The Military Personnel Financial Services Protection Act, passed by Congress in 2006, prohibits insurers from entering into or renewing a contractual relationship with an agent or other person who sells life insurance on a military installation unless the insurer has implemented a system to report disciplinary actions taken by:
(1) the insurer or (2) any Federal or State government entity against its agents for conduct occurring on a military installation.
The insurer is required to report any such disciplinary actions to both its domiciliary regulator and the agent’s resident regulator.
The Kentucky Insurance Department (the "Department") recently issued Advisory Opinion 2008-03, which states that all insurers authorized to transact life insurance business in Kentucky must comply with the Federal Reporting Requirement described above. The advisory opinion also states that such insurers must demonstrate to the Kentucky Commissioner of Insurance, upon request, that they have complied with the reporting requirements. The Department, in an effort to simplify the reporting process, is encouraging insurers to use the NAIC’s Military Sales Online Reporting System.