Defense Dept. on to crooked advisers

The Department of Defense has declared war on bogus financial advisers. As part of a new federal law to protect soldiers and other members of the military from financial predators, state insurance regulators last September were given a year to work with the Secretary of Defense to find ways to protect members of the armed forces “from dishonest and predatory insurance sales practices while on a military installation of the United States.” So far, 14 states have complied with the legislation and 16 are expected to do so by the end of the year, according to a staff member with the National Association of Insurance Commissioners. Georgia passed its law at the end of August. “We have had war profiteers since the time of the Roman legion,” said John Oxendine, the state insurance commissioner. Whenever the U.S. military gears up for a war, he said, its soldiers have been prey for unscrupulous financial advisers because they’re young, naïve and don’t have a lot of experience with finance. “To me, this is nothing more than being a war profiteer,” he said. The Department of Defense’s inspector general is scheduled to present Congress with a draft of a report about progress in this effort at the beginning of next month. The law also states that the military must track advisers and insurance agents who have been kicked off military bases for dishonest sales of investment products. For the full report, see the upcoming Sept. 17 issue of InvestmentNews