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January 12, 2005
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By Leo Shane III,
Stars and Stripes European edition
WASHINGTON — Georgia’s insurance commissioner expects more investigations
and sanctions against insurance companies with a military focus in
the wake of a Texas firm’s admission of improper insurance sales to
troops in basic training.
Last week American-Amicable Life Insurance announced it would pay
about $1.3 million to more than 900 Georgia servicemembers sold policies
while in training, which is prohibited under Department of Defense
policies and Georgia insurance sales regulations.
Company officials blamed a third-party seller — an independent firm
selling products from more than one insurance company — for what they
called a one-time mistake, but commissioner John W. Oxendine said
he thinks the incident points to a larger problem of the industry
exploiting military personnel.
“These refunds will in no way be the last step,” he said. “We have
an active investigation against six other insurance companies. We
believe this does happen all the time.”
One of those other investigations is focused on First Command, who
last month agreed to pay an $8 million fine and refund about $4 million
to customers given false information and promises about systematic
investment plans.
Since the investigations began, several of the companies in question
have been barred from business at Fort Benning in Georgia. The Department
of Defense has asked all bases to provide details of their solicitation
investigations since 2000 as part of a comprehensive review of the
industry.
American-Amicable offered life insurance refunds in early 2004 after
a similar illegal sales charge at Camp Pendleton, Calif. The company
was banned from U.S. Army bases in Europe from 1998 to 2000 for similar
soliciting violations.
Spokesman Mark Palmer said that after the latest charges, American-Amicable
hired Carl Ross, the retired civilian chief of staff for training
at the Great Lakes Naval Training Center, to help revamp training
and marketing policies, to ensure similar problems don’t appear in
the future.
He added that American-Amicable has ended its contracts with all of
the third-party sellers involved in the improper sales.
The third-party seller involved in the Fort Benning case was contacted
for comment, but did not respond.
Oxendine said he thinks Georgia’s investigations are just the start
of what he hopes will be a nationwide crackdown on unscrupulous insurance
and investment firms.
“Ripping off soldiers has been happening since the Middle Ages, but
it appears at times of war it gets more active,” he said. “But we
haven’t really heard about it until recently.
“The military has taken care of everything (these troops) need, and
for them to go outside that structure to complain is against what
they’ve been taught.”
Troops who bought the American-Amicable policies while training in
Georgia will have 180 days to request a refund, but those stationed
outside the United States won’t have that timetable start until they
return. All should be receiving notification by mail in the coming
weeks.
For more information, call (800) 656-2298.
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©2005 Stars & Stripes. All opinions
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