Servicemembers are engaged overseas in hostile actions that threaten their lives and possibly the future financial security of their families, should they die. To address their financial security needs, some servicemembers have purchased additional life insurance to supplement that offered by the government. Concerns have been raised, though, about solicitation violations, as well as problems in the system for setting up payroll allotments for such insurance. The Department of Defense (DOD) recently published a revised draft directive on solicitation but will not implement the directive until at least 90 days following this GAO report. GAO addressed three primary issues: (1) the extent to which DOD solicitation regulations are being violated; (2) the extent to which DOD personnel are adhering to allotment regulations for the purchase of supplemental life insurance; and (3) the extent to which the new directive addresses ongoing problems in supplemental life insurance solicitation policies.
Recommendations for Executive Action
|Department of Defense||The Secretary of Defense should direct the Under Secretary of Defense for Personnel and Readiness, in revising DOD's solicitation regulation, to develop and implement, with the services, a DOD-wide searchable violations database that uses consistent data elements and coding across services. Solicitation coordinators or others at the installation would then be required to enter the installation name, violating agent's name, insurance company supplying the product, type(s) of violation(s), date and type of action taken, and other information important for identifying patterns of violations and facilitating efficient data collection and dissemination of information on confirmed violators to all installations and state insurance regulators.|
|Department of Defense||The Secretary of Defense should direct the Under Secretary of Defense for Personnel and Readiness, in revising DOD's solicitation regulation, to specify in the revised directive that the installation commander is responsible for notifying state insurance regulators, the service secretariat, and DOD, when the commander has determined that agents or companies have violated DOD, service, or installation policies. Requiring installation commanders to contact appropriate state officials regarding all confirmed violations of DOD's commercial solicitation directive increases the likelihood that state insurance officials will be provided an opportunity to determine if further action such as revocation of a state license is warranted.|
|Department of Defense||The Secretary of Defense should direct the Under Secretary of Defense for Personnel and Readiness, in revising DOD's solicitation regulation, to clarify the portion of the revised directive that pertains to the cooling-off period that must elapse before junior enlisted personnel can start an allotment to purchase supplemental life insurance. Addressing and eliminating the ambiguities that we have identified about what is required versus optional could result in better compliance with the directive.|
|Department of Defense||The Secretary of Defense should direct the Defense Finance and Accounting Service to determine what current and future modifications should be made to the regulations, forms, and procedures used to initiate and electronically capture supplemental life insurance allotments so that more useable data are available to the DOD, service, and installation offices responsible for overseeing supplemental life insurance solicitation. This step might include developing and implementing a single code and form that would be used for supplemental life insurance allotments and to document compliance with requirements that DOD has previously had little visibility over.|
|Department of Defense||The Secretary of Defense should direct the Defense Finance and Accounting Service to issue a message to all finance offices and the Defense Finance and Accounting Service offices that process allotments for supplemental life insurance to remind personnel that DOD's Financial Management Regulation indicates that only servicemembers or their designated representatives with special power of attorney for the prescribed purpose are authorized to start, stop, or modify financial allotments. If deviations from the policy are warranted to allow mailed allotment forms, the Defense Finance and Accounting Service should specify the additional verification required in those situations.|