Appendix A to Part 50 - Life Insurance Products and Securities
32:1.1.1.4.13.0.44.8.14 : Appendix A
Appendix A to Part 50 - Life Insurance Products and Securities A.
Life Insurance Product Content Prerequisites
Companies must provide DoD personnel a written description for
each product or service they intend to market to DoD personnel on
DoD installations. These descriptions must be written in a manner
that DoD personnel can easily understand, and fully disclose the
fundamental nature of the policy. Companies must be able to
demonstrate that each form to be used has been filed with and
approved, where applicable, by the insurance department of the
State where the installation is located. Insurance products
marketed to DoD personnel on overseas installations must conform to
the standards prescribed by the laws of the State where the company
is incorporated.
1. Insurance products, other than certificates or other evidence
of insurance issued by a self-insured association, offered and sold
worldwide to personnel on DoD installations, must:
a. Comply with the insurance laws of the State or country in
which the installation is located and the requirements of this
part.
b. Contain no restrictions by reason of Military Service or
military occupational specialty of the insured, unless such
restrictions are clearly indicated on the face of the contract.
c. Plainly indicate any extra premium charges imposed by reason
of Military Service or military occupational specialty.
d. Contain no variation in the amount of death benefit or
premium based upon the length of time the contract has been in
force, unless all such variations are clearly described in the
contract.
e. In plain and readily understandable language, and in type
font at least as large as the font used for the majority of the
policy, inform Service members of:
1. The availability and cost of government subsidized
Servicemen's Group Life Insurance.
2. The address and phone number where consumer complaints
are received by the State insurance commissioner for the State in
which the insurance product is being sold.
3. That the U.S. Government has in no way sanctioned,
recommended, or encouraged the sale of the product being offered.
With respect to the sale or solicitation of insurance on Federal
land or facilitates located outside the United States, insurance
products must contain the address and phone number where consumer
complaints are received by the State insurance commissioner for the
State which has issued the agent a resident license or the company
is domiciled, as applicable.
2. To comply with paragraphs A.1.b., A.1.c. and A.1.d., an
appropriate reference stamped on the first page of the contract
shall draw the attention of the policyholder to any restrictions by
reason of Military Service or military occupational specialty. The
reference shall describe any extra premium charges and any
variations in the amount of death benefit or premium based upon the
length of time the contract has been in force.
3. Variable life insurance products may be offered provided they
meet the criteria of the appropriate insurance regulatory agency
and the Securities and Exchange Commission.
4. Insurance products shall not be marketed or sold disguised as
investments. If there is a savings component to an insurance
product, the agent shall provide the customer written
documentation, which clearly explains how much of the premium goes
to the savings component per year broken down over the life of the
policy. This document must also show the total amount per year
allocated to insurance premiums. The customer must be provided a
copy of this document that is signed by the insurance agent.
B. Sale of Securities
1. All securities must be registered with the Securities and
Exchange Commission.
2. All sales of securities must comply with the appropriate
Securities and Exchange Commission regulations.
3. All securities representatives must apply to the commander of
the installation on which they desire to solicit the sale of
securities for permission to solicit.
4. Where the accredited insurer's policy permits, an overseas
accredited life insurance agent - if duly qualified to engage in
security activities either as a registered representative of the
National Association of Securities Dealers or as an associate of a
broker or dealer registered with the Securities and Exchange
Commission - may offer life insurance and securities for sale
simultaneously. In cases of commingled sales, the allotment of pay
for the purchase of securities cannot be made to the insurer.
C. Use of the Allotment of Pay System
1. Allotments of military pay for life insurance products shall
be made in accordance with DoD 7000.14-R.
2. For personnel in pay grades E-4 and below, in order to obtain
financial counseling, at least seven calendar days shall elapse
between the signing of a life insurance application and the
certification of a military pay allotment for any supplemental
commercial life insurance. Installation Finance Officers are
responsible for ensuring this seven-day cooling-off period is
monitored and enforced. The purchaser's commanding officer may
grant a waiver of the seven-day cooling-off period requirement for
good cause, such as the purchaser's imminent deployment or
permanent change of station.
D. Associations - General
The recent growth and general acceptability of quasi-military
associations offering various insurance plans to military personnel
are acknowledged. Some associations are not organized within the
supervision of insurance laws of either a State or the Federal
Government. While some are organized for profit, others function as
nonprofit associations under Internal Revenue Service regulations.
Regardless of the manner in which insurance is offered to members,
the management of the association is responsible for complying
fully with the policies contained in this part.