The chairman of a House subcommittee that is investigating the sale of life insurance and mutual funds to young soldiers and other military members unleashed a scathing attack on Thursday on financial companies active on military bases. The chairman, Representative Richard H. Baker, Republican of Louisiana, challenged not only the sales practices of their agents but also the fundamental merits of their products.
Mr. Baker led a four-hour hearing through a review of how life insurance and mutual funds are sold on military bases, opening with testimony from Specialist Brandon Conger, a soldier who said he was misled into buying an expensive insurance policy he did not want or understand, and ending with promises of swift, bipartisan action to address the problems.
Mr. Baker questioned whether the life insurance industry had done enough to root out agents who prey on young soldiers and indicated that the Pentagon might have a future date with Congress to explain its failure to adequately police the agents it allows on bases.
But Mr. Baker's fiercest criticisms fell on the companies that package and sell the high-commission products. He singled out the complex form of insurance sold to Specialist Conger by the American Amicable Life Insurance Company in Waco, Tex., and a type of mutual fund marketed by First Command Financial Services, in Fort Worth.
The product combines an expensive insurance policy that provides a low death benefit with an interest-earning savings fund that can accumulate cash value over 20 years. The mutual fund, called a contractual plan, imposes sales charges that consume half of an investor's first-year contributions.
Because they protect both Democrats and Republicans, protecting the financial safety of soldiers really ought to be a bipartisan action. Fleecing soldiers with shady mutual funds and rigged life insurance cannot be construed as patriotic no matter how twisted your worldview.
It comes as no wonder that the two companies singled out for censure both hail from the cesspool of fraud and mendacity that we are currently trying to flush from federal influence... the state of Texas.
For more on First Command (and its CEO's campaign contributions to the 2004 campaign of a certain George W Bush), check this out as well as the links at the top of this page. See also Stars and Stripes.