§992. Financial literacy training: financial services
(a)
(A) financial services that are available under law to members;
(B) financial services that are routinely offered by private sector sources to members;
(C) practices relating to the marketing of private sector financial services to members;
(D) such other matters relating to financial services available to members, and the marketing of financial services to members, as the Secretary considers appropriate; and
(E) such other financial practices as the Secretary considers appropriate.
(2) Training under this subsection shall be provided to a member of the armed forces-
(A) as a component of the initial entry training of the member;
(B) upon arrival at the first duty station of the member;
(C) upon arrival at each subsequent duty station, in the case of a member in pay grade E–4 or below or in pay grade O–3 or below;
(D) on the date of promotion of the member, in the case of a member in pay grade E–5 or below or in pay grade O–4 or below;
(E) when the member vests in the Thrift Savings Plan (TSP) under section 8432(g)(2)(C) of title 5;
(F) 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;
(G) at each major life event during the service of the member, such as-
(i) marriage;
(ii) divorce;
(iii) birth of first child; or
(iv) disabling sickness or condition;
(H) during leadership training;
(I) during pre-deployment training and during post-deployment training;
(J) at transition points in the service of the member, such as-
(i) transition from a regular component to a reserve component;
(ii) separation from service; or
(iii) retirement; and
(K) as a component of periodically recurring required training that is provided to the member at a military installation.
(3) 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.
(4) 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.
(b)
(2)(A) In the case of a military installation at which at least 2,000 members of the armed forces on active duty are assigned, the Secretary concerned-
(i) shall provide counseling on financial services under this subsection through a full-time financial services counselor at such installation;
(ii) shall provide such counseling at such installation-
(I) 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;
(II) by contract, including contract for services by telephone and by the Internet; or
(III) through qualified representatives of nonprofit organizations and agencies under formal agreements with the Department of Defense to provide such counseling; and
(iii) may not provide financial services through any individual unless such individual agrees to submit financial disclosures annually to the Secretary.
(B) 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).
(3) 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.
(4)(A) 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.
(B) 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.
(C) 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.
(D) 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.
(c)
(d)
(2) The results of the annual financial literacy and preparedness survey-
(A) shall be used by each of the Secretaries concerned as a benchmark to evaluate and update training provided under this section; and
(B) shall be submitted to the Committees on Armed Services of the Senate and the House of Representatives.
(e)
(1) Life insurance, casualty insurance, and other insurance.
(2) Investments in securities or financial instruments.
(3) Banking, credit, loans, deferred payment plans, and mortgages.
(4) Health insurance, budget management, Thrift Savings Plan (TSP), retirement lump sum payments (including rollover options and tax consequences), and Survivor Benefit Plan (SBP).
(Added
Editorial Notes
Amendments
2023-Subsec. (b)(2)(A)(i).
Subsec. (b)(2)(A)(ii).
Subsec. (b)(2)(A)(ii)(I).
Subsec. (b)(2)(A)(ii)(II).
Subsec. (b)(2)(A)(ii)(III).
Subsec. (b)(2)(A)(iii).
Subsec. (b)(2)(B).
Subsec. (b)(4).
2015-
Subsec. (a).
Subsec. (a)(1).
Subsec. (a)(2).
"(A) a component of members initial entry orientation training; and
"(B) a component of periodically recurring required training that is provided for the members at military installations."
Subsec. (a)(3).
Subsec. (a)(4).
Subsec. (d).
Subsec. (e).
Subsec. (e)(4).
2009-Subsec. (b)(4).
Statutory Notes and Related Subsidiaries
Effective Date of 2006 Amendment
Inclusion of Information on Free Credit Monitoring in Annual Financial Literacy Briefing
Implementations
Counseling on Mortgage Foreclosures for Members of the Armed Forces Returning From Service Abroad
"(a)
"(b)
"(1) Credit counseling.
"(2) Home mortgage counseling.
"(3) Such other counseling and information as the Secretary considers appropriate for purposes of the program.
"(c)
Military Personnel Financial Services Protection
"SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
"(a)
"(b)
"SEC. 2. CONGRESSIONAL FINDINGS.
"Congress finds that-
"(1) members of the Armed Forces perform great sacrifices in protecting our Nation in the War on Terror;
"(2) 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;
"(3) 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;
"(4) 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;
"(5) 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;
"(6) excessive sales charges allow abusive and misleading sales practices in connection with mutual fund contractual plan;
"(7) 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
"(8) the need for regulation of the marketing and sale of securities and life insurance products on military bases necessitates Congressional action.
"SEC. 3. DEFINITIONS.
"For purposes of this Act, the following definitions shall apply:
"(1)
"(A)
"(B)
"(i) endowment benefits;
"(ii) additional benefits in the event of death by accident or accidental means;
"(iii) disability income benefits;
"(iv) 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;
"(v) benefits that provide payment or reimbursement for long-term home health care, or long-term care in a nursing home or other related facility;
"(vi) burial insurance; and
"(vii) optional modes of settlement or proceeds of life insurance.
"(C)
"(2) NAIC.-The term 'NAIC' means the National Association of Insurance Commissioners (or any successor thereto).
"SEC. 4. PROHIBITION ON FUTURE SALES OF PERIODIC PAYMENT PLANS.
"(a)
"(b)
"(c)
"(1) 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. 78o(b)) to voluntarily refund payments made by military service members on any periodic payment plan certificate, and the amounts of such refunds;
"(2) 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
"(3) 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).
"SEC. 5. REQUIRED DISCLOSURES REGARDING OFFERS OR SALES OF SECURITIES ON MILITARY INSTALLATIONS.
[Amended section 78o–3 of Title 15.]
"SEC. 6. METHOD OF MAINTAINING BROKER AND DEALER REGISTRATION, DISCIPLINARY, AND OTHER DATA.
[Amended section 78o–3 of Title 15.]
"SEC. 7. FILING DEPOSITORIES FOR INVESTMENT ADVISERS.
"(a)
"(b)
"(1)
"(2)
"SEC. 8. STATE INSURANCE AND SECURITIES JURISDICTION ON MILITARY INSTALLATIONS.
"(a)
"(1) directly conflicts with any applicable Federal law, regulation, or authorized directive; or
"(2) would not apply if such activity were conducted on State land.
"(b)
"(1) the State within which the Federal land or facility is located; or
"(2) if the Federal land or facility is located outside of the United States, the State in which-
"(A) in the case of an individual engaged in the business of insurance, such individual has been issued a resident license;
"(B) in the case of an entity engaged in the business of insurance, such entity is domiciled;
"(C) 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
"(D) 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.
"SEC. 9. REQUIRED DEVELOPMENT OF MILITARY PERSONNEL PROTECTION STANDARDS REGARDING INSURANCE SALES; ADMINISTRATIVE COORDINATION.
"(a)
"(1) 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
"(2) 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].
"(b)
"(c)
"SEC. 10. REQUIRED DISCLOSURES REGARDING LIFE INSURANCE PRODUCTS.
"(a)
"(b)
"(1) 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;
"(2) 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;
"(3) 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;
"(4) 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;
"(5) 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;
"(6) 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
"(7) 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.
"(c)
"(d)
"(1) with respect to existing policies; and
"(2) to the extent required by the Federal Government pursuant to previous commitments.
"(e)
"SEC. 11. IMPROVING LIFE INSURANCE PRODUCT STANDARDS.
"(a)
"(1) ways of improving the quality of and sale of life insurance products sold on military installations of the United States, which may include-
"(A) limiting such sales authority to persons that are certified as meeting appropriate best practices procedures; and
"(B) creating standards for products specifically designed to meet the particular needs of members of the Armed Forces, regardless of the sales location; and
"(2) the extent to which life insurance products marketed to members of the Armed Forces comply with otherwise applicable provisions of State law.
"(b)
"(1) 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
"(2) 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.
"SEC. 12. REQUIRED REPORTING OF DISCIPLINARY ACTIONS.
"(a)
"(1) 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
"(2) 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.
"(b)
"(1) 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
"(2) disseminate such information to all other States and to the Secretary of Defense.
"(c)
"SEC. 13. REPORTING BARRED PERSONS SELLING INSURANCE OR SECURITIES.
"(a)
"(b)
"(1) 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
"(2) the list is kept current and easily accessible-
"(A) for use by such agencies; and
"(B) for purposes of enforcing or considering any such bar or limitation by the appropriate Federal personnel, including commanders of military installations.
"(c)
"(1)
"(2)
"(A)
"(B)
"(C)
"(d)
"(1) the Committee on Financial Services and the Committee on Armed Services of the House of Representatives; and
"(2) the Committee on Banking, Housing, and Urban Affairs and the Committee on Armed Services of the Senate.
"SEC. 14. STUDY AND REPORTS BY INSPECTOR GENERAL OF THE DEPARTMENT OF DEFENSE.
"(a)
"(b)
Requirement for Regulations on Policies and Procedures on Personal Commercial Solicitations on Department of Defense Installations