109TH CONGRESS 
1ST SESSION 
H. R. 458
AN ACT 
To prevent the sale of abusive insurance and investment 
products to military personnel, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Military Personnel Financial Services Protection Act’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows:
Sec. 1. Short title; table of contents. 
TITLE I—INSURANCE AND INVESTMENT PRODUCTS 
Sec. 101. Congressional findings. 
Sec. 102. Prohibition on future sales of periodic payment plans. 
Sec. 103. Method of maintaining broker/dealer registration, disciplinary, and 
other data. 
Sec. 104. Filing depositories for investment advisers. 
Sec. 105. State insurance and securities jurisdiction on military installations. 
Sec. 106. Required development of military personnel protection standards re-
garding insurance sales. 
Sec. 107. Required disclosures regarding life insurance. 
Sec. 108. Improving life insurance product standards. 
Sec. 109. Required reporting of disciplined insurance producers. 
Sec. 110. Reporting barred persons engaging in financial services activities. 
Sec. 111. Sense of Congress. 
Sec. 112. Definitions. 
TITLE II—LENDING TO ARMED FORCES PERSONNEL 
Sec. 201. Requirements applicable to certain loans to military servicemembers.
TITLE I—INSURANCE AND 
INVESTMENT PRODUCTS 
SEC. 101. CONGRESSIONAL FINDINGS. 
The Congress finds the following: 
(1) Our military personnel perform great sac-
rifices in protecting our Nation in the War on Ter-
ror and promoting democracy abroad. 
(2) Our brave men and women in uniform de-
serve to be offered first-rate financial products in 
order to provide for their families and to save and 
invest for retirement.
(3) Our military personnel are being offered 
high-cost securities and life insurance products by 
some financial services companies engaging in abu-
sive and misleading sales practices. 
(4) One securities product being offered to our 
service members, the contractual plan, has largely 
disappeared from the civilian market since the 1980s 
due to its excessive sales charges and the emergence 
of low-cost products. A 50-percent sales commission 
is typically assessed against the first year of con-
tributions made under a contractual plan, even 
though the average commission on other securities 
products such as mutual funds is less than 6 percent 
on each sale. 
(5) The excessive sales charge of the contrac-
tual plan makes it susceptible to abusive and mis-
leading sales practices. 
(6) Certain life insurance products being of-
fered to our service members are being improperly 
marketed as investment products. These products 
provide very low death benefits for very high pre-
miums that are front-loaded in the first few years, 
making them completely inappropriate for most mili-
tary personnel.
(7) Regulation of these securities and life insur-
ance products and their sale on military bases has 
been clearly inadequate and requires Congressional 
legislation to address. 
SEC. 102. PROHIBITION ON FUTURE SALES OF PERIODIC 
PAYMENT PLANS. 
(a) AMENDMENT.—Section 27 of the Investment 
Company Act of 1940 (15 U.S.C. 80a–27) is amended by 
adding at the end the following new subsection: 
‘‘(j) TERMINATION OF SALES.—
‘‘(1) TERMINATION.—Effective 30 days after 
the date of enactment of the Military Personnel Fi-
nancial Services Protection Act, it shall be unlawful, 
subject to subsection (i)—
‘‘(A) for any registered investment com-
pany to issue any periodic payment plan certifi-
cate; or 
‘‘(B) for such company, or any depositor of 
or underwriter for any such company, or any 
other person, to sell such a certificate. 
‘‘(2) NO INVALIDATION OF EXISTING CERTIFI-
CATES.—Paragraph (1) shall not be construed to 
alter, invalidate, or otherwise affect any rights or ob-
ligations, including rights of redemption, under any
periodic payment plan certificate issued and sold be-
fore 30 days after such date of enactment.’’. 
(b) TECHNICAL AMENDMENT.—Section 27(i)(2)(B) 
of such Act is amended by striking ‘‘section 26(e)’’ each 
place it appears and inserting ‘‘section 26(f)’’. 
(c) REPORT ON REFUNDS, SALES PRACTICES, AND 
REVENUES FROM PERIODIC PAYMENT PLANS.—Within 6 
months after the date of enactment of this Act, the Securi-
ties and Exchange Commission shall submit to the Com-
mittee on Financial Services of the House of Representa-
tives and the Committee on Banking, Housing, and Urban 
Affairs of the Senate, a report describing—
(1) any measures taken by a broker or dealer 
registered with the Securities and Exchange Com-
mission pursuant to section 15(b) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78o(b)) to volun-
tarily refund payments made by military service 
members on any periodic payment plan certificate, 
and the amounts of such refunds; 
(2) after such consultation with the Secretary 
of Defense as the Commission considers appropriate, 
the sales practices of such brokers or dealers on 
military installations over the past 5 years and any 
legislative or regulatory recommendations to improve 
such practices; and