10 U.S.C. § 992: Financial literacy training: financial services

financial services that are available under law to members; financial services that are routinely offered by private sector sources to members; practices relating to the marketing of private sector financial services to members; such other matters relating to financial services available to members, and the marketing of financial services to members, as the Secretary considers appropriate; and such other financial practices as the Secretary considers appropriate. as a component of the initial entry training of the member; upon arrival at the first duty station of the member; upon arrival at each subsequent duty station, in the case of a member in pay grade E–6 or below or in pay grade O–3 or below; when the member vests in the Thrift Savings Plan (TSP) under section 8432(g)(2)(C) of title 5 ; when the member becomes entitled to receive continuation pay under section 356 of title 37 , at which time the training shall include, at a minimum, information on options available to the member regarding the use of continuation pay; marriage; divorce; birth of first child; or disabling sickness or condition; during leadership training; during pre-deployment training and during post-deployment training; transition from a regular component to a reserve component; separation from service; or retirement; and as a component of periodically recurring required training that is provided to the member at a military installation. The training provided at a military installation under paragraph (2)(J) shall include information on any financial services marketing practices that are particularly prevalent at that military installation and in the vicinity. The Secretary concerned shall prescribe regulations setting forth any other events and circumstances (in addition to the events and circumstances described in paragraph (2)) upon which the training required by this subsection shall be provided. The Secretary concerned shall, upon request, provide counseling on financial services to each member of the armed forces, and such member’s spouse, under the jurisdiction of the Secretary. shall provide counseling on financial services under this subsection through a full-time financial services counselor at such installation; through members of the armed forces in pay grade E–7 or above, or civilians, who provide such counseling as part of their other duties for the armed forces or the Department of Defense; by contract, including contract for services by telephone and by the Internet; or through qualified representatives of nonprofit organizations and agencies under formal agreements with the Department of Defense to provide such counseling; and may not provide financial services through any individual unless such individual agrees to submit financial disclosures annually to the Secretary. In the case of any military installation not described in subparagraph (A), the Secretary concerned shall provide counseling on financial services under this subsection at such installation in accordance with the requirements established under subparagraph (A)(ii) and (iii). Each financial services counselor under paragraph (2)(A)(i), and any other individual providing counseling on financial services under paragraph (2), shall be an individual who, by reason of education, training, or experience, is qualified to provide helpful counseling to members of the armed forces and their spouses on financial services and marketing practices described in subsection (a)(1). Such individual may be a member of the armed forces or an employee of the Federal Government. The Secretary concerned shall take such action as is necessary to ensure that each financial services counselor under paragraph (2)(A)(i), and any other individual providing counseling on financial services under paragraphs (2), is free from conflicts of interest relevant to the performance of duty under this section and, in the performance of that duty, is dedicated to furnishing members of the armed forces and their spouses with helpful information and counseling on financial services and related marketing practices. In carrying out the requirements of subparagraph (A), the Secretary concerned shall establish a requirement that each financial services counselor under paragraph (2)(A)(i), and any other individual providing counseling on financial services under paragraph (2), submit financial disclosures annually to the Secretary. The Secretary concerned shall review all financial disclosures submitted pursuant to subparagraph (B) to ensure the counselor, or the individual providing counseling, is free from conflict as required under this paragraph. If the Secretary concerned determines that a financial services counselor under paragraph (2)(A)(i), or any other individual providing counseling on financial services under paragraph (2), is not free from conflict as required under this paragraph, the Secretary shall ensure that the counselor, or the individual providing counseling, does not provide such services until such time as the Secretary determines that such conflict is resolved. In counseling a member of the armed forces, or spouse of a member of the armed forces, under this section regarding life insurance offered by a private sector source, a financial services counselor under subsection (b)(2)(A)(i), or another individual providing counseling on financial services under subsection (b)(2), shall furnish the member or spouse, as the case may be, with information on the availability of Servicemembers’ Group Life Insurance under subchapter III of chapter 19 of title 38, including information on the amounts of coverage available and the procedures for electing coverage and the amount of coverage. all forms relating to retirement that are relevant to the member, including with respect to the Thrift Savings Plan; and information with respect to how to find additional information. The Director of the Defense Manpower Data Center shall annually include in the status of forces survey a survey of the status of the financial literacy and preparedness of members of the armed forces. shall be used by each of the Secretaries concerned as a benchmark to evaluate and update training provided under this section; and shall be submitted to the Committees on Armed Services of the Senate and the House of Representatives. Life insurance, casualty insurance, and other insurance. Investments in securities or financial instruments. Banking, credit, loans, deferred payment plans, and mortgages. Health insurance, budget management, Thrift Savings Plan (TSP), retirement lump sum payments (including rollover options and tax consequences), and Survivor Benefit Plan (SBP). The Secretary of Defense shall develop and implement a program to advise members of the Armed Forces (including members of the National Guard and Reserve) who are returning from service on active duty abroad (including service in Operation Iraqi Freedom and Operation Enduring Freedom) on actions to be taken by such members to prevent or forestall mortgage foreclosures. Credit counseling. Home mortgage counseling. Such other counseling and information as the Secretary considers appropriate for purposes of the program. Counseling and other information under the program required by subsection (a) shall be provided to a member of the Armed Forces covered by the program as soon as practicable after the return of the member from service as described in subsection (a).” This Act may be cited as the ‘Military Personnel Financial Services Protection Act’. members of the Armed Forces perform great sacrifices in protecting our Nation in the War on Terror; the brave men and women in uniform deserve to be offered first-rate financial products in order to provide for their families and to save and invest for retirement; members of the Armed Forces are being offered high-cost securities and life insurance products by some financial services companies engaging in abusive and misleading sales practices; one securities product offered to service members, known as the ‘mutual fund contractual plan’, largely disappeared from the civilian market in the 1980s, due to excessive sales charges; with respect to a mutual fund contractual plan, a 50 percent sales commission is assessed against the first year of contributions, despite an average commission on other securities products of less than 6 percent on each sale; excessive sales charges allow abusive and misleading sales practices in connection with mutual fund contractual plan; certain life insurance products being offered to members of the Armed Forces are improperly marketed as investment products, providing minimal death benefits in exchange for excessive premiums that are front-loaded in the first few years, making them entirely inappropriate for most military personnel; and the need for regulation of the marketing and sale of securities and life insurance products on military bases necessitates Congressional action. The term ‘life insurance product’ means any product, including individual and group life insurance, funding agreements, and annuities, that provides insurance for which the probabilities of the duration of human life or the rate of mortality are an element or condition of insurance. endowment benefits; additional benefits in the event of death by accident or accidental means; disability income benefits; additional disability benefits that operate to safeguard the contract from lapse or to provide a special surrender value, or special benefit in the event of total and permanent disability; benefits that provide payment or reimbursement for long-term home health care, or long-term care in a nursing home or other related facility; burial insurance; and optional modes of settlement or proceeds of life insurance. Such term does not include workers compensation insurance, medical indemnity health insurance, or property and casualty insurance. The term ‘NAIC’ means the National Association of Insurance Commissioners (or any successor thereto). any measures taken by a broker or dealer registered with the Securities and Exchange Commission pursuant to section 15(b) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78 o (b)) to voluntarily refund payments made by military service members on any periodic payment plan certificate, and the amounts of such refunds; 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 5 years preceding the date of submission of the report and any legislative or regulatory recommendations to improve such practices; and the revenues generated by such brokers or dealers in the sales of periodic payment plan certificates over the 5 years preceding the date of submission of the report, and the products marketed by such brokers or dealers to replace the revenue generated from the sales of periodic payment plan certificates prohibited under subsection (a). directly conflicts with any applicable Federal law, regulation, or authorized directive; or would not apply if such activity were conducted on State land. the State within which the Federal land or facility is located; or in the case of an individual engaged in the business of insurance, such individual has been issued a resident license; in the case of an entity engaged in the business of insurance, such entity is domiciled; in the case of an individual engaged in the offer or sale (or both) of securities, such individual is registered or required to be registered to do business or the person solicited by such individual resides; or in the case of an entity engaged in the offer or sale (or both) of securities, such entity is registered or is required to be registered to do business or the person solicited by such entity resides. the States collectively work with the Secretary of Defense to ensure implementation of appropriate 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 each State identify its role in promoting the standards described in paragraph (1) in a uniform manner, not later than 12 months after the date of enactment of this Act [ Sept. 29, 2006 ]. It is the sense of Congress that the NAIC should, after consultation with the Secretary of Defense and, not later than 12 months after the date of enactment of this Act, conduct a study to determine the extent to which the States have met the requirement of subsection (a), and report the results of 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. It is the sense of the Congress that senior representatives of the Secretary of Defense, the Securities and Exchange Commission, and the NAIC should meet not less frequently than twice a year to coordinate their activities to implement this Act and monitor the enforcement of relevant regulations relating to the sale of financial products on military installations of the United States. Except as provided in subsection (e), no person may sell, or offer for sale, any life insurance product to any member of the Armed Forces or a dependent thereof on a military installation of the United States, unless a disclosure in accordance with this section is provided to such member or dependent at the time of the sale or offer. states that subsidized life insurance is available to the member of the Armed Forces from the Federal Government under the Servicemembers’ Group Life Insurance program (also referred to as ‘SGLI’), under subchapter III of chapter 19 of title 38, United States Code; states the amount of insurance coverage available under the SGLI program, together with the costs to the member of the Armed Forces for such coverage; states that the life insurance product that is the subject of the disclosure is not offered or provided by the Federal Government, and that the Federal Government has in no way sanctioned, recommended, or encouraged the sale of the life insurance product being offered; fully discloses any terms and circumstances under which amounts accumulated in a savings fund or savings feature under the life insurance product that is the subject of the disclosure may be diverted to pay, or reduced to offset, premiums due for continuation of coverage under such product; states that no person has received any referral fee or incentive compensation in connection with the offer or sale of the life insurance product, unless such person is a licensed agent of the person engaged in the business of insurance that is issuing such product; 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 solicitation material used with respect to or relating to the life insurance product; and with respect to a sale or solicitation on Federal land or facilities located outside of the United States, lists the address and phone number at which consumer complaints are received by the State insurance commissioner for the State having the primary jurisdiction and duty to regulate the sale of such life insurance products pursuant to section 8. The sale of a life insurance product in violation of this section shall be voidable from its inception, at the sole option of the member of the Armed Forces, or dependent thereof, as applicable, to whom the product was sold. with respect to existing policies; and to the extent required by the Federal Government pursuant to previous commitments. This section shall not apply to any life insurance product specifically contracted by or through the Federal Government. limiting such sales authority to persons that are certified as meeting appropriate best practices procedures; and creating standards for products specifically designed to meet the particular needs of members of the Armed Forces, regardless of the sales location; and the extent to which life insurance products marketed to members of the Armed Forces comply with otherwise applicable provisions of State law. study any proposals that have been made to improve the quality of and sale of life insurance products sold on military installations of the United States; and not later than 6 months after the expiration of the period referred to in subsection (a), submit a report on such proposals to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives. any disciplinary action taken by any Federal or State government entity with respect to sales or solicitations of life insurance products on a military installation that the insurer knows, or in the exercise of due diligence should have known, to have been taken; and any significant disciplinary action taken by the insurer with respect to sales or solicitations of life insurance products on a military installation of the United States. receive reports of disciplinary actions taken against persons that sell or solicit the sale of any life insurance product on any military installation of the United States by insurers or Federal or State government entities with respect to such sales or solicitations; and disseminate such information to all other States and to the Secretary of Defense. As used in this section, the term ‘insurer’ means a person engaged in the business of insurance. The Secretary of Defense shall maintain a list of the name, address, and other appropriate information relating to persons engaged in the business of securities or insurance that have been barred or otherwise limited in any manner that is not generally applicable to all such type of persons, from any or all military installations of the United States, or that have engaged in any transaction that is prohibited by this Act. the appropriate Federal and State agencies responsible for securities and insurance regulation are promptly notified upon the inclusion in or removal from the list required by subsection (a) of a person under the jurisdiction of one or more of such agencies; and for use by such agencies; and for purposes of enforcing or considering any such bar or limitation by the appropriate Federal personnel, including commanders of military installations. The Secretary of Defense shall issue regulations in accordance with this subsection to provide for the establishment and maintenance of the list required by this section, including appropriate due process considerations. Not later than the expiration of the 60-day period beginning on the date of enactment of this Act [ Sept. 29, 2006 ], the Secretary of Defense shall prepare and submit to the appropriate Committees of Congress a copy of the regulations required by this subsection that are proposed to be published for comment. The Secretary may not publish such regulations for comment in the Federal Register until the expiration of the 15-day period beginning on the date of such submission to the appropriate Committees of Congress. Not later than 90 days after the date of enactment of this Act, the Secretary of Defense shall submit to the appropriate Committees of Congress a copy of the regulations under this section to be published in final form. Final regulations under this paragraph shall become effective 30 days after the date of their submission to the appropriate Committees of Congress under subparagraph (B). the Committee on Financial Services and the Committee on Armed Services of the House of Representatives; and the Committee on Banking, Housing, and Urban Affairs and the Committee on Armed Services of the Senate. The Inspector General of the Department of Defense shall conduct a study on the impact of Department of Defense Instruction 1344.07 (as in effect on the date of enactment of this Act [ Sept. 29, 2006 ]) and the reforms included in this Act on the quality and suitability of sales of securities and insurance products marketed or otherwise offered to members of the Armed Forces. Not later than 12 months after the date of enactment of this Act, the Inspector General of the Department of Defense shall submit an initial report on the results of the study conducted under subsection (a) to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives, and shall submit followup reports to those committees on December 31, 2008 and December 31, 2010 .”