War supplemental might target military life insurance sales
Move follows allegations that the Army failed to process hundreds of supplemental life insurance policies for activated Army personnel deployed to dangerous destinations abroad.
Senators might use President Bush's fiscal 2005 supplemental spending request as a vehicle to curb predatory sales of life insurance and other financial products at military installations around the globe.
During a Senate Armed Services Committee hearing Tuesday, Sens. Susan Collins, R-Maine, and Hillary Rodham Clinton, D-N.Y., said they hope to use the anticipated $80 billion supplemental to reverse language inserted into the fiscal 2005 Defense appropriations bill that prevents the Pentagon from amending its regulations governing commercial insurance sales at military bases.
That language says the Pentagon can take no action until 90 days after the GAO delivers to lawmakers a report on military life insurance premium allotment processing. Without legislative relief, the Pentagon would be unable to change its practices until sometime in June, Collins said during the hearing.
Defense Undersecretary for Personnel and Readiness David Chu said he would welcome any efforts to overturn that provision, noting that the Pentagon has had in place for some time a plan to educate service members about personal financial management, including changes that would ban questionable sales tactics aimed at financially unsophisticated troops.
The issue gained national attention last October when the House overwhelmingly approved a bill attempting to protect service members from unscrupulous life insurance and financial sales agents.
Dubbed the "Military Personnel Financial Services Protection Act," the bill tightened oversight of agents and provided basic consumer protections.
But the need to shield service members from life insurance agents might become increasingly obsolete if lawmakers approve any of a number of bipartisan proposals to raise the cap on government-subsidized benefits for military families.
On Monday, the Pentagon announced a plan to increase life insurance options for military servicemen and servicewomen from $250,000 to as high as $400,000. The Pentagon also would increase the $12,000 survivor death benefit to $100,000.
Chu detailed the Pentagon's new proposals, which closely track bipartisan legislation drafted by Sens. Jeff Sessions, R-Ala., and Joseph Lieberman, D-Conn. The Sessions-Lieberman legislation is one of a slew of bills introduced in recent weeks in an effort to improve military quality of life and bolster recruitment and retention efforts.
Sessions and Senate Armed Services Chairman John Warner, R-Va., urged the Pentagon to include the new benefits in the fiscal 2005 supplemental spending request expected to be delivered to lawmakers in the coming weeks.