United 
States, which may include limiting sales authority to com-
panies and producers that are certified as meeting appro-
priate best practices procedures or creating standards for 
products specifically designed for members of the Armed 
Forces regardless of the sales location. 
(b) CONDITIONAL GAO REPORT.—If the NAIC does 
not submit the report to the committees as described in sub-
section (a), the Comptroller General of the United States 
shall study any proposals that have been made to improve 
the quality and sale of life insurance products sold by insur-
ers and producers on military installations of the United 
States and report to the Committee on Financial Services 
of the House of Representatives and the Committee on 
Banking, Housing, and Urban Affairs of the Senate on such 
proposals within 6 months after the expiration of the period 
referred to in subsection (a). 
SEC. 10. REQUIRED REPORTING OF DISCIPLINED INSUR-
ANCE AGENTS. 
(a) REPORTING BY INSURERS.—After the expiration of 
the 2-year period beginning on the date of the enactment
of this Act, no insurer may enter into or renew a contrac-
tual relationship with a producer that solicits or sells life 
insurance on military installations of the United States un-
less the insurer has implemented a system to report, to the 
State insurance commissioner of the State of the domicile 
of the insurer and the State of residence of the insurance 
producer, disciplinary actions taken against the producer 
with respect to the producer’s sales or solicitation of insur-
ance on a military installation of the United States, as fol-
lows: 
(1) Any disciplinary action taken by any gov-
ernment entity that the insurer knows has been taken. 
(2) Any significant disciplinary action taken by 
the insurer. 
(b) REPORTING BY STATES.—It is the sense of the Con-
gress that within 2 years after the date of the enactment 
of this Act, the States should collectively implement a sys-
tem to—
(1) receive reports of disciplinary actions taken 
against insurance producers by insurers or govern-
ment entities with respect to the producers’ sale or so-
licitation of insurance on a military installation; and 
(2) disseminate such information to all other 
States and to the Secretary of Defense.
SEC. 11. REGISTRY OF BARRED INSURANCE AGENTS AND 
FINANCIAL ADVISORS. 
(a) ESTABLISHMENT.—The Secretary of Defense shall 
establish a registry of insurance agents and financial advi-
sors that have been barred or banned from doing business 
on any or all military installations of the United States. 
The registry shall be operational not later than the expira-
tion of the 90-day period beginning on the date of the enact-
ment of this Act. 
(b) UPDATING.—The Secretary shall update and 
maintain such registry in a manner that ensures the reg-
istry is at all times current and accessible. 
(c) REGISTRY.—The registry established under this 
section shall—
(1) include the name, address, and other identi-
fying information of each insurance agent or finan-
cial advisor that, at such time, is barred, banned, or 
otherwise limited in any manner that is not generally 
applicable to all such agents or advisors with respect 
to doing business on any or all military installations 
of the United States; and 
(2) be easily accessible and searchable by—
(A) appropriate personnel for purposes of 
enforcing any such bar, ban, or limitation; and
of this Act, the Secretary shall prepare and submit to 
the appropriate Committees a copy of the regulations 
under this subsection that are proposed to be pub-
lished for comment. The Secretary may not publish 
such regulations for comment in the Federal Register 
until the expiration of the 15-day period beginning 
upon such submission to the appropriate Committees. 
(3) FINAL
REGULATIONS.—Not later than 60 
days after the date of the enactment of this Act, the 
Secretary shall submit to the appropriate Committees 
a copy of the regulations under this section to be pub-
lished as final, which shall become effective upon the 
expiration of the 30-day period beginning upon sub-
mission to the appropriate Committees. 
(g) DEFINITIONS.—For purposes of this section: 
(1) APPROPRIATE COMMITTEES.—The term ‘‘ap-
propriate Committees’’ means—
(A) the Committee on Financial Services 
and the Committee on Armed Services of the 
House of Representatives; and 
(B) the Committee on Banking, Housing, 
and Urban Affairs and the Committee on Armed 
Services of the Senate.
(2) MILITARY INSTALLATION.—The term ‘‘mili-
tary installation of the United States’’ includes in-
stallations located outside of the United States. 
(3) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Defense. 
SEC. 12. SENSE OF CONGRESS. 
It is the sense of the Congress that the Federal and 
State agencies responsible for insurance and securities regu-
lation should provide advice to the appropriate Federal en-
tities to consider—
(1) significantly increasing the life insurance 
coverage made available through the Federal Govern-
ment to members of the Armed Forces; 
(2) implementing appropriate procedures to en-
courage members of the Armed Forces to improve 
their financial literacy and obtain objective financial 
counseling before purchasing additional life insurance 
coverage or investments beyond those provided by the 
Federal Government; and 
(3) improving the benefits and matching con-
tributions provided under the Thrift Savings Plan to 
members of the Armed Forces. 
SEC. 13. DEFINITIONS. 
For purposes of this Act, the following definitions shall 
apply:
(1) ENTITY.—The term ‘‘entity’’ includes insur-
ers. 
(2) INDIVIDUAL.—The term ‘‘individual’’ in-
cludes insurance agents and producers. 
(3) NAIC.—The term ‘‘NAIC’’ means the Na-
tional Association of Insurance Commissioners. 
(4) STATE
INSURANCE
COMMISSIONER.—The 
term ‘‘State insurance commissioner’’ means, with re-
spect to a State, the officer, agency, or other entity of 
the State that has primary regulatory authority over 
the business of insurance and over any person en-
gaged in the business of insurance, to the extent of 
such business activities, in such State.
Union Calendar No. 445
108TH CONGRESS 
2D SESSION 
H. R. 5011
[Report No. 108–725] 
A BILL 
To prevent the sale of abusive insurance and 
investment products to military personnel. 
OCTOBER 5, 2004
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed