IB 
Union Calendar No. 21 
109TH CONGRESS 
1ST SESSION 
H. R. 458 
[Report No. 109–40] 
To prevent the sale of abusive insurance and investment products to military 
personnel. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 1, 2005 
Mr. DAVIS of Kentucky (for himself, Mr. BAKER, Mr. SHIMKUS, Mr. GER-
LACH, Mr. FITZPATRICK of Pennsylvania, Mr. NORWOOD, Mr. RYUN of 
Kansas, and Mr. SHADEGG) introduced the following bill; which was re-
ferred to the Committee on Financial Services 
APRIL 13, 2005 
Additional sponsors: Mr. GILLMOR, Mr. PICKERING, Mr. NEUGEBAUER, Mr. 
ROGERS of Kentucky, Mr. FOLEY, Mrs. CAPITO, Mr. EDWARDS, Mr. 
CARTER, Ms. MOORE of Wisconsin, Ms. BEAN, Mr. LEWIS of Kentucky, 
and Mr. POMEROY 
APRIL 13, 2005 
Committed to the Committee of the Whole House on the State of the Union 
and ordered to be printed 
A BILL 
To prevent the sale of abusive insurance and investment 
products to military personnel. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Military Personnel Fi-
nancial Services Protection Act’’. 
SEC. 2. 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. 3. PROHIBITION ON FUTURE SALES OF PERIODIC PAY-
MENT 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)—