[Federal Register Volume 81, Number 171 (Friday, September 2, 2016)]
[Proposed Rules]
[Pages 60655-60663]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-21092]



[[Page 60655]]

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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 50

[Docket ID: DOD-2015-OS-0075]
RIN 0790-AJ39


Personal Commercial Solicitation on DoD Installations

AGENCY: Office of the Under Secretary of Defense for Personnel and 
Readiness, DoD.

ACTION: Proposed rule.

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SUMMARY: This rule establishes policy, assigns responsibilities, and 
provides procedures for personal commercial solicitation on DoD 
installations, and identifies prohibited practices that may cause 
withdrawal of personal commercial solicitation privileges on DoD 
installations and establishes notification requirements when privileges 
are withdrawn.

DATES: Comments must be received by November 1, 2016.

ADDRESSES: You may submit comments, identified by docket number or 
Regulatory Information Number (RIN) number and title, by any of the 
following methods:
     Federal Rulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Department of Defense, Office of the Deputy Chief 
Management Officer, Directorate of Oversight and Compliance, 4800 Mark 
Center Drive, Mailbox #24, Alexandria, VA 22350-1700.
    Instructions: All submissions received must include the agency name 
and docket number or RIN for this Federal Register document. The 
general policy for comments and other submissions from members of the 
public is to make these submissions available for public viewing on the 
Internet at http://www.regulations.gov as they are received without 
change, including any personal identifiers or contact information.

FOR FURTHER INFORMATION CONTACT: Jane Westbay, 703-588-0953.

SUPPLEMENTARY INFORMATION: DoD is establishing regulations governing 
access to DoD installations for purposes of commercial solicitation. 
This rule is needed to establish the procedures applicable to requests 
for personal commercial solicitors on DoD installations and identifies 
prohibited practices that may cause withdrawal of permission for such 
access.
    Section 577 of Public Law 109-163, ``The National Defense 
Authorization Act for Fiscal Year 2006,'' requires DoD to prescribe 
regulations on policies and procedures for personal commercial 
solicitation on DoD installations. In addition, Public Law 109-290, 
``Military Personnel Financial Services Protection Act,'' specifies 
requirements for engaging military personnel in the sale of insurance, 
financial, and investment products.
    This rule informs commercial companies, agencies, and agents about 
the procedures for personal commercial solicitation activities on DoD 
installations. These procedures include the limitations on commercial 
solicitation by educational institutions, associations, and companies 
offering life insurance products and securities on DoD installations. 
The supervision of installation personal commercial solicitation 
activities; prohibited practices; advertising and commercial 
sponsorship; financial education programs; overseas life insurance 
registration procedures; and denial, suspension, and withdrawal of 
installation solicitation privileges are also discussed in this rule.
    In recent years, some financial educational institutions have 
attempted to gain access to installations for marketing purposes, even 
though they are not approved to operate as an educational institution 
(or school) on the installation. By including them as a regulated 
commercial solicitor, DoD aims to prevent circumvention of the system, 
which will ultimately help protect Service members from unscrupulous 
advertising and business practices that may harm them.
    This rule has minimal administrative costs to DoD for overseas life 
insurance registration as well as quarterly solicitation privileges 
reporting. There is no cost to the public and no cost to solicitors. 
The rule prevents circumvention of the system that is in place by 
prohibiting new commercial solicitors from advertising on an 
installation through a separate agreement with an organization that is 
already authorized to operate on the installation (e.g., a college or 
university enters into a partnership with a non-Federal entity that 
operates on an installation and tries to distribute marketing material 
on that installation through the non-Federal entity). The benefit of 
this rule is that it offers protection from unscrupulous solicitation 
practices to Service members on DoD installations, worldwide.

Regulatory Procedures

Executive Order 12866, ``Regulatory Planning and Review'' and Executive 
Order 13563, ``Improving Regulation and Regulatory Review''

    Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distribute impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. It has been determined that this rule is not a significant 
regulatory action. The rule does not: (1) Have an annual effect on the 
economy of $100 million or more or adversely affect in a material way 
the economy; a section of the economy; productivity; competition; jobs; 
the environment; public health or safety; or State, local, or tribal 
governments or communities; (2) Create a serious inconsistency or 
otherwise interfere with an action taken or planned by another Agency; 
(3) Materially alter the budgetary impact of entitlements, grants, user 
fees, or loan programs, or the rights and obligations of recipients 
thereof; or (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
these Executive Orders.

``Unfunded Mandates Reform Act'' (2 U.S.C. Ch. 25)

    Section 1532 of title 2, U.S. Code, of the Unfunded Mandates Reform 
Act of 1995 (UMRA) (Pub. L. 104-4) requires agencies assess anticipated 
costs and benefits before issuing any rule whose mandates require 
spending in any 1 year of $100 million in 1995 dollars, updated 
annually for inflation. In 2014, that threshold is approximately $141 
million. This rule will not mandate any requirements for State, local, 
or tribal governments, nor will it affect private sector costs.

``Regulatory Flexibility Act'' (5 U.S.C. 601)

    The Department of Defense certifies that this proposed rule is not 
subject to the Regulatory Flexibility Act (5 U.S.C. 601) because it 
would not, if promulgated, have a significant economic impact on a 
substantial number of small entities. Therefore, the Regulatory 
Flexibility Act, as amended, does not require us to prepare a 
regulatory flexibility analysis.

[[Page 60656]]

``Paperwork Reduction Act'' (44 U.S.C. Chapter 35)

    It has been certified that 32 CFR part 50 does not impose reporting 
or recordkeeping requirements under the Paperwork Reduction Act of 
1995.

Executive Order 13132, ``Federalism''

    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. This proposed rule will not have a substantial effect on 
State and local governments.

List of Subjects in 32 CFR Part 50

    Consumer protection, Federal buildings and facilities, Government 
employees, Life insurance, Military personnel.

    Accordingly, 32 CFR part 50 is proposed to be revised to read as 
follows:

PART 50--PERSONAL COMMERCIAL SOLICITATION ON DOD INSTALLATIONS

Sec.
50.1 Purpose.
50.2 Applicability.
50.3 Definitions.
50.4 Policy.
50.5 Responsibilities.
50.6 Procedures.
Appendix A to Part 50--Life Insurance Products and Securities
Appendix B to Part 50--Overseas Life Insurance Registration Program

    Authority:  Section 577 of Public Law 109-163, Public Law 109-
290.


Sec.  50.1  Purpose.

    This part:
    (a) Establishes policy, assigns responsibilities, and provides 
procedures for personal commercial solicitation on DoD installations in 
accordance with the authority in Section 577 of Public Law 109-163, 
``The National Defense Authorization Act for Fiscal Year 2006.''
    (b) Identifies prohibited practices that may cause withdrawal of 
personal commercial solicitation privileges on DoD installations and 
establishes notification requirements when privileges are withdrawn.


Sec.  50.2  Applicability.

    (a) Applies to Office of the Secretary of Defense, the Military 
Departments, the Office of the Chairman of the Joint Chiefs of Staff 
and the Joint Staff, the Combatant Commands, the Office of the 
Inspector General of the Department of Defense, the Defense Agencies, 
the DoD Field Activities, and all other organizational entities within 
the DoD (referred to collectively in this part as the ``DoD 
Components.'')
    (b) Applies to all personal commercial solicitation on DoD 
installations, whether conducted individually or in conjunction with 
meetings on DoD installations involving private, nonprofit, tax-exempt 
organizations or educational institutions providing educational 
programs and services through the DoD Voluntary Education Program. 
Attendance at these meetings is voluntary and the time and place of 
such meetings are subject to the discretion of the installation 
commander or his or her designee.
    (c) Does not apply to services furnished by residential service 
companies, such as deliveries of milk, laundry, newspapers, and related 
services, to personal residences on the installation requested by the 
resident and authorized by the installation commander.


Sec.  50.3  Definitions.

    These terms and their definitions are for the purpose of this part.
    Agency. A business entity which represents one or more insurers or 
companies and is engaged in the business of selling, soliciting, or 
negotiating insurance, securities, or other products.
    Agent. An individual who receives remuneration as a salesperson, 
registered representative, or whose remuneration is dependent on volume 
of sales of a product or products.
    Agreement. A formal contract or arrangement, either written or 
verbal, that is sometimes enforceable by law.
    Armed Forces Disciplinary Control Boards. Advisory boards 
established by installation commanders to make recommendations on 
matters which may negatively affect the health, safety, morals, 
welfare, morale, or discipline of Armed Forces personnel. Such boards 
ensure the establishment and maintenance of the highest degree of 
liaison and coordination between military commands and appropriate 
civil authorities.
    Combatant Command. A military command which has a broad, continuing 
mission and which is composed of forces from two or more Military 
Departments (unified combatant command) or a single Military Department 
(specified combatant command).
    Commercial sponsorship. The act of providing assistance, funding, 
goods, equipment (including fixed assets), or services to Morale, 
Welfare, and Recreation (MWR) programs or events by an individual, 
agency, association, company, corporation, or other entity for a 
specified period of time in return for public recognition or 
advertising promotions. Commercial sponsorship is either unsolicited or 
solicited.
    Company. An insurer or business entity selling insurance, 
securities, or other products.
    Denial. Refusal to grant requested action.
    Disinterested third-party. An impartial person who does not have a 
vested interest in the outcome of the situation for which he or she is 
being consulted.
    DoD installation. A base, camp, post, station, yard, center, 
homeport facility for any ship, or other activity under the 
jurisdiction of the Secretary of Defense or the Secretary of a Military 
Department, including any leased facility, or, in the case of an 
activity in a foreign country, under the operational control of the 
Secretary of Defense or the Secretary of a Military Department, without 
regard to the duration of operational control. Such term does not 
include any facility used primarily for civil works or flood control 
projects.
    DoD personnel. All active duty officers (commissioned and warrant) 
and enlisted members of the Military Departments, including members of 
the Reserve Components, and all civilian employees of the DoD, 
including nonappropriated fund employees and special government 
employees.
    Education advisor. A professionally qualified subject matter expert 
or program manager in the Office of Personnel Management Education 
Services Series 1740 occupational group or possessing equivalent 
qualifications, and assigned to the installation education center. 
Synonymous with: Education Services Specialist, Education Services 
Officer, Voluntary Education Director, Navy College Office Director, 
and Education and Training Section Chief.
    Educational institution. A college, university, or other 
institution of higher education.
    Financial services. Those services commonly associated with 
financial institutions in the United States, such as electronic banking 
(e.g., automatic teller machines); in-store banking; checking, share 
and savings accounts; fund transfers; sale of official checks, money 
orders and travelers checks; loan services; safe deposit boxes; trust 
services; sale and redemption of U.S. Savings Bonds; and acceptance of 
utility payments and any other consumer-related banking services.

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    Installation solicitation authorization documentation. A document 
issued by the installation commander that provides proof of 
authorization to engage in personal commercial solicitation on the 
installation.
    Insurance product. A policy, annuity, or certificate of insurance 
issued by an insurer or evidence of insurance coverage issued by a 
self-insured association, including those with savings and investment 
features.
    Insurer. Any business entity licensed by the appropriate 
governmental agency to act as an indemnitor, surety, or contractor 
which issues insurance, annuity or endowment contracts, or other 
contracts of insurance by whatever name called.
    Investment. Something in which money is spent with the goal of 
making a profit.
    Life insurance product. Any product, including individual and group 
life insurance, funding agreements, and annuities, that provides 
insurance for which the probabilities of the duration of human life or 
the rate of mortality is an element or condition of insurance.
    Market. Promote or advertise.
    MWR. The collection of DoD recreation, leisure, and entertainment 
programs and services provided on military installations to enhance 
mission readiness, provide community support, and engage authorized DoD 
personnel in activities that positively influence behavior and 
contribute to readiness and resilience.
    Non-federal entity. A self-sustaining person or organization, 
established, operated, and controlled by an individual or individuals 
acting outside the scope of any official capacity as officers, 
employees, or agents of the Federal Government. Non-federal entities 
may include elements of State, interstate, Indian tribal, and local 
government, as well as private organizations.
    Non-government, non-commercial organization. An organization that 
is neither an official agency of local, State, or federal government 
nor engaged in commerce or work intended for commerce.
    Normal home enterprise. Sales or services that are customarily 
conducted in a domestic setting and do not compete with an 
installation's officially sanctioned commerce.
    On-base financial institution. Banks or credit unions selected by 
the installation commander through open competitive solicitation to 
provide exclusive on-base delivery of financial services to the 
installation under a written operating agreement.
    Overseas. Areas other than the 50 United States, the District of 
Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, 
Guam, the Commonwealth of Northern Mariana Islands, and American Samoa.
    PAS official. An official within DoD that is designated by statute 
to be appointed from civilian life by the President, by and with the 
advice and consent of the Senate.
    Personal commercial solicitation. Personal contact, to include 
meetings, meals, or telecommunications, for the purpose of seeking 
private business or trade.
    Plain language. Communication an audience can understand the first 
time they read or hear it.
    Promotional item. Item for distribution that is printed with an 
advertiser's name, logo, message, or offer.
    Quasi-military association. An association that may be partly 
associated with the military but is not a military organization.
    Securities. Mutual funds, stocks, bonds, or any product registered 
with or otherwise regulated by the Securities and Exchange Commission 
except for any insurance or annuity product issued by a corporation 
subject to supervision by State insurance authorities.
    Show cause. An opportunity for an aggrieved party to present facts 
on an informal basis for the consideration of the installation 
commander or the commander's designee.
    Suspension. Temporary termination of privileges pending completion 
of a commander's inquiry or investigation.
    Voluntary Education Program. The DoD entity that regulates and 
oversees implementation of continuing, adult, or postsecondary 
education programs of study on DoD installations.
    Withdrawal. Termination of privileges for a set period of time 
following completion of a commander's inquiry or investigation.


Sec.  50.4  Policy.

    It is DoD policy that:
    (a) This part will establish uniform rules for conducting all 
personal commercial solicitation on DoD installations to safeguard and 
promote the welfare of DoD personnel as consumers. Agents, agencies, 
and companies failing to follow the policy in this part may be 
restricted or denied the opportunity to solicit on installations.
    (b) Life insurance agents must register annually with the DoD to 
sell their products on DoD installations overseas.
    (c) Educational institutions authorized to provide education, 
guidance, and training opportunities or participate in education fairs 
on DoD installations, must comply with federal law, DoD Instruction 
1322.19, ``Voluntary Education Programs in Overseas Areas'' (available 
at http://www.dtic.mil/whs/directives/corres/pdf/132219p.pdf); DoD 
Instruction 1322.25, ``Voluntary Education Programs'' (available at 
http://www.dtic.mil/whs/directives/corres/pdf/132225p.pdf), responsible 
Military Department policies and regulations, and this part.
    (d) Installation commanders will approve or prohibit any personal 
commercial solicitation covered by this part. Nothing in this part 
limits an installation commander's inherent authority to deny access to 
vendors or to establish time and place restriction on personal 
commercial solicitation activities at the installation.
    (e) Nothing in this part limits the authority of the installation 
commander or other appropriate authority to request or institute 
administrative or criminal action against any person, including those 
who violate the conditions and restrictions upon which installation 
entry is authorized.


Sec.  50.5  Responsibilities.

    (a) Under the authority, direction, and control of the Under 
Secretary of Defense for Personnel and Readiness (USD(P&R)), and in 
accordance with DoD Directive 5124.09, ``Assistant Secretary of Defense 
for Readiness and Force Management (ASD(R&FM))'' (available at http://www.dtic.mil/whs/directives/corres/pdf/512409p.pdf), the Assistant 
Secretary of Defense for Manpower and Reserve Affairs (ASD(M&RA)):
    (1) Identifies and publishes procedures implementing the policies 
in this part.
    (2) Maintains the current master file on agents, agencies, and 
companies whose personal commercial solicitation privileges have been 
withdrawn at any DoD installation.
    (3) Develops and maintains a list of all State insurance 
commissioner points of contact for DoD matters and forwards this list 
to the Military Departments.
    (4) Reviews and approves applications for the Overseas Life 
Insurance Registration Program, as outlined in Appendix B of this part.
    (b) The DoD Component heads:
    (1) Ensure implementation of this part on installations under their 
authority and compliance with its provisions.
    (2) Require installations under their authority to report each 
instance of withdrawal of personal commercial solicitation privileges.
    (3) Submit the Solicitation Privileges Report, listing all agents, 
agencies, and

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companies whose personal commercial solicitation privileges have been 
withdrawn at installations under the Component's authority, to the 
ASD(M&RA), in accordance with this part.


Sec.  50.6  Procedures.

    (a) Authority to solicit. No person has authority to enter a DoD 
installation to transact personal commercial solicitation as a matter 
of right. Personal commercial solicitation may be permitted only if the 
following requirements are met:
    (1) The solicitor is licensed under applicable federal, State, or 
municipal laws where the installation is located and has complied with 
installation regulations pursuant to Section 8 of Public Law 109-290, 
``Military Personnel Financial Services Protection Act.''
    (2) The solicitor is entering the installation to attend a specific 
prearranged appointment with an individual, either in family quarters 
or another designated business appointment area.
    (3) Agents must identify themselves as working for a specific 
agency or company when scheduling their appointments with DoD 
personnel. Insurance agents must identify their agency and insurers. 
Securities agents must identify their registered brokers, dealers, or 
investment advisors.
    (4) Each scheduled meeting is conducted only in family quarters or 
in other areas designated by the installation commander.
    (5) The solicitor agrees to provide each person solicited a copy of 
DD Form 2885, ``Personal Commercial Solicitation Evaluation,'' (located 
on the DoD Forms Management Program Web site at www.dtic.mil/whs/directives/forms/index.htm) during the initial appointment. Completion 
of the evaluation by the solicited person is voluntary. If completed, 
evaluations should be sent to the installation commander or his or her 
designated representative.
    (6) The solicitor agrees to provide DoD personnel with a written 
reminder that free legal advice is available from the Office of the 
Staff Judge Advocate prior to accepting a financial commitment.
    (7) If overseas, solicitors also observe the applicable laws of the 
host country. Upon request, the solicitor must present documentation to 
the installation commander that the agency or company the solicitor 
represents, and its agents, meet the applicable licensing requirements 
of the host country.
    (b) Educational institutions. (1) Marketing firms or companies that 
own, operate, or represent educational institutions will not have 
access to DoD installations. The privilege is reserved only for 
educational institution representatives meeting the requirements in 
paragraphs (b)(2) and (b)(3) of this section.
    (2) Educational institutions wishing to provide education, 
guidance, and training opportunities or participate in educational 
fairs on a DoD installation must obtain access approval from the 
installation education advisor, who will review and analyze requests on 
behalf of the installation commander. The installation education 
advisor and installation commander, in consultation with the 
installation's servicing ethics counselor, will approve requests in 
accordance with Sections 3-200, 3-206, and 3-211 of DoD 5500.07-R, 
``Joint Ethics Regulation (JER)'' (available at http://www.dtic.mil/whs/directives/corres/pdf/550007r.pdf) and Enclosure 3 of DoD 
Instruction 1322.25.
    (3) Only educational institutions participating in the Voluntary 
Education Program at DoD installations worldwide (to include enduring 
and contingency locations) may conduct or provide any type of education 
programs and services at those locations. The educational institutions 
must obtain access approval through the installation education advisor, 
or, for overseas locations, the contracting officer representative.
    (c) Associations. The recent growth and general acceptability of 
quasi-military associations offering various insurance plans to Service 
members is acknowledged. Regardless of the manner in which insurance is 
offered to Service members (e.g., for profit; not-for-profit, under 
Internal Revenue Service regulations; outside the supervision of 
insurance laws of either a State or the Federal Government), the 
management of the association is responsible for complying fully with 
the policies contained in this part.
    (d) Life insurance products and securities. (1) Life insurance 
products and securities offered and sold to DoD personnel will meet the 
prerequisites described in Appendix A of this part and comply with all 
applicable requirements set forth in Public Law 109-290.
    (2) Installation commanders may permit insurers and their agents to 
solicit on DoD installations if the requirements of paragraph (a) of 
this section are met. Installation commanders will verify the agent's 
license status and complaint history with the appropriate regulatory 
authorities before granting the agent permission to solicit on the 
installation.
    (3) Before approving life insurance products and securities agents' 
requests for permission to solicit, installation commanders will review 
the Solicitation Privileges Report at www.militaryonesource.mil. In 
overseas areas, the DoD Components will limit life insurance 
solicitation to those insurers registered under the provisions of 
Appendix B of this part.
    (4) Installation commanders will make disinterested third-party 
insurance counseling available to any DoD personnel desiring 
counseling. Financial counselors will encourage DoD personnel to seek 
legal assistance or other advice from a disinterested third party 
before entering a contract for life insurance products or securities.
    (e) Supervision of installation personal commercial solicitation 
activities. Installation commanders will:
    (1) Designate authorized business appointment areas on the 
installation. Use of these areas will be extended to all solicitors on 
an equitable basis. The installation commander may develop and publish 
local policy for the reservation and use of this area, especially where 
space and other considerations limit availability.
    (2) Post installation personal commercial solicitation regulations 
in an easily accessible location for those conducting and receiving 
personal commercial solicitation on the installation.
    (3) Provide the following to anyone conducting personal commercial 
solicitation activities on the installation:
    (i) A copy of installation personal commercial solicitation 
regulations.
    (ii) A warning that failure to follow installation personal 
commercial solicitation regulations may result in the loss of personal 
commercial solicitation privileges.
    (4) The installation commander will investigate alleged violations 
of this part and installation personal commercial solicitation 
regulations, or questionable solicitation practices. Submitted DD Form 
2885s are used as a means to monitor solicitation activities on the 
installation and bring potential violations to the attention of the 
command.
    (f) Prohibited practices. (1) The following personal commercial 
solicitation practices are prohibited on all DoD installations:
    (i) Soliciting recruits, trainees, and transient personnel in a 
group setting or mass audience or solicitation of any DoD personnel in 
a captive audience where attendance is not voluntary.

[[Page 60659]]

    (ii) Meeting with or soliciting DoD personnel during their normally 
scheduled duty hours.
    (iii) Soliciting in barracks, day rooms, unit areas, transient 
personnel housing, or other areas where the installation commander has 
not authorized solicitation.
    (iv) Gaining access to DoD installations with DoD or uniform 
service identification cards or DoD vehicle decals, for the purpose of 
soliciting, without presenting installation solicitation authorization 
documentation.
    (v) Procuring, attempting to procure, supplying, or attempting to 
supply non-public listings of DoD personnel for purposes of personal 
commercial solicitation, except for releases made in accordance with 32 
CFR part 285.
    (vi) Offering unfair, improper, or deceptive inducements to 
purchase or trade.
    (vii) Using promotional incentives to facilitate transactions or 
eliminate competition.
    (viii) Using manipulative, deceptive, or fraudulent devices, 
schemes, or artifices, including misleading advertising and sales 
literature. All financial products that contain insurance features must 
clearly explain the insurance features of those products.
    (ix) Using oral or written representations to suggest or give the 
appearance that the DoD sponsors or endorses any particular agency, 
company, its agents, or the goods, services, and commodities it sells.
    (x) Soliciting to DoD personnel who are junior in rank or grade, or 
to the family members of such personnel, except as authorized in 
Sections 2-205 and 5-409 of DoD 5500.07-R.
    (xi) Entering an unauthorized or restricted area.
    (xii) Using any portion of installation facilities, including 
quarters, as a showroom or store for the sale of goods or services, 
except as specifically authorized by DoD Instruction 1330.09, ``Armed 
Services Exchange Policy'' (available at http://www.dtic.mil/whs/directives/corres/pdf/133009p.pdf); DoD Instruction 1330.17, ``DoD 
Commissary Program'' (available at http://www.dtic.mil/whs/directives/corres/pdf/133017p.pdf); DoD Instruction 1015.10, ``Military Morale, 
Welfare, and Recreation (MWR) Programs'' (available at http://www.dtic.mil/whs/directives/corres/pdf/101510p.pdf); and DoD 
Instruction 1000.15, ``Procedures and Support for Non-Federal Entities 
Authorized to Operate on DoD Installations'' (available at http://www.dtic.mil/whs/directives/corres/pdf/100015p.pdf). This does not 
apply to normal home enterprises that comply with applicable State and 
local laws and installation rules.
    (xiii) Soliciting door to door or without an appointment.
    (xiv) Using the following without authorization for personal 
commercial solicitation or advertising on the installation:
    (A) Personal addresses or telephone numbers.
    (B) Official positions, titles, or organization names, except as 
authorized in DoD 5500.07-R. Military grade and military service as 
part of an individual's name (e.g., Captain Smith, U.S. Marine Corps) 
may be used in the same manner as conventional titles, such as ``Mr.'', 
``Mrs.'', or ``Honorable.''
    (xv) Contacting DoD personnel by way of a government telephone, 
government fax machine, government computer, or any other government 
communication device unless a pre-existing relationship exists between 
the parties (e.g., the DoD member is a current client or requested to 
be contacted) and the DoD member has not asked for contact to be 
terminated.
    (2) In addition to the solicitation prohibitions listed in 
paragraph (f)(1) of this section, the DoD Components will prohibit:
    (i) DoD personnel from representing any insurer; dealing directly 
or indirectly on behalf of any insurer or any recognized representative 
of any insurer on the installation; or, acting as an agent or in any 
official or business capacity, with or without compensation.
    (ii) Agents from:
    (A) Participating in any Military Department-sponsored education or 
orientation program.
    (B) Using any title that states or implies any type of endorsement 
from the U.S. Government, the Military Departments, or any State or 
federal agency or government entity (e.g., ``Battalion Insurance 
Counselor,'' ``Unit Insurance Advisor,'' ``Servicemen's Group Life 
Insurance Conversion Consultant'').
    (C) Using desk space for anything other than a specific prearranged 
appointment. During such appointment, the agent will not be permitted 
to display desk signs or other materials announcing his or her name or 
agency or company affiliation.
    (D) Using an installation daily bulletin, marquee, newsletter, Web 
page, or other official notice to announce his or her presence or 
availability.
    (g) Denial, suspension, and withdrawal of installation solicitation 
privileges.
    (1) The installation commander will deny, suspend, or withdraw 
permission for an agency or company or its agents to conduct personal 
commercial solicitation activities on the installation if such action 
is in the best interests of the command. The grounds for taking these 
actions may include, but are not limited to:
    (i) Failure to meet the licensing and other regulatory requirements 
prescribed throughout this part, or violations of the State law where 
the installation is located. Commanders will request that appropriate 
State officials determine whether an agency, company or agent violated 
State law.
    (ii) Engaging in any prohibited practice in paragraph (f) of this 
section.
    (iii) Substantiated complaints or adverse reports regarding the 
quality of goods, services, or commodities, and the manner in which 
they are offered for sale.
    (iv) Knowing and willful violations of 15 U.S.C. 1601 with regard 
to use of consumer credit and personal property leases.
    (v) Knowing and willful violations of Public Law 109-290 with 
regard to financial services.
    (vi) Personal misconduct while on the installation.
    (vii) Possession or any attempt to obtain supplies of or use direct 
deposit forms or any other form or device used by Military Departments 
to direct a Service member's pay to a third party. This includes using 
a Service member's ``MyPay'' account or other similar internet medium 
for the purpose of establishing a direct deposit for the purchase of 
insurance or other investment products.
    (viii) Failure to incorporate and abide by the standards of 
fairness policies contained in DoD Instruction 1344.09, ``Indebtedness 
of Military Personnel'' (available at http://www.dtic.mil/whs/directives/corres/pdf/134409p.pdf).
    (2) Personal commercial solicitation privileges may be immediately 
suspended while an investigation is conducted, at the discretion of the 
installation commander. Upon suspending solicitation privileges, the 
installation commander will promptly inform the agent and the agency or 
company the agent represents, in writing.
    (3) The installation commander will determine whether to suspend or 
withdraw personal commercial solicitation privileges to the agent alone 
or extend it to the agency or company the agent represents. This 
decision is based on the circumstances of the particular case, 
including, but not limited to:

[[Page 60660]]

    (i) The nature and frequency of the violations.
    (ii) Whether other agents of the agency or company have engaged in 
such practices.
    (iii) Any other matters showing the culpability of an agent, the 
agency, or the company.
    (4) If the investigation determines an agent, agency, or company 
does not possess a valid license or the agent, agency, company, or 
product has failed to meet other State or federal regulatory 
requirements, the installation commander will immediately notify the 
appropriate regulatory authorities.
    (5) In a withdrawal action, the commander will:
    (i) Allow the agent, agency, or company an opportunity to show 
cause as to why the action should not be taken.
    (ii) Make a final decision regarding withdrawal based upon the 
entire record in each case.
    (6) The installation commander will report to his or her Military 
Department concerns or complaints involving the quality or suitability 
of products or concerns or complaints involving marketing methods used 
to sell those products.
    (7) The installation commander will report any withdrawal of 
insurance product or securities solicitation privileges to the 
appropriate regulatory authorities.
    (8) The installation commander will inform their Military 
Department of any withdrawal or reinstatement of an agent, agency, or 
company's personal commercial solicitation privileges and, if 
warranted, may recommend extending that action to other DoD 
installations.
    (i) The Secretary of the Military Department concerned will inform 
the USD(P&R) immediately of the withdrawal or reinstatement and may 
extend the action to other military installations in that Department.
    (ii) USD(P&R) will maintain a list of companies, agencies, and 
agents whose privileges have been withdrawn on any or all DoD 
installations. At a minimum, USD(P&R) will request review of the 
Solicitation Privileges Report from the Military Departments during the 
last month of each fiscal quarter. This list may be viewed at 
www.militaryonesource.mil. Following consultation with the Military 
Department concerned, the USD(P&R) may order restrictive actions 
extended to other Military Departments.
    (9) Withdrawal of privileges may be permanent or for a set period 
of time. If for a set period, the agent, agency, or company may reapply 
for permission to solicit through the installation commander or 
Military Department originally imposing the restriction when that 
period expires. The installation commander or Military Department 
reinstating permission to solicit will notify the USD(P&R) and 
appropriate State and federal regulatory agencies when such suspensions 
or withdrawals are lifted.
    (10) The Secretaries of the Military Departments may direct the 
Armed Forces Disciplinary Control Boards in all geographical areas in 
which the grounds for withdrawal action have occurred to consider all 
applicable information and take action the Boards deem appropriate.
    (h) Advertising and commercial sponsorship. (1) The DoD expects 
commercial enterprises soliciting DoD personnel to observe the highest 
business ethics in advertisements in unofficial military publications 
when describing goods, services, commodities, and the terms of the sale 
(including guarantees, warranties, etc.).
    (2) The advertising of credit terms will conform to the provisions 
of 15 U.S.C. 1601 as implemented by Federal Reserve Board Regulation Z, 
in accordance with 12 CFR part 226.
    (3) Personal commercial solicitors may provide commercial 
sponsorship to DoD MWR programs or events in accordance with DoD 
Instruction 1015.10. However, sponsorship may not be used as a means to 
obtain personal contact information for any participant at these events 
without written permission from the individual participant. 
Additionally, commercial sponsors may not use sponsorship to advertise 
products or services not specifically agreed to in the sponsorship 
agreement.
    (4) Commercial sponsorship program personnel must obtain 
concurrence of the installation education advisor prior to accepting 
sponsorship from educational institutions. The installation educational 
advisor will ensure that all educational institutions desiring to serve 
as an MWR program or event sponsor meet the minimum eligibility 
requirements to enter into a Voluntary Education Partnership memorandum 
of understanding (MOU) with the DoD, as set forth in Enclosure 3 of DoD 
Instruction 1322.25, although such an MOU does not need to be in place. 
Additionally, if an educational institution enters into a partnership 
or agreement with a non-federal entity through an arrangement such as 
sponsorship or donation, the educational institution is not authorized 
to market on the installation or provide promotional items through that 
partnership or agreement. Only educational institutions participating 
in an education fair and granted access to the installation in 
accordance with DoD Instruction 1322.25 may provide promotional items 
on the installation during the education fair event.
    (5) The installation commander may permit organizations to display 
sales literature in designated locations, subject to command policies. 
In accordance with Volume 5 of DoD 7000.14-R, ``Department of Defense 
Financial Management Regulations (FMRS)'' (available at http://comptroller.defense.gov/Portals/45/documents/fmr/Volume_05.pdf) 
distribution of competitive literature or forms by off-base financial 
institutions is prohibited on installations where on-base financial 
institutions exist.
    (i) Financial education programs. (1) The Military Departments will 
develop and disseminate information and provide educational programs 
for Service members on their personal financial affairs, including such 
subjects as insurance, government benefits, savings, budgeting, and 
other financial education and assistance requirements, as outlined in 
DoD Instruction 1342.22, ``Military Family Readiness'' (available at 
http://www.dtic.mil/whs/directives/corres/pdf/134222p.pdf). In 
addition, the installation commander will:
    (i) Ensure that all instructors are qualified as appropriate for 
the subject matter presented. See paragraphs (i)(3) and (i)(4) of this 
section for guidance on using on-base financial institutions or other 
non-government organization resources for financial education purposes.
    (ii) Make qualified personnel and facilities available for 
individual counseling on loans and consumer credit transactions in 
order to encourage thriftiness and financial responsibility and promote 
a better understanding of the wise use of credit, as prescribed in 
Chapter 34 of Volume 5 of DoD 7000.14-R.
    (iii) Encourage Service members to seek advice from a legal 
assistance officer, the installation financial counselor, their own 
lawyers, or a financial counselor before making a substantial loan or 
credit commitment.
    (iv) Provide advice and guidance to DoD personnel who have a 
complaint pursuant to DoD Instruction 1344.09 or who allege a criminal 
violation of its provisions, including referral to the appropriate 
regulatory agency for processing of the complaint.
    (2) On-base financial institutions must provide financial 
counseling services as an integral part of their financial services 
offerings.

[[Page 60661]]

    (3) Representatives of and materials provided by on-base financial 
institutions may be used to provide the financial education programs 
and information required by this part, subject to the following 
conditions:
    (i) If the on-base financial institution sells insurance products 
or securities or has any affiliation with an agency or company that 
sells or markets insurance or other financial products, the 
installation commander will consider that agency's or company's history 
of complying with this part before authorizing the on-base financial 
institution to provide financial education.
    (ii) On-base financial institution educators must agree to use 
appropriate disclaimers in their presentations and other educational 
materials. The disclaimers must clearly indicate that the educators do 
not endorse or favor any commercial supplier, product, or service or 
promote the services of a specific financial institution.
    (4) Use of other non-government organizations to provide financial 
education programs is limited as follows:
    (i) Under no circumstances will commercial agents, including 
employees or representatives of commercial loan, finance, insurance, or 
investment companies, be used.
    (ii) The limitation in paragraph (i)(4)(i) of this section does not 
apply to educational programs and information regarding the Survivor 
Benefits Program. It also does not apply to government benefits 
provided by tax-exempt organizations pursuant to 26 U.S.C. 501(c) or by 
organizations providing government benefits under a contract with the 
government.
    (iii) Expert educators in personal financial affairs from non-
government, non-commercial organizations may provide the financial 
education programs and information required by this part. The 
presentations and materials used by the educators must contain 
appropriate disclaimers demonstrating no endorsement of the 
organization by DoD or the Military Departments concerned. Such expert 
educators and their materials must be approved by a Presidentially 
appointed, Senate-confirmed (PAS) official of the Military Department 
concerned. The initial approval will last for three years; 
reauthorization for additional three-year periods is subject to review 
by such a PAS official that a continued need exists for the 
organization's services. The Military Department will use the following 
criteria when considering whether to permit a non-government, non-
commercial organization to present a financial education program or 
provide materials on personal financial affairs:
    (A) The organization must qualify as a tax-exempt organization in 
accordance with paragraph (c)(3) or (c)(23) of 26 U.S.C. 501.
    (B) If the organization has any affiliation with an agency or 
company that sells or markets insurance or other financial products, 
the approval authority will consider that agency's or company's history 
of complying with this part.
    (C) Non-government organization educators must agree to use 
appropriate disclaimers in their presentations and other educational 
materials which clearly indicate that they and the DoD do not endorse 
or favor any commercial supplier, product, or service or promote the 
services of a specific financial institution.
    (iv) Presentations by approved non-government, non-commercial 
organizations will be conducted only at the express request of the 
installation commander.
    (v) Any educational institutions providing financial education 
programs must be approved by the installation education advisor and 
meet the criteria outlined in Enclosure 3 of DoD Instruction 1322.25 
for offering educational programs on base.

Appendix A to Part 50--Life Insurance Products and Securities

    (a) Life insurance product content prerequisites. In addition to 
the required disclosures listed in Section 10 of Public Law 109-290, 
the following prerequisites apply to the sale of life insurance 
products to Service members and their families on DoD installations:
    (1) Life insurance agencies and companies must provide a written 
description for each product or service they intend to market.
    (i) Descriptions must be written in plain language and must 
fully disclose the fundamental nature of the policy.
    (ii) All forms to be used must be approved by and filed with the 
insurance department of the State where the installation is located, 
where applicable.
    (iii) Life insurance products marketed on overseas installations 
must conform to the standards prescribed by the laws of the State 
where the agency or company is domiciled.
    (2) Life insurance products offered and sold worldwide, other 
than certificates or other evidence of insurance issued by a self-
insured association, must:
    (i) Comply with the insurance laws of the State or country in 
which the installation is located and the requirements of this part.
    (ii) Contain no restrictions by reason of the insured's military 
service or military occupational specialty, unless such restrictions 
are clearly indicated on the face of the contract.
    (iii) Plainly indicate any extra premium charges imposed by 
reason of the insured's military service or military occupational 
specialty.
    (iv) Contain no variation in the amount of death benefit or 
premium based on the length of time the contract has been in force, 
unless all such variations are clearly described in the contract.
    (3) Life insurance policies must be written in plain language 
and use type font large enough to be easily read; all provisions of 
the policy must be in a font type that is at least as large as the 
font used for the majority of the policy. The policies must inform 
Service members of:
    (i) The availability and cost of government-subsidized 
Servicemen's Group Life Insurance.
    (ii) The address and phone number where consumer complaints are 
received by the State Insurance Commissioner for the State in which 
the insurance product is being sold. For policies sold overseas, the 
disclosure must include the address and phone number where the state 
insurance commissioner for the State which has issued the agent a 
resident license or where the agency or company is domiciled 
receives consumer complaints, as applicable.
    (iii) That the U.S. Government has in no way sanctioned, 
recommended, or encouraged the sale of the product being offered.
    (4) To comply with paragraphs (a)(2)(ii), (a)(2)(iii), and 
(a)(2)(iv) of this appendix, an appropriate reference stamped on the 
first page of the contract will draw the attention of the 
policyholder to any restrictions by reason of the insured's military 
service or military occupational specialty. The reference will 
describe any extra premium charges and any variations in the amount 
of death benefit or premium based upon the length of time the 
contract has been in force.
    (5) Variable life insurance products may be offered by 
appropriately licensed insurance agents or securities dealers, 
provided the products meet the criteria of the appropriate insurance 
regulatory agency and the Securities and Exchange Commission.
    (6) Life insurance products will not be marketed or sold 
disguised as investments. If there is a savings component to a life 
insurance product, the agent will provide the customer written 
documentation which clearly explains how much of the premium goes to 
the savings component per year, broken down over the life of the 
policy. This document also must show the total amount per year 
allocated to life insurance premiums. The customer must receive a 
copy of this document signed by the insurance agent.
    (b) Sale of securities. In addition to requirements listed in 
Section 5 of Public Law 109-290, the following applies to the sale 
of securities on DoD installations:
    (1) All securities must be registered with the Securities and 
Exchange Commission in accordance with the Securities Act of 1933, 
and all sales must comply with Securities and Exchange Commission 
regulations and the regulations of the Financial Industry Regulatory 
Authority.
    (2) Where the accredited insurer's policy permits, an overseas 
accredited life insurance

[[Page 60662]]

agent, if qualified to engage in security activities as a registered 
representative of a broker or dealer registered with the Financial 
Industry Regulatory Authority and the Securities and Exchange 
Commission, may offer life insurance products and securities for 
sale simultaneously. In cases of commingled sales, the allotment of 
pay for the purchase of securities cannot be made to the insurer.
    (c) Use of the allotment of pay system. (1) Allotments of 
military pay for life insurance products will be made in accordance 
with DoD 7000.14-R.
    (2) For personnel in pay grades E-4 and below to obtain 
financial counseling, at least 7 calendar days must elapse between 
the signing of a life insurance application and the certification of 
a military pay allotment for any supplemental commercial life 
insurance. Installation finance officers are responsible for 
ensuring this 7-day period is monitored and enforced. The 
purchaser's commanding officer may grant a waiver of the requirement 
for a 7-day period for good cause, such as the purchaser's imminent 
deployment or permanent change of station.

Appendix B to Part 50--Overseas Life Insurance Registration Program

    (a) Registration criteria. (1) Initial registration. (i) 
Insurers must demonstrate continuous successful operation in the 
life insurance business for not less than 5 years as of December 31 
of the year preceding the date of filing the application.
    (ii) Insurers must be listed in A.M. Best's Rating and Criteria 
Center and be assigned a financial strength rating of B+ (Very Good) 
or better, or an equivalent ranking from an independent insurance 
ranking agency, for the business year preceding the government's 
fiscal year for which registration is sought.
    (2) Re-registration. (i) Insurers must demonstrate continuous 
successful operation in the life insurance business, as described in 
paragraph (a)(1)(i) of this appendix.
    (ii) Insurers must retain an A.M. Best financial strength rating 
of B+ or better, as described in paragraph (a)(1)(ii) of this 
appendix.
    (iii) Insurers must demonstrate a record of compliance with the 
policies found in this part.
    (2) Waiver provisions. Waivers of the initial registration or 
re-registration provisions will be considered for those insurers 
demonstrating substantial compliance with paragraphs (a)(1) and 
(a)(2) of this appendix.
    (b) Application instructions--(1) Annual application deadline. 
Insurers must apply by June 30 of each year for life insurance 
solicitation privileges on overseas U.S. military installations for 
the next fiscal year beginning October 1. Applications emailed, 
faxed, or postmarked after June 30 will not be considered.
    (2) Application prerequisites. (i) An application letter signed 
by the President, Vice President, or designated official of the 
insurance agency or company will be forwarded to the USD(P&R), 
Attention: MWR and Resale Policy Directorate, 4000 Defense Pentagon, 
Washington, DC 20301-4000. The insurance agency or company must meet 
the registration criteria in paragraphs (a)(1) or (a)(2) of this 
appendix, or must obtain a waiver, provided for in paragraph (a)(2) 
of this appendix, to satisfy application prerequisites.
    (ii) The application letter will contain the following 
information, submitted in the order listed (where criteria are not 
applicable, the letter will so state):
    (A) The overseas Combatant Commands (i.e., United States 
European Command, United States Pacific Command, United States 
Central Command, United States Southern Command and United States 
Africa Command) where the agency or company presently solicits, or 
plans to solicit, on U.S. military installations.
    (B) A statement that the agency or company complies with the 
applicable laws of the country or countries in which it proposes to 
solicit. This includes all national, provincial, city, or county 
laws or ordinances of any country, as applicable.
    (C) A statement that the products for sale conform to the 
standards prescribed in paragraphs (a)(1) through (a)(6) of Appendix 
A and those products contain only the standard provisions, such as 
those prescribed by the laws of the State where the company's 
headquarters are located.
    (D) A statement that the agency or company will assume full 
responsibility for the acts of its agents with respect to 
solicitation. If warranted, the number of agents may be limited by 
the overseas command concerned.
    (E) A statement that the agency or company will use only agents 
licensed by the appropriate State and registered by the overseas 
command concerned to sell to DoD personnel on DoD installations.
    (F) A statement that the agency's or company's agents are 
appointed in accordance with the prerequisites established in 
paragraph (c) of this appendix.
    (G) Any explanatory or supplemental comments that will assist in 
evaluating the application.
    (iii) If requested by the MWR and Resale Policy Directorate, the 
agency or company will provide additional facts or statistics beyond 
those normally involved in registration.
    (3) Subsidiaries. If a company is a life insurance company 
subsidiary, it must be registered separately on its own merits.
    (c) Agent requirements. (1) An agent must possess a current 
State license. A Combatant Commander may waive this requirement for 
a registered agent continuously residing and successfully selling 
life insurance in foreign areas who, through no fault of his or her 
own and due to State or other jurisdiction law (or regulation) 
governing domicile or licensing requirements, forfeits eligibility 
for a State license. The request for a waiver will contain the name 
of the State or other jurisdiction that would not renew the agent's 
license.
    (2) Agents may represent only one registered commercial 
insurance agency or company. This principle may be waived by the 
overseas Combatant Commander if multiple representations are in the 
best interest of DoD personnel.
    (3) An agent must have at least 1 year of successful life 
insurance sales experience in the United States or its territories 
(including Guam and the Northern Mariana Islands), generally within 
the 5 years preceding the date of initial application, in order to 
be approved for overseas solicitation.
    (4) The overseas Combatant Commanders may exercise further agent 
control procedures as necessary.
    (5) Once registered in an overseas area, an agent may not change 
affiliation from the staff of one agency or company to another and 
retain his or her registration, unless the previous agency or 
company agrees in writing to retaining the registration. Overseas 
Combatant Commanders have final authority to determine whether the 
agent may retain his or her registration or will have to re-
register.
    (d) Announcement of registration. (1) The DoD will announce 
approved Overseas Life Insurance Registration applicants as soon as 
practicable by notice to each applicant and by a list released 
annually in September to the appropriate overseas Combatant 
Commanders. Approval does not constitute DoD endorsement of the 
insurer or its products. Any advertising by insurers or verbal 
representation by their agents which suggests such endorsement is 
prohibited.
    (2) In the event registration is denied, specific reasons for 
the denial will be provided to the applicant.
    (i) The applicant will have 30 days from the receipt of 
notification of denial of registration (sent certified mail, return 
receipt requested) in which to request reconsideration of the 
original decision. This request must be in writing and accompanied 
by substantiating data or information in rebuttal of the specific 
reasons upon which the denial was based.
    (ii) Action by USD(P&R) on a request for reconsideration is 
final.
    (iii) An applicant that is presently registered as an insurer 
will have 90 calendar days from final action denying registration in 
which to close operations.
    (3) Upon receiving a registration approval letter, each 
insurance agency or company will send the applicable overseas 
Combatant Commander a verified list of agents currently registered 
for overseas solicitation. Where applicable, the agency or company 
also will include the names and prior military affiliation of new 
agents for whom original registration and permission to solicit on 
the installation is requested. The DoD will furnish issuance for 
agent registration procedures in overseas areas to these insurers.
    (4) Material changes affecting the corporate status and 
financial condition of the agency or company that occur during the 
fiscal year of registration must be reported to USD(P&R) at the 
address in paragraph (b)(2)(i) of this appendix as they occur.
    (i) USD(P&R) reserves the right to terminate registration if 
such material changes appear to substantially affect the financial 
and operational standards described in paragraphs (a)(1) and (a)(2) 
of this appendix, on which registration was based.
    (ii) Failure to report such material changes may result in 
termination of registration, regardless of how it affects the 
standards.
    (5) If an analysis of information furnished by the agency or 
company indicates that

[[Page 60663]]

unfavorable trends are developing that could adversely affect the 
agency's or company's future operations, USD(P&R) may opt to bring 
such matters to the attention of the agency or company and request a 
statement as to what action, if any, is considered to deal with such 
unfavorable trends.


    Dated: August 29, 2016.
Aaron Siegel,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2016-21092 Filed 9-1-16; 8:45 am]
 BILLING CODE 5001-06-P