Military Personnel: DOD Needs Better Controls over Supplemental  
Life Insurance Solicitation Policies Involving Servicemembers	 
(29-JUN-05, GAO-05-696).					 
                                                                 
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.	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-696 					        
    ACCNO:   A28397						        
  TITLE:     Military Personnel: DOD Needs Better Controls over       
Supplemental Life Insurance Solicitation Policies Involving	 
Servicemembers							 
     DATE:   06/29/2005 
  SUBJECT:   Insurance regulation				 
	     Life insurance					 
	     Military personnel 				 
	     Military policies					 
	     Policy evaluation					 
	     Solicitations					 
	     Allotment						 
	     Policies and procedures				 

******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO Product.                                                 **
**                                                              **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced.  Tables are included, but    **
** may not resemble those in the printed version.               **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
******************************************************************
GAO-05-696

                 United States Government Accountability Office

                     GAO Report to Congressional Requesters

June 2005

MILITARY PERSONNEL

DOD Needs Better Controls over Supplemental Life Insurance Solicitation Policies
                            Involving Servicemembers

                                       a

GAO-05-696

[IMG]

June 2005

MILITARY PERSONNEL

DOD Needs Better Controls over Supplemental Life Insurance Solicitation Policies
Involving Servicemembers

  What GAO Found

DOD does not know the extent to which life insurance agents violate
oninstallation commercial solicitation regulations and does not actively
disseminate information on all confirmed violations to other parts of DOD
or to state insurance regulators. GAO found that violations are occurring.
For example, in responses to GAO's 2004 survey of personal financial
management program managers, one-quarter said prohibited practices such as
misleading sales presentations had occurred occasionally or routinely on
their installations in the prior 12 months. Also, between October 2001 and
October 2004, DOD revoked agents' on-installation solicitation approval at
least 26 times. The reason DOD does not have complete data on violations
is that it does not have adequate mechanisms for ensuring the systematic
tracking of violations. The dissemination problem is attributable to a
lack of oversight by the DOD policy office and an ambiguity in its
guidance. DOD cannot develop an effective and efficient process for
curbing violations without maintaining accurate data on the number, types,
and severity of violations and disseminating confirmed violation data to
relevant parties.

DOD cannot determine the extent to which DOD personnel adhere to allotment
regulations because of problems with DOD's payroll databases and the
different ways in which regulations are implemented. DOD's Financial
Management Regulations, among other things, restrict who can submit an
allotment form for supplemental life insurance. GAO could not determine
the number of servicemembers with supplemental life insurance allotments
due to database limitations, such as all insurance allotments (for
example, for life and automobile) sharing the same code. Contrary to
regulations, GAO found finance personnel accepting allotment forms without
confirming they came from authorized sources. Some said they did this to
ensure that policies started promptly. Database problems limit DOD's
visibility over prohibited practices, such as those for group solicitation
and the acceptance of allotment forms without proper authorization. In
addition, GAO could not substantiate the assertion that servicemembers are
prevented from using allotments to purchase supplemental life insurance
and has identified reasons why this is probably not a widespread problem.

DOD's revised directive on commercial insurance solicitation practices on
DOD installations adds new requirements, but does not fully address
oversight deficiencies. The revised directive will incorporate the interim
policy and practices now in place and, to partially address the problems
cited above, will add requirements for gathering and disseminating
information on confirmed violations. Those requirements, however, will
focus on banned agents only, rather than all confirmed violations. The
result will be DOD's continuing inability to identify the number, types,
and severity of all violations, or to recognize patterns of violations.
The directive will also add requirements that installation commanders
inquire into alleged violations of the solicitation regulation.

United States Government Accountability Office

Contents

  Letter

Results in Brief
Background
DOD Does Not Know the Extent of Solicitation Violations and Does

Not Disseminate Information on All Confirmed Violations

Data on Payroll Allotments for Supplemental Life Insurance Unreliable and
Procedures for Submitting Such Allotments Are Not Always Being Followed

DOD's Revised Directive Adds New Requirements, but Does Not

Fully Address Oversight Deficiencies Conclusions Recommendations for
Executive Action Agency Comments and Our Evaluation

1 5 7

12

23

32 36 37 39

Appendixes

        Appendix I: Scope and Methodology 45 Appendix II: Details on Selected
           Recent In-Depth Investigations 50 Appendix III: Allotment Forms 58
      Appendix IV: Comments from the Department of Defense 60 Appendix V: GAO
                                         Contact and Staff Acknowledgments 65

  Related GAO Products

Tables         Table 1: 14 Practices Prohibited by the DOD Directive on 
                                                                  Personal 
                    Commercial Solicitation on DOD Installations            9 
                Table 2: Locations and Years That Commanders Banned Agents 
                         from an Installation-October 2001 through October 
                                        2004                               16 
           Table 3: Installations in the United States where GAO Conducted 
                       Site Visits from July to December 2004              46 
Figures Figure 1: Personal Financial Management Program Managers'       
           Perceptions of the Frequency with Which Selected                
                          Solicitation Prohibitions Were Violated on Their 
                           Installation from January through December 2004 14 

Contents

Figure 2:	States Where Installation Commanders Banned Agents from October
2001 through October 2004, States Reporting Ongoing Investigations of
Supplemental Life Insurance Solicitation to Servicemembers in December
2004, and the Number of Active Duty Servicemembers in the States

Abbreviations

DFAS Defense Finance and Accounting Service
DOD Department of Defense
DODIG Department of Defense Inspector General
SGLI Servicemembers' Group Life Insurance

This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.

A

United States Government Accountability Office Washington, D.C. 20548

June 29, 2005

Congressional Requesters

Military personnel are engaged overseas in hostile actions that threaten
their lives and possibly the future financial security of their families,
should they die. As a result, some servicemembers purchase additional life
insurance to supplement the benefits available through the
governmentoffered Servicemembers' Group Life Insurance (SGLI) and other
programs. In July 2004, we reported on the lump sum benefits and annuities
available to servicemembers' survivors as well as the survivors of
personnel employed by federal, state, and large municipal governments.1
Recently, legislation was enacted to increase the maximum SGLI coverage to
$400,000 and the death gratuity payment from $12,420 to $100,000.2 With
the enactment of this legislation, the number of policies and amounts of
supplemental life insurance sold to servicemembers could change from
current levels.

The Department of Defense (DOD) and the services have regulations to
govern on-installation solicitation for supplemental life insurance, as
well as other types of commercial products. Among other things, an
installation must approve agents before they are allowed to solicit, and
the agents must agree to abide by regulations that include prohibitions of
14 types of practices. Violation of the regulations can result in the
denial, suspension, or revocation of agents' or companies' approvals to
solicit on the installation. Hereafter such agents are referred to as
banned agents.

Servicemembers who elect to supplement SGLI's coverage may purchase their
additional coverage using payroll allotments or other types of payments
such as checks or electronic transfers from checking or savings accounts.
An important feature of the allotment process is a DOD-wide regulation
that requires either the servicemembers or their representatives

1 See GAO, Military Personnel: Survivor Benefits for Servicemembers and
Federal, State, and City Government Employees, GAO-04-814 (Washington,
D.C.: July 15, 2004). Additional information on the benefits provided to
survivors of deceased servicemembers is available in Congressional
Research Service, Military Death Benefits: Status and Proposals, RL32769
(Washington, D.C.: Feb. 16, 2005).

2 Emergency Supplemental Appropriations Act for Defense, the Global War on
Terror, and Tsunami Relief, for the Fiscal Year Ending September 30, 2005,
Pub. L. No. 109-13, sec. 10121013 (May 11, 2005).

with a special power of attorney to submit the allotment form for
supplemental life insurance.

Some servicemembers have reported experiencing problems when purchasing
supplemental life insurance. For example, a soldier described misleading
sales presentations and other concerns during congressional hearings in
2004. Similarly, DOD reports in 1999 and 2000 cited problems that included
deceptive sales practices, violations of DOD policies regarding
on-installation insurance solicitation, ineffective state insurance
regulation programs, and inadequate safeguards in the allotment system
used to pay for the supplemental life insurance.3 Negative effects
associated with activities such as misleading sales presentations could
include servicemembers' purchasing a product that either can be bought
elsewhere more cheaply or does not meet their life insurance needs.

Recently, a different type of life insurance-related concern has also been
voiced. Some life insurance officials have asserted that servicemembers'
chains of command have prevented personnel who wanted additional life
insurance from actually purchasing it when they attempted to set up a
payroll allotment.4 If servicemembers who truly want supplemental life
insurance are prevented from obtaining it, they may have less than their
desired level of coverage.

The Office of the Under Secretary of Defense for Personnel and Readiness
is responsible for developing the policies and procedures governing
personal commercial solicitation; and the heads of DOD components, or
their designees, are responsible for ensuring implementation of the
regulations and compliance with their provisions. The Defense Finance and
Accounting Service (DFAS) oversees the financial management regulations
and the payroll computer systems and databases.

3 See Final Report: Insurance Solicitation Practices on Department of
Defense Installations (May 15, 2000), and DOD Office of the Inspector
General, Commercial Life Insurance Sales Procedures in DOD, Report No.
99-106 (Arlington, Va.: Mar. 10, 1999).

4 See, for example, Amy Klamper, "Life Insurance for Troops in Iraq
Nixed," National Journal (Apr. 3, 2004).

In response to earlier problems and recommendations for change, the Office
of Morale, Welfare, and Recreation Policy-within the Office of the Under
Secretary of Defense for Personnel and Readiness-has been revising the DOD
directive that governs the marketing and sale of life insurance and other
commercial products on DOD installations.5 The Department of Defense
Appropriations Act for Fiscal Year 2005 contained provisions indicating
that the revised directive cannot be implemented until at least 90 days
after we issue the present report.

As agreed with your offices, this report addresses three issues: (1) the
extent to which agents are violating DOD's policies governing the
solicitation of supplemental life insurance to active duty servicemembers
on domestic installations; (2) the extent to which DOD personnel are
adhering to regulations that govern how active duty servicemembers
establish payroll allotments to purchase supplemental life insurance; and
(3) the extent to which the new directive addresses ongoing problems in
supplemental life insurance solicitation policies.

5 DOD Directive 1344.7, Personal Commercial Solicitation on DOD
Installations (Feb. 13, 1986).

In conducting this review, we limited the scope of our work to
supplemental life insurance solicitations occurring on installations in
the United States and to active duty servicemembers.6 Additional emphasis
was given to findings pertaining to junior enlisted servicemembers because
DOD and insurance officials have indicated that this subgroup is more
likely to encounter problems with the marketing and sale of supplemental
life insurance as well as with establishing payroll allotments for such
purchases. Numerous methods were used to gather and assess information for
this review. We examined DOD, service, and selected installation policies
on personal commercial solicitation on installations and the establishment
of allotments for supplemental life insurance, as well as oversight
management principles identified in the Government Performance and Results
Act of 1993.7 We also reviewed GAO, DOD, life insurance industry, and
other reports. We interviewed officials from DOD, life insurance companies
and associations, and other organizations such as the Consumer Federation
of America to identify the many perspectives on the issues being studied.
In conjunction with our work on another report, we sent a survey to all
175 managers of DOD's personal financial management programs on
installations in the United States.8 We also surveyed the insurance
commissioners for the 50 states, the District of Columbia, and four
territories: American Samoa, Guam, Puerto Rico, and the Virgin Islands. In
addition, we interviewed personnel from the state insurance commissioner's
office for 4 of the 6 states in which we conducted site visits to military
installations, as well as personnel from the state insurance
commissioner's office in Georgia. We also asked insurance companies and
two national insurance associations to identify agents and company
representatives who could be interviewed about solicitation and allotment
practices at locations near the six installations we visited.

During our six site visits, we requested materials related to the
marketing and sale of supplemental life insurance and the establishment of
allotments for that purpose. Those materials included a list of life
insurance agents approved for on-installation solicitation, handouts
distributed to assist servicemembers in determining their need for
supplemental life insurance,

6 An ongoing GAO effort is examining the characteristics of the commercial
products being marketed to servicemembers and the regulation of those
products.

7 Pub. L. No. 103-62 (Aug. 3, 1993).

8 See GAO, Military Personnel: More DOD Actions Needed to Address
Servicemembers' Personal Financial Management Issues, GAO-05-348
(Washington, D.C.: Apr. 26, 2005).

documentation of violations of personal commercial solicitation and
insurance-related policies, and complaints related to insurance
solicitation and allotment processing. While on site visits, we conducted
interviews or focus groups with installation leaders; the coordinator for
the installation's personal commercial solicitation program;
servicemembers; legal assistance attorneys from the Judge Advocate General
corps; finance department personnel who managed and processed allotments;
family support center staff responsible for personal financial management
training and counseling activities; staff from morale, welfare, and
recreation; and representatives of on-installation banks and credit
unions. We observed the methods used to process and enter allotments for
supplemental life insurance into the pay system. We assessed the
reliability of allotment databases, and we later note in this report,
limitations associated with the databases that prevented us from
accurately estimating the number of allotments or amount of payments for
supplemental life insurance. We performed our work from May 2004 through
May 2005 in accordance with generally accepted governmental auditing
standards. Additional information on our scope and methodology can be
found in appendix I.

Results in Brief	DOD does not know the extent to which agents are
violating DOD's regulations governing the solicitation of supplemental
life insurance to active duty servicemembers on installations in the
United States and does not actively disseminate information on all
confirmed violations to other interested parties. DOD had not collected
information on the number, types, and severity of violations. Data from
our survey of all DOD personal financial program managers on domestic
installations, our interviews conducted on six installations, and cases
where life insurance agents had been banned from installations indicate
that solicitation violations are occurring. In response to our 2004
survey, at least one-quarter of financial program managers responding to
our survey indicated that five types of prohibited life insurance
practices (such as providing misleading sales presentations) occasionally
or routinely occurred on their installation during the preceding 12
months. Also, at least 26 cases of banning agents for violations occurred
between October 2001 and October 2004. Prior to our request for DOD to
determine the number of enforcement actions when agents had been banned,
DOD had not actively disseminated violation information to other parts of
DOD or to state regulators. The absence of evaluative and reporting
requirements in DOD's solicitation directive contributed to DOD's failure
to assemble and disseminate such data. Failure to gather comprehensive
information on all violators and

disseminate it to all parts of DOD and appropriate state regulators limits
the military's ability to effectively and efficiently identify problem
agents or companies as well as patterns of violations.

DOD cannot determine the extent to which DOD personnel adhere to allotment
regulations because of problems with DOD's payroll databases and the
different ways regulations are implemented. Database constraints prevented
us from determining the number of servicemembers using supplemental life
insurance allotments or the amount of money being paid to companies. We
were unable to develop reliable estimates because of database quality
concerns that we have previously documented as well as problems with the
allotment forms. These problems limit the visibility that DOD and the
installations have over the perceived need by servicemembers for
supplemental life insurance. Second, contrary to DFAS regulations, some
finance personnel have accepted forms to start the allotments without
verifying that the person submitting the form was authorized to do so.
Finance personnel said they do so to ensure that policies start promptly,
but starting allotments without servicemembers' awareness can negatively
affect members' finances and their unit's morale and readiness. The DOD
solicitation directive discusses a 7-day "cooling-off" period between when
E1s, E2s, and E3s sign a supplemental life insurance application and when
finance personnel certify the allotment. But ambiguity in the requirement
and the use of generic allotment forms can result in inconsistent
enforcement of this requirement. Finally, some insurance officials
maintain that chains of command prevent servicemembers from purchasing
life insurance by not processing their allotments. We were unable to
substantiate that assertion, based on our inability to obtain sufficient
participation in our servicemember focus groups. Servicemembers may have
decided not to purchase a particular policy for other reasons such as
buyer's remorse or finding a more economically priced policy.

DOD's revised directive on personal commercial solicitation on DOD
installations adds new requirements, but does not fully address oversight
problems. The draft directive incorporates existing interim guidance on
financial education and current procedures pertaining to advertising and
commercial sponsorship by solicitors. The draft directive also adds new
requirements for gathering and disseminating data on solicitation
violations, including maintaining a list of banned agents and
disseminating such information to state regulators. However, the focus of
the new requirements is on banned agents only. As was noted earlier,
however, gathering and disseminating only the information concerning
violations severe enough to cause the banning of agents will prevent DOD
from

identifying the number, types, and severity of all confirmed violations,
or to recognize patterns of violations. The proposed new requirements also
include having installation commanders inquire into any alleged violations
of the solicitation regulation, and having insurance agents provide
servicemembers with a DOD-wide questionnaire to evaluate their
solicitation experience. The installation commander's inquiries could
improve DOD's oversight of solicitation violations if an additional
requirement existed for reporting all confirmed violations to higher-level
commands. The questionnaire may be of limited value because it documents
interactions that were not described as problems during our site
visits-that is, insurance agents complying with requirements by soliciting
in one-on-one prearranged appointments with servicemembers. An additional
change in the directive, requiring insurance agents to clearly identify
insurance products, could result in servicemembers' having better
information for making decisions on purchasing supplemental life
insurance.

We are making five recommendations to improve DOD's policies and practices
regarding supplemental life insurance solicitation on bases in the United
States and the allotment process to purchase such products. Our
recommendations pertain to enhancements to oversight requirements for
evaluation and reporting violations, clarifications of ambiguous
requirements, and improvements to the procedures used for allotments to
purchase supplemental life insurance. In commenting on a draft of this
report, DOD concurred with our recommendations.

Background	DOD's directive on personal commercial solicitation establishes
the policies and practices governing supplemental life insurance sales on
installations in the United States and overseas.9 Each service provides
additional policies and practices regarding on-installation commercial
solicitation, and some installations further specify how these DOD and
service policies and practices will be implemented locally.10 Importantly,
DOD and the service policies do not cover supplemental life insurance

9 DOD Directive 1344.7, Personal Commercial Solicitation on DOD
Installations (Feb. 13, 1986).

10 Army Regulation 210.7, Commercial Solicitation on Army Installations
(Apr. 22, 1986); Secretary of the Navy Instruction 1740.2D, Solicitation
and Conduct of Personal Commercial Affairs (Apr. 27, 1987) for the Navy
and the Marine Corps; and Air Force Policy Directive 36-29, Military
Standards (June 1, 1996).

solicitation that occurs off an installation. For example, servicemembers
can obtain life insurance through the Internet or from companies that
advertise in private-sector publications aimed at military personnel.
Also, some life insurance agents might sell supplemental life insurance
off the installation after (1) the agents initially generated leads on
potential customers through on-installation efforts such as sponsorship of
morale, welfare, and recreation events; or (2) other types of initial
contacts that include offering servicemembers a free meal at a local
restaurant.

Although the steps used to obtain permission to solicit on an installation
may vary, the DOD directive notes that solicitors must meet the following
requirements: be duly licensed, have the permission of the installation
commander, and have made a specific appointment with a servicemember and
conduct it in family quarters or other areas designated by the
installation commander. The supplemental life insurance products offered
on installations in the United States must comply with the insurance laws
for the applicable state, contain no restrictions by reason of military
service or occupation unless the restrictions are clearly stated on the
face of the contract, plainly indicate any extra premium charges if they
are imposed for reasons of military service or occupation, and contain no
variation in the amount of death benefit or premium based on the length of
time the contract has been in force unless the variations are clearly
described therein.

In addition to specifying requirements for the solicitors and the life
insurance products, the DOD directive identifies the 14 prohibited
practices, shown in table 1.11 Committing any of the prohibited practices
can result in an agent or an agent's affiliated insurance company being
banned. Among the other grounds for banning agents are failure to be duly
licensed to sell insurance products under applicable federal, state, or
local municipal laws; personal misconduct while on the installation;
possession or attempted possession of allotment forms or their
facsimiles;12 and substantiated complaints or adverse reports regarding
goods or services and the manner in which they are offered.

11 DOD Directive 1344.7, sec. 6.4.

12 DOD Directive 1344.7, sec. 6.5. This DOD directive authorizes an
installation commander to deny or revoke permission to an insurance agent
or affiliated insurance company in possession of or attempting to possess
allotment forms or their facsimiles to solicit on military installations.

Table 1: 14 Practices Prohibited by the DOD Directive on Personal
Commercial Solicitation on DOD Installations

                              Prohibited Practices

Solicitation of recruits, trainees, and transient personnel in a mass or captive
                                   audience.

Making appointments with or soliciting military personnel who are in
on-duty status.

Soliciting without appointment in areas utilized for housing or processing
of transient personnel, barracks areas used as quarters, unit areas,
family quarters, and areas provided by installation commanders for
appointed interviews.

se of official identification cards by retired or reserve members of the
military services to gain access to installations for the purpose of
soliciting.

UProcuring, attempting to procure, or supplying roster listings of DOD
personnel for commercial solicitation purposes.

Offering unfair, improper, and deceptive inducements to purchase or trade.

Using rebates to facilitate transactions or to eliminate competition.

Using manipulative, deceptive, or fraudulent devices, schemes, or
artifices, including misleading advertising and sales literature.

Using oral or written representations to suggest or give the appearance
that DOD sponsors or endorses any particular company, its agents, or the
goods, services, and commodities it sells.

Full-time DOD personnel making personal commercial solicitations or sales
to DOD personnel who are junior in rank or grade.

               Entering into any unauthorized or restricted area.

Using any portion of installation facilities, including quarters, as a
showroom or store for the sales of goods and services, unless otherwise
authorized.

Using any portion of installation facilities, including quarters, as a
showroom or store for the sales of goods and services, unless otherwise
authorized.

Advertising addresses or telephone numbers of commercial sales activities
conducted on the installation, except authorized activities conducted by
family members of military families residing in military housing.

                         Source: DOD Directive 1344.7.

During the past decade, DOD issued two reports that addressed problems
with on-installation supplemental life insurance solicitation. In March
1999, the DOD Inspector General (DODIG) found that improper solicitation
practices occurred at all 11 of the sampled installations.13 The improper
practices included presentations by unauthorized personnel, presentations
to captive audiences, solicitation during duty hours, solicitation in the
barracks, and subjecting servicemembers to sales pressure and misleading
sales presentations. The DODIG noted that the personal commercial
solicitation directive was adequate but that additional controls were
needed to administer and enforce the solicitation process. Among other
things, the DODIG suggested there was a need for improved oversight at the
installation level, stricter enforcement procedures when improper
solicitation practices are substantiated, and additional interface with
state regulatory authorities. In May 2000, a report commissioned by the
Office of the Under Secretary of Defense for Personnel and Readiness
reviewed insurance solicitation practices on DOD installations and
identified many of the same concerns and recommendations contained in the
DODIG report.14 In September 2000, DOD's Office of Force Management Policy
established an insurance solicitation oversight working group to develop a
strategy for eliminating prohibited life insurance solicitation practices
on DOD installations. The working group's recommended improvements were
included in a draft revision of the directive on personal commercial
solicitation, and this draft revision was published for public comment in
August 2003.

An important step in purchasing supplemental life insurance is making the
arrangement to pay for it. Some servicemembers pay for the insurance with
a payroll allotment,15 a process that is governed by the DOD's Financial
Management Regulation and individual service policies and is under the
responsibility of DFAS. While the process for starting an allotment for
supplemental life insurance varies across services and installations, it
can be summarized in three steps:

13 See DODIG, Report No. 99-106.

14 See Final Report: Insurance Solicitation Practices on Department of
Defense Installations.

15 DOD, Financial Management Regulation 7000.14-R, Vol. 7A, Definitions,
page xliv, indicates that an allotment is the definite portion of the pay
and allowance of a person in the military service, which DFAS is
authorized to pay directly to a person or an institution.

1.	Servicemembers or their representatives with a special power of
attorney complete an allotment form and submit it either directly to the
installation finance office or to the finance office through the
servicemembers' unit administrative office.

2.	The installation finance office processes the allotment requests and
electronically submits them to DFAS.

3.	The first monthly payments are made to vendors more than a month after
the forms are submitted, because the processing of the allotment requests
takes time and the once-a-month payments result in the need to wait for
half of the payments to be taken out of each of the servicemembers' next
two payroll deposits.

The allotments for all types of commercial insurance are supposed to be
coded as an AI discretionary allotment when they are entered into a DFAS
database.16 The procedure for purchasing SGLI with an allotment is
different from that used to purchase private supplemental life insurance
with an allotment. One reason is active duty servicemembers are
automatically insured for the maximum SGLI coverage. Servicemembers may
subsequently elect to reduce their SGLI coverage, or to cancel it
entirely.

DOD's effort to revise the directive began in 2002 after reports17 in 1999
and 2000 documented problems with supplemental life insurance solicitation
on installations and made recommendations for improvement. In 2003, DOD
obtained public comments on a draft directive during a public forum
available to interested parties. Those comments and other input from
sources such as DOD's general counsel served as the basis for a draft
directive published in the Federal Register on April 19, 2005, and
discussed during a public hearing held on May 6, 2005, to obtain
additional comments.

16 DOD, Financial Management Regulation 7000.14-R, Vol. 7A, Chapters 41
and 42 (February 2002), contains the policies and procedures for
allotments. Each military service also has additional allotment processing
policies and practices. See, for example, Army Regulation 37-104-4,
Military Pay and Allowances Policy and Procedures-Active Component,
Chapter 24 (Sept. 30, 1994).

17 DODIG, Report No. 99-106, and Final Report: Insurance Solicitation
Practices on Department of Defense Installations.

  DOD Does Not Know the Extent of Solicitation Violations and Does Not
  Disseminate Information on All Confirmed Violations

DOD does not know the extent to which life insurance agents are violating
regulations pertaining to on-installation personal commercial
solicitation, and it does not actively disseminate information about all
confirmed violations18 to other portions of DOD and state insurance
regulators. Although many of the sources that we contacted for our review
identified violations, DOD does not know how widespread the violations are
because it has not collected information on the number, types, and
severity of the violations. Even when violations have been severe enough
to result in commanders banning agents from their installation, DOD did
not actively provide that information to other installations or to state
insurance regulators. The absence of evaluative and reporting requirements
in the solicitation directive, as well as ambiguity in the directive about
the dissemination of information, are some of the reasons for these
situations that limit DOD's ability to provide oversight of supplemental
life insurance solicitation on installations and prevent violators from
having access to servicemembers on installations.

    DOD Does Not Know the Extent to Which Life Insurance Agents Have Violated
    Solicitation Policies on Domestic Installations

Because of the absence of evaluation and reporting requirements, DOD has
not collected the data that it needs to monitor the number, types, and
severity of life insurance agents' violations of DOD's regulations
regarding on-installation solicitation. But data from our review suggest
that the violations are not restricted to a few installations. Our data
regarding alleged violations of the 14 prohibited practices identified in
DOD's commercial solicitation directive came from multiple sources:
perceptions expressed in a DOD-wide survey and numerous interviews at six
installations; information on the number and geographical dispersion of
cases where installation commanders had banned agents during the past 3
years because of violations; and a review of in-depth documentation for
four of the cases serious enough to result in banning agents.

18 Confirmed violations are acts that an installation commander has
determined, after consideration of the entire record to include any
information submitted by the insurance company(s) and agent(s) involved,
are violations of DOD's commercial solicitation policies and procedures.

A survey of personal financial management program managers19 on
installations in the United States indicated that six types of prohibited
solicitation practices were perceived to have occurred with varying
frequency on their installations during the prior 12 months.20 More than
one-third of the managers indicated that misleading sales presentations
regarding supplemental life insurance had occurred occasionally or
routinely on their installations, and more than one-quarter said that four
of the other five prohibited practices had occurred at least occasionally
(see fig. 1). In interviews conducted during our visits to six
installations, multiple sources-for example, solicitation coordinators,
legal assistance attorneys, servicemembers, and insurance agents-indicated
that the types of violations shown in figure 1 had occurred on their
installations. For three or more of the six installations, multiple
sources told us of agents inappropriately using their military retiree
credentials to gain access to servicemembers for life insurance
solicitation purposes, life insurance agents possessing or processing
allotment forms, and life insurance agents participating in
military-sponsored training. The installations had little or no
documentation to show that the violations identified in the interviews had
been reported or investigated.

19 The personal financial management program manager is a professional
staff member designated and trained to organize and execute financial
planning and counseling programs for the military community. See
GAO-05-348 for additional details on the managers, the program, and other
findings from the survey.

20 The six types of violations used as survey items were based on findings
from the 1999 DODIG report (see DODIG, Report No. 99-106). The report
showed that seven types of prohibited practices occurred on the studied
installations. Because supplemental life insurance solicitation was one of
many issues covered in our survey, the other types of violations were
excluded to limit the time required to answer the survey.

Figure 1: Personal Financial Management Program Managers' Perceptions of
the Frequency with Which Selected Solicitation Prohibitions Were Violated
on Their Installation from January through December 2004

                42.7             20.5             24.8             12.0       

Misleading sales presentations

                46.0              23.9             22.1             8.0       

Solicitation in the barracks

                47.4              23.3             19.8             9.5       

Solicitation during duty hours

                49.2              20.3             21.2             9.3       

Presentations by unauthorized personnel

                50.4              21.9             18.5             9.2       

              Presentations to groups by life insurance personnel

                73.5              13.7              9.4       3.4             

              Required attendance at life insurance presentations

0 20406080 In percent

Never

Seldom Occasionally

Routinely Source: GAO.

After we asked DOD if it had a list of insurance agents and companies
whose solicitation privileges had been withdrawn, DOD requested the
information from the services and installations.21 As of April 2005, DOD's
request for information identified 51 cases that occurred on installations
in the United States from April 1998 through October 2004. Some
installations supplied information on enforcement actions that did not
result in the banishment of agents or companies. Table 2 provides
information on 26 cases in which commanders banned agents-25 from DOD's
list and one additional case we later identified-from October 2001 through
October 2004.22 Examining only the more recent cases minimizes the
possibility that a case would have been the basis for findings in the 1999
and 2000 DOD reports on supplemental life insurance. Table 2 shows that
the 26 cases occurred on 11 installations in eight states. Our analysis
additionally revealed that agents from one life insurance company were
involved in 9 (about 35 percent) of the 26 cases, and agents from another
company were involved in 6 (about 23 percent) of the cases.

21 After gathering the data for this review, DOD posted information about
the 51 cases on a DOD Web site.

22 It is likely that more than 26 enforcement actions resulted in
commanders banning agents from their installation during the period of
interest. DOD acknowledged that its list was probably incomplete; and we
found an additional case at Fort Bliss, Texas. Also, 6 of the 51 cases did
not include a date for the commander's actions, but the actions may have
occurred during our restricted period of interest. In addition, some of
the cases in DOD's list, such as those at Beale Air Force Base,
California, indicate that events occurred in multiple years, but we only
counted the events as one case. Finally, since DOD told us that its
request for information pertained to banned agents only, additional cases
would probably result if DOD made another request for all enforcement
actions.

Table 2: Locations and Years That Commanders Banned Agents from an
Installation-October 2001 through October 2004

                  State      Installation, listed by separate action     Year 
             California                         Beale Air Force Base     2003 
                                                Beale Air Force Base     2003 
                                    Camp Pendleton Marine Corps Base     2003 
                                    Camp Pendleton Marine Corps Base     2003 
                Georgia                                 Fort Benning     2003 
                                                        Fort Benning     2004 
                                                        Fort Benning     2004 
                                                        Fort Benning     2004 
                                                        Fort Benning     2004 
                                                        Fort Benning     2004 
                                                        Fort Benning     2004 
                                                         Fort Gordon     2003 
                                                         Fort Gordon     2003 
                                                         Fort Gordon     2003 
                                                         Fort Gordon     2003 
                                                         Fort Gordon     2004 
                 Kansas                     McConnell Air Force Base     2002 

         Illinois               Naval Station Great Lakes             2001 
       Mississippi     Naval Construction Battalion Center Gulfport   2003 
      North Carolina                    Fort Bragg                    2004 
                                        Fort Bragg                    2004 
          Texas                         Fort Bliss                    2003 
         Virginia                      Fort Eustis                    2002 
                                       Fort Eustis                    2002 
                                       Fort Eustis                    2004 
                            Naval Amphibious Base Little Creek        2003 

Source: DOD data, and GAO analysis.

Our review also examined the in-depth documentation for two cases from
Camp Pendleton, California, and two cases at Fort Benning, Georgia, both
of which are listed in table 2. The documentation, sometimes more than 200
pages, illustrates the situations that led to the violations, the types of
violations occurring, and the amount of effort required to conduct the
investigations. The cases are summarized as follows, and additional
details on each are provided in appendix II.

o 	Camp Pendleton: In 2003, an insurance agent requested and obtained
authorization to teach a class on veterans' affairs benefits and financial
planning to Marines. During the class, the agent said very little about
veterans' benefits but spoke at length about investments. The agent
distributed cards for Marines to provide contact information. Using this
information, the agent later sold Marines insurance policies at their
homes and on duty, sometimes without appointments. During the meetings,
Marines were given the impression that the agent represented the
Department of Veterans Affairs. This agent's solicitation privileges were
suspended for 2 years by the installation.

o 	Camp Pendleton: In 2003, insurance agents requested and obtained
permission to teach veterans' affairs classes to Marines fresh from boot
camp. The classes, with required attendance, started as veterans' benefits
discussions but shifted to investment sales pitches after noncommissioned
officers left the classrooms. Agents distributed applications, allotment
forms, and statements of understanding, encouraging participants to sign
quickly, not read the forms, leave the dollar amount lines blank, and
provide signed photocopies of their identification cards. The Marines were
not allowed to take any paperwork with them and were told that copies
would be sent to their home of record. The agents, including at least one
retired Marine, were fired by their employer. Refunds were offered to
those who purchased policies.

o 	Fort Benning: In 2003 and 2004, agents accessed soldiers in a basic
combat training brigade through unit non-commissioned officers for the
express purpose of providing financial planning classes. In unit
classrooms, the agents discussed the value of investing. At the end of the
presentations, soldiers who desired additional information completed a
form. Weeks later, the agents met with soldiers individually or in small
groups in the unit's area. The agents were fired from the companies they
represented, and several officers and enlisted personnel involved in
arranging the presentations were reprimanded. The manager for DOD's
personal commercial solicitation program said that he was unaware of any
other instance where enforcement included punishment of installation
personnel, but added that his office does not track such information.

o 	Fort Benning: In 2002, two agents accessed soldiers in the infantry
training brigade through unit non-commissioned officers for the express
purpose of providing financial management classes. The classes were

included on the training scheduled in conjunction with other personal
financial affairs presentations and were conducted in unit classrooms.
Non-commissioned officers escorted the soldiers to the classrooms.
According to the investigation, some of the non-commissioned officers had
knowledge of the solicitation actions taking place. These agents later had
their solicitation privileges revoked by the installation, and refunds
were provided to those who purchased policies.

DOD-wide, service-specific, and installation-level factors contribute to
the lack of information on violations. The absence of evaluation and
reporting requirements in DOD's directive on personal commercial
solicitation is a primary reason why the services and installations do not
emphasize assessment and why DOD cannot estimate the extent to which life
insurance agents are violating the 14 proscribed practices and other parts
of the directive.23 The absence at the installation level of documentation
of confirmed violations by life insurance agents is also caused by several
other factors, including: (1) the time it takes for personnel to lodge a
complaint and other personnel to investigate it; (2) reluctance to get
either the agents or installation personnel in trouble, especially when
the agents appear to have the support of someone in the chain of command;
and (3) the lack of knowledge about permitted and prohibited practices by
both individuals being solicited and other servicemembers who allow life
insurance agents to conduct financial training or perform other prohibited
practices.

The lack of documentation on confirmed violations can result in negative
outcomes for both DOD and the life insurance industry. For instance, DOD
is unable to identify the extent of specific types or patterns of
problems, such as multiple instances of the same violation for agents from
a single insurance company. Furthermore, DOD cannot determine whether
there are many agents violating the regulations on a few occasions; a
small number of agents violating the regulations on many occasions; or
many people talking about a relatively few, well-publicized violations.
Without knowing the extent of the problem, DOD cannot develop an effective
and efficient strategy for curbing the violations. The lack of
documentation could also negatively affect the life insurance industry and
its agents. "Broad brush" complaints create a negative image of the
industry. Some of the agents we interviewed were concerned that the highly
publicized cases

23 The Army is the only service with a regulation requiring that
violations be reported to the service level.

are painting a negative picture of them and their profession, even though
they said they had not violated the regulations on personal commercial
solicitation.

    DOD Does Not Disseminate Information about All Confirmed Violations and
    Enforcement Actions to Other Parts of DOD or to State Life Insurance
    Regulators

The DOD policy office responsible for oversight of supplemental life
insurance solicitation on installations does not routinely disseminate
information on all confirmed violations to installations, to the services,
or to state life insurance regulators. Although the DOD solicitation
directive provides installation commanders with discretionary authority to
report banned agents to their military department, they are not obliged to
do so. Specifically, if installation commanders believe it is warranted,
they can recommend extending or lifting actions taken against life
insurance agents on other installations to their respective military
departments. Additionally, the Office of the Secretary of Defense for
Personnel and Readiness could, when appropriate, extend or lift the
actions for other military departments.24 Notably, the current
solicitation directive does not require the installation commander to
routinely report information on all confirmed violations to state
insurance regulators.25 It merely requires installations to notify
appropriate state licensing authorities if the grounds for withdrawing
solicitation privileges involve the eligibility of the agent or company to
hold a state license or meet other regulatory requirements.26

One indication that installation commanders and DOD policy officials have
had only limited communications about violations was the absence of a DOD
list of cases where agents had been banned from installations for
violating the personal commercial solicitation directive. The DOD policy
office did not generate its list of cases until we requested the
information for this review. This lack of information sharing occurred
even when policy violations were severe enough to warrant the banning of
agents. These communications-related problems continued despite three
recommendations in the 1999 DODIG report: (1) require that all

24 DOD Directive 1344.7, sec. 6.5.2.4.

25 It is important to involve state insurance authorities because in
accordance with the McCarran Ferguson Act, 15 U.S.C. sec. 1011-1015
(1948), the life insurance industry generally is regulated under state
laws. The Military Personnel Financial Services Protection Act, S. 418,
109th Congress, sec. 6 (2005) was introduced in Congress this year and
would, if enacted into law, make it clear that state law shall apply to
insurance activities conducted on military installations.

26 DOD Directive 1344.7, sec. 6.5.2.2.

installations in the local area and the services' higher commands be
notified of "any adverse actions" taken against an insurance agent; (2)
require the services to track such actions and report the information to
the office with oversight responsibility; and (3) increase the interaction
with state life insurance regulators. During our visits to six
installations, solicitation coordinators told us that they did not
routinely interact with their counterparts on other installations, but
several of the insurance agents that we interviewed said they were
approved to solicit on multiple bases in multiple states.

We found a similar lack of communication between the various parts of DOD
and state insurance regulators. In our December 2004 survey of all state
insurance commissioners' offices, only one state reported that DOD had
notified it of disciplinary actions taken against a life insurance agent
during the prior 12 months, even though several of the 26 cases in table 2
occurred during the same period. Our survey also revealed that 100 percent
of the life insurance commissioners' offices responding to our survey said
it would be a good practice if DOD were to notify their offices whenever
it took a disciplinary action against a life insurance agent, and 68
percent said they would like more communications with the military.

Figure 2 shows the states where installation commanders took 26
enforcement actions to ban agents from October 2001 through October 2004;
states where regulators indicated on our survey that the office had an
ongoing investigation involving life insurance sales to servicemembers;
and the number of active duty servicemembers in the states. State
regulators reported in our survey that they had ongoing investigations in
nine states: Alaska, California, Colorado, Georgia, Illinois, Iowa,
Kentucky, New York, and Texas. Regulators' investigations were occurring
in four states (California, Georgia, Kentucky, and Texas) that have at
least 30,000 servicemembers in them. Four states (California, Georgia,
Illinois, and Texas) had both an ongoing investigation by the state
insurance regulators in December 2004 and an installation where an agent
had been banned between October 2001 and October 2004.

Since the DODIG made recommendations to improve information sharing 6
years earlier that were not implemented, the absence of oversight by the
DOD policy office appears to be the primary reason for the past lack of
DOD-wide information sharing on banned agents and the continued lack of
information sharing on lesser confirmed violations. Ambiguity in the
solicitation directive about who should disseminate violations-related
information to state regulators and the types of information that should
be disseminated may have contributed to a lack of information sharing.
Another reason for the lack of contact relates to uncertainty regarding
the states' ability to govern what occurs on an installation. Several
state regulatory officials stated that they were uncertain about whether
they had jurisdiction over life insurance sales on military installations.
DOD officials informed us that they began meeting with the National
Association of Insurance Commissioners in May 2005 to address some of
these issues, and legislation27 has been introduced in Congress to require
greater communication between DOD and the association. Additionally,
several installation officials stated that their office considered the
involvement of state regulators only for serious complaints or problems
that involved life insurance products.

The failure to disseminate information to other parts of DOD or to state
insurance regulators about agents and companies who violate the
solicitation policy-especially when the violations were serious enough to
ban agents-can enable violators to continue operating on other
installations. State insurance regulators in North Carolina told us that
by not reporting violations to state regulators, installations prevent the
state regulators from determining whether further actions, such as
revocation of licenses, are warranted. Maintaining a list only of banned
agents does not allow DOD or state regulators to spot patterns of
violations by agents or companies that may have committed multiple lesser
violations on multiple installations. If present, such patterns would be
detectable only when solicitation coordinators are able (1) to identify
the other installations where the agents or companies are approved to
operate and (2) to communicate with their peers on the other installations
about violations committed there by the agents or companies. Limited
communications between installations also hinders the promotion of best
practices. For example, other installations might be interested in Camp
Pendleton's testing of agents before approving them for on-installation
solicitation. When determining whether to ban some agents from Camp
Pendleton,

27 Military Personnel Financial Services Protection Act, S. 418, 109th
Congress, sec. 6 (2005).

investigators were able to show that the agents correctly answered test
questions about prohibited practices- yet still committed the prohibited
practices.

  Data on Payroll Allotments for Supplemental Life Insurance Unreliable and
  Procedures for Submitting Such Allotments Are Not Always Being Followed

We could not determine the extent to which servicemembers follow DOD's and
the services' allotment processing policies when purchasing supplemental
life insurance because of limitations in the allotment databases and the
different ways that finance offices were accepting forms to start the
allotments. Even with DFAS assistance, we could not generate reliable
monthly estimates of the number of servicemembers with, or the amount of
money allotted for, supplemental life insurance. The unreliability of
estimates stemmed from longstanding database and computer system
constraints, such as the coding used when gathering and entering the life
insurance allotments into the databases and computer problems that we have
documented in prior reports. Another problem area with supplemental life
insurance allotments is the lack of certification that occurred when
allotment forms were submitted to and processed by some finance offices.
Contrary to financial management regulations, some finance personnel were
accepting allotment forms through the mail or from individuals without
verifying that the submitter was either the servicemember or that person's
representative with a special power of attorney. We could not substantiate
insurance officials' and agents' assertion that servicemembers were being
prevented from using allotments to purchase life insurance. Several
factors suggest that all servicemembers who want to obtain supplemental
life insurance can do so.

    Databases of Allotment Information Cannot Be Utilized to Monitor
    Servicemembers' Use of or Perceived Need for Supplemental Life Insurance

We, with assistance from DFAS, attempted but could not determine with
sufficient reliability either the number of servicemembers who have
allotments for supplemental life insurance products or the number of
dollars that servicemembers pay as allotments to life insurance companies
each month. Although DOD's Financial Management Regulation28 supplies the
primary guidance governing the procedures used to gather allotment
information and then electronically enter and store the information, each
service has a policy and procedures directing how to implement the DOD
regulations. Among other things, the military services' policies and
procedures specify how allotments for supplemental life insurance and
other products or services are to be coded, the number of discretionary
allotments that each servicemember is allowed, and which forms can be used
to initiate allotments. Allotments to purchase life insurance are also
governed by the DOD directive on personal commercial solicitation. The
directive requires a 7-day cooling-off period between the time when E1s
through E3s sign a supplemental life insurance application and the time
the allotment is certified.29

A variety of DFAS database-related constraints limit the visibility that
the DOD solicitation policy office, the services, and installations have
over servicemembers' use of and perceived need for supplemental life
insurance. These constraints include the following:

o
Although the databases can be used to identify servicemembers with an
insurance allotment (an AI code), the allotment could be for
servicemembers' or family members' life, health, automobile, or other
insurance. Conversely, other servicemembers' insurance allotments are not
detectable if they are coded for savings (an AS code) or other types of
accounts that the servicemembers also have with the company providing
supplemental life insurance.

o
Servicemembers are limited to six allotments in total and one
discretionary allotment per company, even if they have multiple

28 DOD, Financial Management Regulation 7000.14-R Vol. 7A, Chapters 41 and
42; DFAS-INM (Army), Part 6, Chapter 1; DFAS-DE (Air Force) Manual 7073-1,
Chapter 57; DJMS Procedures Training Guide (Navy), Part 6; DFAS-KC
7220.31-R (Marine Corps), Chapters 23	25 and appendixes N, O, P, and Q.

29 DOD Directive 1344.7, encl. E3.3.2.

accounts (supplemental life insurance, savings, and so forth) with a
company.

o
DOD and service regulations permit the use of at least seven different
allotment forms, but forms such as the government-wide Standard Form 1199A
or DOD-wide DD Form 2558 do not ask whether the allotment is for
supplemental life insurance. (See app. III for a copy of each form.)

o
The payroll databases cannot tell how many servicemembers pay insurance
companies directly by checks, electronic withdrawals from personal
accounts, and so forth.

o
DFAS maintains separate databases for the different military services, and
the code used to identify an insurance company is not the same for all
services. Creating a DOD-wide list requires additional work to merge the
resulting information.

DOD was informed about some of these database constraints in the 1999
DODIG report, in which analysts noted that they could not determine what
portion of the allotments were made specifically for life insurance.

A major cause of these database-related problems is DOD's systems
supporting servicemembers' pay. In our earlier reports, we documented
serious problems with these systems, noting that they were prone to error
and required manual data reconciliation, correction, and entry across
nonintegrated systems.30 While a significant system enhancement project is
under way to improve the administration of military pay, DOD is likely to
continue operating with existing system constraints for several years. The
continued use of forms that do not require information and coding specific
to life insurance could cause allotment data to continue to be unreliable
for oversight purposes, even when the new computer system becomes
operational. Information obtained during interviews indicated another
cause for data unreliability. Some interviewees suggested that
servicemembers might use codes other than AI to avoid the additional
requirements encountered when starting allotments for supplemental life
insurance. The additional requirements include the cooling-off period and

30 See GAO, DOD Systems Modernization: Management of Integrated Military
Human Capital Program Needs Additional Improvement, GAO-05-189
(Washington, D.C.: Feb. 11, 2005), and GAO, Military Pay: Army National
Guard Personnel Mobilized to Active Duty Experienced Significant Pay
Problems, GAO-04-89 (Washington, D.C.: Nov. 13, 2003).

the requirement to submit a paper form for all supplemental life insurance
allotments, rather than using the electronic MyPay system.

The absence of data regarding which servicemembers do or do not carry
supplemental life insurance limits the oversight that DOD policy officials
and installation solicitation coordinators can exert. For example, the
inability to obtain accurate data prevents the DOD policy office from
monitoring increased or decreased perceived needs for supplemental life
insurance, an important issue now that new legislation has been enacted to
almost double the lump sum death benefits offered through the government.
Also, the lack of accurate data prevents the solicitation coordinators
from easily checking whether servicemembers on an installation submitted
an unusually large number of new allotments for supplemental life
insurance during a short period, a possible sign of mass solicitation to
recruits or trainees or other prohibited practices.

    Allotments for Supplemental Life Insurance Have Been Started without
    Verifying Required Authorization and the Elapse of the Cooling-Off Period

Contrary to regulations, some finance personnel have accepted allotment
forms to start supplemental life insurance without verifying that the
person submitting the form is authorized to do so or, if applicable, that
a cooling-off period has occurred. According to DOD's Financial Management
Regulation, establishment of, discontinuance of, or changes to existing
allotments for supplemental life insurance are to be based on a written
request by a servicemember or someone with a special power of attorney on
behalf of the servicemember.31 For junior enlisted servicemembers, the DOD
directive on personal commercial solicitation provides an additional
requirement: "For personnel in pay grades E-1, E-2, and E-3, at least
seven days shall elapse for counseling between the signing of a life
insurance application and the certification of an allotment. The
purchaser's commanding officer may grant a waiver of this requirement for
good cause, such as the purchaser's imminent permanent change of station."

31 DOD, Financial Management Regulation 7000.14-R, Vol. 7A, Chapter 41,
sec. 410801. This regulation allows most financial allotments to be
established though MyPay, DOD's automated payroll program. MyPay allows
servicemembers to start, stop, or change allotments with financial
institutions when the funds are directed to be sent to a savings or
checking account. MyPay is not intended to be used for allotments to
purchase supplemental life insurance. Use of MyPay to establish a
supplemental insurance allotment makes it impossible for installation
officials to monitor or enforce the proper use of insurance allotments and
other parts of the on-installation personal commercial solicitation
requirements.

Nonetheless, DOD personnel and insurance agents indicated that some
offices accepted allotment forms personally submitted by insurance agents
or through the mail with only the signature on the form serving as proof
that the servicemember wanted to start an allotment for supplemental life
insurance. For example:

o
A life insurance agent is alleged to have submitted allotment forms at
Fort Bragg for servicemembers who later said they had not wanted the
policies for which they were paying.

o
Finance office personnel at Naval Station Great Lakes said that about half
of all insurance allotment forms submitted to and processed by their
office came from insurance agents.

o
DFAS representatives who process allotments for Marines stated that they
accepted and processed allotment forms submitted directly from Marines
through the mail without the required certification.

o
Finance office personnel at Lackland Air Force Base were concerned about
the high number of mailed allotment forms from insurance companies or
otherwise on behalf of servicemembers and requested DFAS guidance on
processing such forms.

Several reasons were suggested for DOD personnel's acceptance of allotment
forms that were not submitted personally by the servicemembers or their
representatives with a special power of attorney. DFAS personnel
representing the Marines said that they accepted and processed mailed
insurance allotment forms from Marines who, due to their transitional
status, were unable to properly certify the forms, but wished to promptly
initiate policies or to keep policies from lapsing. In addition, Air Force
personnel said that servicemembers have tight training schedules that make
it more convenient to mail the forms than to hand carry them to the
finance office. The Air Force has recently clarified its policies to
require contacting servicemembers and verifying the request when allotment
forms are received by mail.

The causes are different for noncompliance with the requirement to have 7
days elapse between the time junior enlisted servicemembers sign a life
insurance application and the time an allotment is certified. On allotment
forms such as the governmentwide Standard Form 1199A or the DOD-wide DD
Form 2558, no one is asked to certify that the required cooling-off period
and, possibly, counseling have occurred. Therefore, these forms do

not require finance personnel to determine whether the full 7 days have
elapsed before they certify the allotment. Other causes for noncompliance
with the required cooling-off period are ambiguities in the directive.
First, the requirement for a cooling-off period may be for all life
insurance allotments started by junior enlisted servicemembers, but its
inclusion in a directive governing only on-installation solicitation could
cause finance officials to interpret the requirement as applying only to
those allotments for supplemental life insurance sold on an installation
to junior enlisted servicemembers. Second, it is unclear whether the
counseling is required or optional during the cooling-off period. Further,
the directive and the standard allotment forms do not contain procedures
for documenting whether the counseling took place. Third, it is unclear
when the commanding officer must sign a waiver for the cooling-off period
and/or counseling.

Starting a supplemental life insurance allotment for servicemembers who do
not want one or were not required to allow the cooling-off period to
elapse can result in extra expenses for servicemembers who may already be
financially challenged. Even if servicemembers receive premium
reimbursements like those promised by insurance companies following the
incidents at Fort Benning, Fort Bragg, Camp Pendleton, and possibly other
places, months can pass between the paying for the allotments and the
reimbursements. During that time, servicemembers are without a portion of
their income, and this decreased income could result in budgeting
difficulties and fees for such things as bounced checks and late payments.
As we pointed out in our April 2005 report on the financial conditions of
servicemembers and their families,32 pressure from creditors, falling
behind in paying bills, and bouncing two or more checks were negative
financial events reported by approximately one-eighth to one-fifth of
servicemembers on a 2003 DOD-wide survey.33 In addition, more than 10
percent of servicemembers answered "in over your head" or "tough to make
ends meet but keep your head above water" when the survey asked them to
characterize their financial condition. For servicemembers who

32 See GAO-05-348.

33 Sampling errors of estimates for servicemembers do not exceed +/- 5
percentage points. These sampling errors do not include errors due to
other sources, such as potential bias attributable to the overall 35
percent response rate. DOD conducted research to assess the impact of this
response rate on overall estimates. We have no reason to believe that
potential non-response bias in the estimates not otherwise accounted for
by DOD's research is substantial for the variables we studied in our
earlier 2005 report.

were already having financial difficulties, unplanned allotments and any
extra expenses could result in debt and bad credit histories for
servicemembers, as well as adversely affect unit readiness and morale as
the chain of command attempts to address any resulting financial problems.

    Assertion That Servicemembers Are Prevented from Purchasing Supplemental
    Life Insurance Could Not Be Substantiated

Some insurance officials and agents asserted that chains of command
prevent servicemembers from purchasing supplemental life insurance, but we
were unable to substantiate the assertion. As we have previously
mentioned, DOD's Financial Management Regulation requires that
servicemembers or their representative with a special power of attorney
complete and submit an allotment form if the supplemental life insurance
is to be purchased with a payroll deduction. Also, the previously
discussed requirement for a cooling-off period and possibly counseling for
junior enlisted personnel is important to examining the life insurance
officials' and agents' assertion.

During a meeting at the start of our review, officials from insurance
companies and national insurance associations asserted that some
servicemembers were being prevented from purchasing supplemental life
insurance. Also, a firm that sells supplemental life insurance on and off
multiple installations supplied us with documents34 on 1,344
servicemembers who completed insurance applications from October 2002
through September 2004 but did not subsequently start a policy through the
firm. During site visits to two of the installations where the majority of
the 1,344 servicemembers were based at the time of completing their
applications, we attempted to conduct focus groups with subgroups of those
servicemembers. Our points of contact on the installations indicated that
many of the servicemembers had rotated to other installations or were in
training that could not be missed.

34 Approximately 65 percent of the files included an allotment form with a
servicemember's signature.

Although we could not determine how representative these 1,344
applications were of all applications completed without a purchase being
made, this case study of the experiences at one firm provides some insight
into the viability of cost-related alternative reasons why servicemembers
might not follow through with the purchase of supplemental life insurance
coverage. Our analysis of the 1,344 cases showed that 831 applications
were for E1 through E3 servicemembers, and the per person average monthly
cost of the products in the applications was $92.35 For those 831 junior
enlisted personnel, 3 percent of the cases contained only an application
for life insurance, 52 percent contained only an application for what an
official from the firm characterized as "a life insurance product with an
accumulation fund,"36 and 45 percent included both types of applications.

Military officials, servicemembers, and insurance officials and agents
identified reasons-in addition to being actively prevented from processing
a supplemental life insurance allotment form-why servicemembers might not
start a policy after completing an application. These other reasons
included:

o
The counseling supplied during the 7-day cooling-off period could have
been misinterpreted as an implicit order from the chain of command not to
purchase the insurance, rather than as advice about the advantages and
disadvantages of purchasing supplemental life insurance or a particular
type of coverage.

o
The counseling could have resulted in the servicemember's following
through on purchasing a supplemental policy but obtaining it from another
vendor, and possibly at a lower price.

o
Some servicemembers may have developed buyers' remorse when they later
considered the competing demands on their compensation.

35 At the time that applications were completed, coverage through the
government-offered SGLI was $16.25 per month for $250,000 of coverage.
During our review, insurance officials stated that they too offered
similar term-life policies for approximately the same amount.

36 GAO has another review under way that is examining, among other things,
the quality of the financial products-including supplemental life
insurance-offered to servicemembers.

o
Servicemembers may have completed the application because of high pressure
sales practices, knowing they would not later file an allotment form.

o
An allotment may not get started because of a lost or missing allotment
form.

Although we were not able to determine whether chains of command were
intentionally preventing servicemembers from purchasing supplemental life
insurance, information of four types suggests that the inability to
purchase supplemental life insurance coverage is probably not a widespread
problem. First, 85 percent of the state insurance regulators in our survey
indicated that no insurance company had filed a complaint regarding the
sale of life insurance to servicemembers on installations from October
2003 through December 2004, and the other 15 percent said they did not
know. Second, most of the insurance agents identified by the national
insurance associations and interviewed during our six installation visits
indicated that they had not experienced a problem with the allotment
process. In contrast, agents for two life insurance companies typically
reported a problem, and the concerns related primarily to the processing
of allotments on two installations that were served by the firm that
supplied us with the more than 1,000 cases. Third, when we were able to
talk with servicemembers identified as having completed insurance
applications without starting allotments, they indicated that they did not
purchase the supplemental life insurance for reasons other than prevention
by the chain of command.37 Finally, if servicemembers wanted life
insurance and were actively prevented by the chain of command from filing
allotment forms to make the purchase, they could pay the premiums by
check, electronic withdrawals from other financial accounts, or some other
means, without further chain of command intervention.

37 It is impossible to determine whether the installation directed us only
to servicemembers who chose not to purchase the policies for reasons other
than active prevention. We did, however, receive written statements from
two junior enlisted servicemembers and we contacted one on his personal
cell phone. He confirmed that he did not want the policy after completing
the application. In addition, to lessen the likelihood that other
servicemembers would not answer truthfully when speaking in a focus group,
we administered an anonymous survey before the focus group sessions to
promote honest responses about each individual's experiences in the
solicitation and allotment processes.

  DOD's Revised Directive Adds New Requirements, but Does Not Fully Address
  Oversight Deficiencies

DOD's revised directive on personal commercial solicitation practices on
DOD installations incorporates new requirements, but does not address all
oversight problems.38 Numerous changes have been proposed. Some interim
policy and practices that are currently in place have been incorporated
into the draft revision. Also, requirements for gathering and
disseminating information have been proposed, but they do not fully
address oversight deficiencies. Still other proposed requirements address
issues such as the type of information that life insurance agents will
provide to servicemembers to describe the product being offered by the
agent.

    Draft Directive Proposes to Incorporate Existing Interim Policy and
    Formalized Practices Already in Place

One of the larger sets of additions to the draft directive proposes to
incorporate interim policy that DOD issued in 2002 about on-installation
financial education presentations.39 Those additions generally prohibit
representatives of commercial loan, finance, insurance, or investment
companies from providing such presentations. With certain restrictions,
the presentations may, however, be provided by representatives of the
following types of organizations: credit unions and banks located on
military installations,40 nongovernmental, noncommercial organizations
expert in the field of personal financial affairs, and those that are
either tax	exempt (under 26 U.S.C. 501(c)(3) or (c)(23)) or under a
contract with the government. Among other things, restrictions require
that the presenter and educational materials use disclaimers to indicate
clearly that they do not endorse or favor any commercial supplier,
product, or service. Also, the installation commander shall consider the
company's history of complying with on-installation commercial sales
instructions if the presenting organization is affiliated with a company
that sells or markets insurance or other financial products.

38 70 Fed. Reg. 20316 (2005).

39 70 Fed. Reg. 20316 (2005), part 50.11 (g).

40 The draft directive also requires banks and credit unions operating on
DOD installations to provide financial counseling services as an integral
part of their financial service offerings. Banks and credit unions
operating on DOD installations are subject to additional requirements
specified in other DOD policies (for example, DOD Directive, 1000.11,
Financial Institutions on DOD Installations (June 9, 2000); DOD, Financial
Management Regulation 7000.14-R, Vol. 5, Chapter 34 (September 2000).

An additional change to the draft solicitation directive incorporates
procedures pertaining to advertising and commercial sponsorship that were
already in place at some of the installations we visited.41 For example,
the draft directive notes that solicitors are allowed to provide
commercial sponsorship of DOD morale, welfare, and recreation programs or
events on installations but are not to contact participants without their
written permission. Interviews with insurance agents and installation
personnel during our site visits indicated that agents were already
generating lists of future contacts through the use of forms that program
or event participants completed, indicating their permission for the
future contact.

    Proposed Evaluation, Reporting, and Dissemination Requirements Do Not Fully
    Address Oversight Deficiencies

DOD has taken some positive steps to improve its oversight of personal
commercial solicitation on installations by proposing to add four new sets
of requirements that pertain to gathering and disseminating evaluative
data. Each of the requirements has associated problems that could limit
the usefulness of the gathered and disseminated data.

Two sets of proposed changes add requirements for gathering and
disseminating information about violations on banned agents. As we noted
earlier, continued gathering and disseminating information on only those
violations severe enough to result in banning an agent will result in
DOD's continuing to be unable to (1) identify the number, types, and
severity of all violations and (2) recognize patterns of violations.
Failure to disseminate information on all confirmed violations to all
parts of DOD and to state regulators can allow violators to continue
operating on installations.

41 70 Fed. Reg. 20316 (2005), part 50.11 (f).

As the result of another proposed addition to the draft directive,
installation commanders will be required to inquire into any alleged
violations of the solicitation regulation or questionable solicitation
practices.42 This step could increase the DOD's oversight of the number,
types, and severity of confirmed violations occurring throughout all
military installations if there were also an additional requirement to
report all confirmed violations to higher-level commands. Some factors
that could keep the number of inquiries into potential violations
artificially low are the lack of knowledge about which solicitation
practices are prohibited, the steps required to report a violation, and
whom to contact when a suspected violation occurs. We reported in April
2005 that only the Army is monitoring the completion of required personal
financial management training for junior enlisted personnel, and it
estimated that about 18 percent of that group had not received the
required training. Our earlier review did not assess the amount or the
types of life insurance-related training provided, but we noted that each
service administered its personal financial training differently.43 When
we recommended additional DOD oversight by requiring the services to
develop and implement plans to monitor the training, the Under Secretary
of Defense for Personnel and Readiness partially concurred with our
recommendation but noted that the DOD instruction governing personal
financial management training had sufficient procedures to let the
military departments accomplish their responsibilities.

Another proposed addition to the draft directive would require an
insurance agent to provide a servicemember with a new DOD-wide
questionnaire that would contain questions about the servicemember's
experiences during the prearranged appointment with the agent for
solicitation.44 The value of information obtained from this assessment
instrument may be very limited, and might even create an erroneous
impression of what has occurred during the typical solicitation
appointments. The questionnaire will document interactions that were not
described as problem areas during our visits to six installations-that is,
life insurance agents who were complying with the requirement to
prearrange one-on-one solicitation meetings. Also, the voluntary
completion of the forms will result in a lack of transparency, since some

42 70 Fed. Reg. 20316 (2005), part 50.11 (c) (3).43 See GAO-05-348.44 70
Fed. Reg. 20316 (2005), part 50.11 (a) (iii).

forms may not be turned in for a variety of reasons: For example, they
were never distributed by an agent, or the servicemembers did not want to
take the time to fill in and drop off the form. In addition, the directive
includes no requirement to submit the data to higher levels so that
service-wide and DOD-wide information can be developed.

    OtherChanges Will Result in Better Explanation or Clarification of Existing
    Requirements

Another change merits special mention because it could result in
servicemembers' having better information for making decisions about
whether or not to purchase a specific amount or type of supplemental life
insurance coverage.45 All financial products that contain insurance
features must clearly explain the insurance features of those products.
The draft regulation elaborates further about insurance products, stating
that if there is a savings component to an insurance product, the agent
shall 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 must also show the total
amount per year allocated to insurance premiums. The customer must be
provided a copy of this document that is signed by the insurance agent.
One problem that might be encountered in implementing this proposed
requirement is the absence of any guidance about what types of information
must be contained in the written description and who (for example, the
installation's solicitation coordinator or the National Association of
Insurance Commissioners) would judge whether the information is conveyed
clearly.

Three other changes in the draft also merit mention. First, solicitors are
prohibited from contacting DOD personnel by calling a government telephone
or by sending an e-mail to a government computer unless the parties have a
pre-existing relationship. Second, solicitors with military identification
cards and/or vehicle decals must present documentation issued by the
installation authorizing solicitation when entering the installation for
that purpose. Third, commercial sponsors may not use sponsorship to
advertise products and/or services not specifically agreed to in the
sponsorship agreement.

45 70 Fed. Reg. 20316 (2005), part 50.11 app. A.

A DOD official informed us that DOD plans to review the findings and
recommendations of our report and then request more public comments after
our report is issued. He also indicated DOD will not publish a final
revised directive until at least 90 days after the issuance of our report,
consistent with the provisions of Section 8133 of the Department of
Defense Appropriations Act for Fiscal Year 2005.46

Conclusions
DOD cannot identify the extent to which life insurance agents are
violating solicitation policies or procedures, the types, severity, or
patterns of violations. A proposed new provision in the draft directive
would require DOD to maintain and disseminate a master file on banned
agents, but this new provision will still not provide DOD with a full
picture of the important but missing data outlined in the prior sentence.
For example, DOD's current list (1) is not searchable to help solicitation
coordinators quickly check on agents who want to be approved or
re-approved for on	installation solicitation, (2) does not provide the
same information on every case as is evidenced by the absence of dates for
6 of the 51 cases, (3) does not identify the specific types of violations
that occurred-data critical for identifying patterns of violations, and
(4) probably does not contain information on all agents who installation
commanders have determined violated regulations but have not done
something severe enough to be banned. The continued absence of these
important data will force DOD, the services, and installations to take
actions based on isolated incidents, anecdotes, and other possibly
insightful, but non-optimum information. DOD has, however, taken a
positive step by including a requirement in the draft directive to
maintain a list of contacts for state insurance regulators, but it does
not require installation commanders to keep state regulators generally
informed about all confirmed solicitation violations occurring on their
installation. This ambiguity could result in some relevant violations not
getting reported to state regulators. Similarly, ambiguity is present in
the wording of the requirement for the cooling-off period for junior
enlisted servicemembers who want to purchase supplemental life insurance.
While DOD's draft directive clarified that the period is 7 calendar days,
other ambiguities were identified earlier in this report. Failure to
address these issues during the current revision could result in
inconsistent enforcement of that requirement.

46 Pub. L. No. 108-287, sec. 8133 (Aug. 5, 2004).

The quality of the information in the DFAS payroll databases limits the
ability of other parts of DOD in their efforts to (1) monitor
servicemembers' perceived need for supplemental life insurance and (2)
detect prohibited group presentations as evidenced by large numbers of new
allotments for supplemental life insurance. Continued reliance on multiple
generic allotment forms and a generic data entry code that does not
distinguish different types of insurance products (for example, life
versus automobile) will perpetuate existing data reliability problems.
Furthermore, the continued use of generic forms to start a supplemental
life insurance allotment results in a missed opportunity for DOD to
institute steps to address solicitation requirements whose enforcement has
not been assessable. For example, DOD has no current forms or other
assessment methods for documenting that the required cooling-off period
for junior enlisted personnel occurred, servicemembers received required
documents from life insurance agents, and the finance or administrative
staff who accepted the allotment form for supplemental life insurance also
verified that the person submitting it was either the purchaser or the
servicemember's representative with a special power of attorney. With
regard to this last enforcement and documentation issue, our review found
some noncompliance with the requirement that only servicemembers or their
representatives with special power of attorney could start supplemental
life insurance allotments. Even though some of the reasons for the
noncompliance may be well-meaning, some of the instances where finance
officials have accepted such allotment forms from unauthorized persons
have resulted in banning agents, diverting valuable resources away from
the military mission to conduct investigations, and possibly placing
servicemembers and their families at financial risk when unanticipated
allotments begin for unwanted products. Adherence to existing regulations
would go far to eliminating these negative effects.

  Recommendations for Executive Action

We are making five recommendations. We recommend that the Secretary of
Defense direct the Under Secretary of Defense for Personnel and Readiness
to take the following actions in revising DOD's solicitation regulation:

o
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.

o
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.

o
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.

We recommend that the Secretary of Defense direct the Defense Finance and
Accounting Service to take the following actions:

o
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.

o
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.

  Agency Comments and Our Evaluation

DOD's comments are included in this report as appendix IV. DOD partially
concurred with our first two recommendations and fully concurred with the
three remaining recommendations.

In commenting for DOD, the Principal Deputy for Personnel and Readiness
raised three issues concerning the thoroughness and accuracy of our
review.

First, DOD incorrectly stated that our review was only to look at the
complaints of the insurance industry and that after we did not
substantiate these complaints, we instead looked at DOD's oversight of
commercial insurance solicitation on DOD installations. While we were
aware of the industry's complaints, we focused our review on broader
systemic issues, like the implementation of DOD and service poliies,
procedures, and regulations governing the marketing and sale of
supplemental life insurance on domestic military installations. Focusing
on these systemic issues, however, allowed us to determine whether the
complaints had merit. At every stage during our review, we emphasized that
we were asked to review compliance with DOD's regulations and policies on
both the marketing and sale of life insurance on installations and the
processing of financial allotments for such products. For example, in the
letter notifying the Secretary of Defense that we were beginning our
review and at our first meeting with DOD and service representatives, we
listed the following three researchable questions:

1.
What are DOD's and the services' policies and procedures for the marketing
and sale of life insurance policies to military personnel and the
processing of financial allotments for military personnel?

2.
How do DOD and service regulations affect the marketing and sale of life
insurance policies and the processing of financial allotments to military
personnel?

3.
How are the processes and procedures for the marketing and sale of life
insurance policies and the handling of financial allotments, especially
for commercial products like life insurance policies, implemented at Fort
Bragg, Fort Lewis, and other military installations?

Our report fully addressed solicitation and allotment issues in addition
to providing our congressional requesters with an update on the revision
of DOD's personal commercial solicitation directive, as they also
requested. Further, DOD stated that our report makes only minor mention of
the fact that we did not substantiate the insurance industry's assertions
that servicemembers were being prevented from using allotments to obtain
life insurance. To the contrary, we devoted a section of our report to the
issue, but that issue was only one of many allotment-related concerns that
we addressed in that portion of the report.

Second, DOD expressed concern about our use of survey data in examining
the extent to which insurance solicitation violations were occurring on
installations. The most significant reason for using the survey was the
incompleteness and other problems associated with the data that DOD
maintains on violations. The problems with those data are addressed more
fully in our later response to DOD's partial concurrence with our first
recommendation. Because we were aware that survey data are
unsubstantiated, we supplemented that information with data gathered from
other sources such as DOD's list of banned agents and information gathered
from a wide variety of individuals during our six visits to military
installations. DOD similarly conduits surveys to monitor other personnel
issues. For example, the Office of the Under Secretary of Defense for
Personnel and Readiness conducted a survey of over 75,000 servicemembers
asking for unsubstantiated perceptions about racial/ethnic discrimination
and harassment47 and these data could be combined with compliance-related
information from DOD's investigations of alleged violations to give the
department a more complete view of the issue. DOD also stated that we
should have disclosed the wording used in the survey. The information that
DOD reviewed in our figure 1 is the exact wording of our survey items.
Although the wording for the overall question, "During the past 12 months,
how often have the following practices concerning supplemental life
insurance taken place on the installation?" was changed to a declarative
sentence to increase readability, our paraphrasing is a true
representation of what we asked. Finally, the response rate of 75 percent
for our survey of all personal financial management program managers on
U.S. installations is higher than the rate obtained on recent DOD-wide
surveys such as the August 2004 survey which had a response rate of 40
percent. Given these facts, we believe that our discussion about the

47 See Defense Manpower Data Center, Armed Forces Equal Opportunity
Survey, DMDC Report No. 97-027 (Arlington, Va.: August 1999) p. 40.

extent of solicitation policy violations was appropriate, especially since
DOD had information on only the subset of violations serious enough to
merit banning an agent from an installation.

Lastly, DOD maintained that we made a false statement about the department
not knowing the extent of personal solicitation policy violations. DOD's
point is incorrect on several grounds. First, early in our review in May
2004, we asked DOD officials whether a DOD-wide database existed that the
services could use to report to DOD insurance agents or companies that
have had their solicitation privileges withdrawn. DOD officials told us
that while there was such a system, it was up to the services to provide
updated information. DOD officials said at the time there was no
comprehensive information available to document such actions. In October
2004-approximately 5 months after we asked for a list of all banned
agents-DOD provided us with information similar to that provided on its
Commanders Page Web site as of April 2005. At the time we received this
information, the Director of the program that oversees personal commercial
solicitation told us that the list may not be complete and accurate-which
we found to be true-but that it provided all of the information that the
services had reported. Second, DOD's list of banned agents did not include
all cases where insurance agents or companies were banned. As we reported,
personnel at Fort Bliss, Texas, indicated that the installation commander
had banned an agent who was not included on DOD's Commanders Page Web site
as of April 2005. Third, unless DOD bans every agent who violates in any
way the solicitation policy regardless of the severity of the violation,
its data on banned agents are not equivalent to knowing the extent of all
confirmed violations.

Regarding DOD's comments about our recommendations, DOD partially
concurred with our first recommendation to develop and implement a
searchable violations database, but DOD's explanation of its partial
concurrence does not identify any additional steps to address the
deficiencies that we identified with their current procedures. As we noted
in our report, the monitoring system should focus on all confirmed
violations of solicitation policies and not just on those severe enough to
result in agents being banned. By establishing a database on all confirmed
violations, DOD would have a more complete picture of solicitation
violation activities to better identify patterns, types, and severity of
confirmed violations. If patterns are found, they could serve as the basis
for identifying actions to eliminate the recurring or systemic problems.
Our proposed database would also provide installation solicitation
officers with a resource to check whether agents requesting solicitation
approval or

re-approval at their installations were involved in prior violations at
other locations.

DOD partially concurred with our second recommendation that installation
commanders notify state insurance regulators of confirmed violations of
solicitation policies. DOD's position is that such reporting by
installation commanders should only be required when the violations
involve the eligibility of the agent to hold a state license and to meet
other regulatory requirements. We believe that DOD should report all
confirmed violations to state regulators. Installation commanders and
their legal advisers may not have the expertise needed to determine
whether a solicitation violation involved license-eligibility or
regulatory requirements. Having installation commanders report all
confirmed violations to state regulators would allow the regulators to
decide whether further action is appropriate. As we pointed out in our
report, state insurance officials from North Carolina were concerned that
DOD's lack of reporting violations prevented them from determining whether
further actions, such as revocation of licenses, are warranted.

DOD concurred with our third recommendation and stated that it had
identified an additional ambiguity in the current revised directive
regarding who is responsible for monitoring and enforcing the cooling-off
period for supplemental life insurance purchases. DOD's proposed revision
addresses the concerns that we raised.

DOD concurred with our fourth recommendation and stated that they will
consider our proposed changes for a future enhancement of their pay
system. In addition, DOD said that it will review its regulations and
forms to determine what current and future modifications should be made.

DOD concurred with our fifth recommendation and stated that it will issue
a message identifying who can start, stop, or modify allotments to all
finance offices and Defense Finance and Accounting Service offices that
process allotments.

As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days
after its issue date. At that time, we will provide copies of this report
to interested congressional committees and the Secretary of Defense. We
will also make copies available to others upon request. This report will
be available at no charge on GAO's Web site at http://www.gao.gov.

If you or your staff have any questions regarding this report, please
contact me at (202) 512-5559 or [email protected]. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on the
last page of this report. GAO staff members who made major contributions
to this report are listed in appendix V.

Derek B. Stewart Director, Defense Capabilities and Management

List of Congressional Requesters

The Honorable Tom M. DavisChairmanCommittee on Government ReformHouse of
Representatives

The Honorable Duncan L. HunterChairmanCommittee on Armed ServicesHouse of
Representatives

The Honorable Christopher ShaysChairmanSubcommittee on National Security,
Emerging Threats

and International RelationsCommittee on Government ReformHouse of
Representatives

The Honorable Jim CooperThe Honorable Martin T. MeehanThe Honorable Ellen
O. TauscherHouse of Representatives

Appendix I

Scope and Methodology

In addressing the objectives of our engagement, we reviewed reports that
had been issued by GAO, DOD, and others, including the life insurance
industry. We interviewed officials from DOD, life insurance companies and
associations, and other organizations, such as the Consumer Federation of
America, to identify the many perspectives on the issues being studied. In
connection with another report, we constructed, pre-tested, and
administered insurance-and allotment-related survey questions to all 175
installation-level managers of DOD's personal financial management
programs located in the United States.1 We received completed surveys from
131 installations, yielding an overall response rate of 75 percent, which
ranged from a low of 62 percent for the Air Force to 93 percent for the
Marine Corps. We also constructed, pre-tested, and administered an e-mail
survey to the insurance commissioners for the 50 states, the District of
Columbia, and four territories: American Samoa, Guam, Puerto Rico, and the
Virgin Islands. We received completed surveys from 46 states, the District
of Columbia, and one U.S. Territory, yielding an overall response rate of
87 percent. We did not receive surveys from four states (California,
Delaware, Florida, and Idaho) and three territories (American Samoa, Guam,
and the Virgin Islands). We later contacted the four non-responding states
to verify if they had any investigations on insurance sales practices on
military installations, and only California responded to our inquiries. In
addition, we interviewed personnel from the state insurance commissioner's
office for four of the six states where we conducted site visits to
military installations, as well as personnel for the commissioner's office
in Georgia. We also asked insurance companies and two national insurance
associations to identify agents and company representatives who could be
interviewed about solicitation and allotment practices at the six
installations. During site visits, we requested materials related to the
marketing and sale of supplemental life insurance and the establishment of
allotments for that purpose. Those materials included a list of life
insurance agents approved for on-installation solicitation, handouts
distributed to assist servicemembers in determining their need for
supplemental life insurance, documentation for violations of personal
commercial solicitation and insurance-related policies, and complaints
related to insurance solicitation and allotments. While on the site visit,
we conducted individual interviews or focus groups with the following
types of individuals: installation leaders; the coordinator for the
installation's commercial solicitation program; servicemembers; legal
assistance attorneys from the Judge Advocate General corps; finance
department

1 See GAO-05-348.

Appendix I Scope and Methodology

personnel who managed and processed allotments; family support center
staff responsible for personal financial management training and
counseling activities; staff from morale, welfare, and recreation; and
representatives of on-installation banks and credit unions.

We limited our scope to the sale-marketing, solicitation, and purchase- of
life insurance to active duty servicemembers on installations in the
United States. Emphasis was given to findings pertaining to junior
enlisted servicemembers since DOD and insurance officials have indicated
that this subgroup is more likely to encounter problems with the marketing
and sale of supplemental life insurance and establishment of an allotment
for such a purchase. During the course of our work, we visited six
installations (see table 3). We selected the installations based on inputs
from DOD and insurance officials, and with due consideration for the large
number of Army personnel deployed to Iraq and Afghanistan. We did obtain
additional information on completed and ongoing large-scale investigations
of violations that occurred on other installations: Fort Benning, Georgia,
and Fort Stewart, Georgia, although we did not conduct site visits to
these installations.

Table 3: Installations in the United States where GAO Conducted Site
Visits from July to December 2004

Service Installation

            Army Fort Bragg, North Carolina Fort Campbell, Kentucky

        Fort Lewis, Washington Navy Naval Station Great Lakes, Illinois

Marine Corps Camp Pendleton, California

Air Force Lackland Air Force Base, Texas

Source: GAO.

Appendix I Scope and Methodology

To address the extent to which agents were violating DOD's policies
governing the solicitation of supplemental life insurance to active duty
servicemembers on domestic installations, we reviewed and analyzed DOD,
service, and selected installations' policies and directives governing
personal commercial solicitation, primary among these was the DOD
directive on personal commercial solicitation on DOD installations. We
also reviewed DOD reports on commercial life insurance sales;2 materials
provided by insurance association and company officials, as well as
insurance agents; and state government announcements such as those from
the office of the Georgia state insurance commissioner about
investigations of and enforcement actions against some companies and
agents who sold supplemental life insurance to servicemembers. We
contacted the Federal Trade Commission to ascertain whether its Military
Sentinel system contained any information on complaints or investigations
on supplemental life insurance sales to servicemembers. We obtained a wide
range of perspectives about the sale of supplemental life insurance to
servicemembers during meetings with DOD and service headquarters
officials, officials from companies and two life insurance associations
(the American Council of Life Insurers and the National Association of
Insurance and Financial Advisors), and a representative of the Consumer
Federation of America. In addition to interviewing staff from the
insurance commissioners' offices in four of the six states where we
visited installations and in the state of Georgia, we constructed,
pre-tested, and administered an e-mail survey to the insurance
commissioners for the 50 states, the District of Columbia, and four
territories. We also used responses about supplemental life
insurance-related issues from a survey of all DOD personal financial
management program managers, professional staff employed on most
installations who were responsible for coordinating the financial
management training, counseling, and other assistance provided to
servicemembers. During our site visits, we asked that the command point of
contact provide us with the following types of materials: a list of life
insurance agents approved for on-installation solicitation, handouts
distributed to assist servicemembers in determining the need for
supplemental life insurance, documentation for violations of personal
commercial solicitation and insurance-related policies, and complaints
related to insurance solicitation. While on the installation, we conducted
individual or focus group interviews with the following types of
installation personnel or offices: installation leadership, the
coordinator for

2 Final Report: Insurance Solicitation Practices on Department of Defense
Installations, and DODIG, Report No. 99-106.

Appendix I Scope and Methodology

the installation's commercial solicitation program, legal assistance
attorneys from the Judge Advocate General corps, and family support center
staff responsible for financial training and counseling activities. We
also asked the life insurance associations and company officials for the
names of agents that we could interview while on our site visits. As part
of our site visits, we conducted interviews with on-installation bank and
credit union officials, asking about current and planned efforts to offer
supplemental life insurance through their financial institution.

To address how effectively DOD personnel are adhering to DOD's regulations
that govern how active duty servicemembers establish payroll allotments to
purchase supplemental life insurance, we interviewed officials from DFAS
at their headquarters and field offices associated with each service. We
also reviewed and analyzed guidance documents governing servicemembers'
use of allotments that DFAS, the services, and selected installations
provided to us. We interviewed finance officials at the installations we
visited and observed the data entry process used to electronically
transmit data from the installation to the payroll accounting system
maintained by DFAS. At several installations, we also interviewed
officials at administrative units that serve as intermediaries in the
processing of servicemembers' allotments and asked questions as personnel
demonstrated the procedures used in submitting, processing, and confirming
allotment transactions.

To assess the extent to which the draft revision of DOD's directive will
address ongoing problems with supplemental life insurance policies on DOD
installations, we reviewed the Department of Defense Appropriations Act
for Fiscal Year 20053 to determine the restrictions on when the draft
directive could be issued. We conducted interviews with DOD program
officials to discuss proposed changes, the reasons for the proposed
changes, and other issues related to the draft directive. Also, DOD
provided us with a copy of the draft directive as of January 2005 so that
we could compare and contrast it to the current version of the directive.
We compared that version to the one printed in the April 19, 2005, Federal
Register announcement.4 We subsequently contacted DOD policy officials to
determine whether DOD intended to again request comments after our report
was issued.

3 Pub. L. No. 108-287 (Aug. 5, 2004). 4 70 Fed. Reg. 20316 (2005).

Appendix I Scope and Methodology

We performed our work from May 2004 through May 2005 in accordance with
generally accepted government auditing standards.

Appendix II

Details on Selected Recent In-Depth Investigations

We are providing synopses of the reports that investigators prepared after
they completed gathering data on alleged violations. We did not
independently attempt to verify the allegations or the weight of the
evidence supporting decisions reached by installation commanders. Instead,
we merely summarize the information provided in the investigative reports.

Installation: Camp Pendleton, California

Period when the violations occurred: October through November 2003

Description of the violations: An insurance agent approached an officer
requesting authorization to teach a class on veterans' affairs benefits
and financial planning to squadron Marines. The officer believed the class
would benefit Marines and included the agent on the training schedule.
During the class, the agent spoke little about veterans' benefits,
focusing more on investments. The agent distributed cards to obtain
contact information and later met with Marines while they were on duty or
in their homes to sell them policies. The agent described the policy as an
investment plan, rather than an insurance policy, guaranteed, as stated by
the agent, to provide Marines "$500,000 to $1,000,000 by the time they
reached their sixties." The agent also tried to sell the investment plan
to Marines without appointments. During the meetings, Marines were given
the impression that the agent was a representative of the Department of
Veterans' Affairs and was able to assist them in obtaining their benefits.
On one occasion, the agent tried to obtain a MyPay personal identification
number from a Marine.

Investigators determined that these actions violated prohibited
solicitation practices including providing financial planning and
insurance classes without prior approval; attempting to solicit or sell
insurance without an appointment; attempting to sell insurance in an
unauthorized area; using unfair, deceptive, misleading, or fraudulent
schemes to encourage sales; and soliciting to trainees.

Documentation to assess the scope of the problem: The investigation report
included sworn statements from 12 Marines who met with the agent as well
as two other Marines approached by the agent.

Estimated number of affected servicemembers: The initial class included 15
to 25 Marines, and the agent conducted the class at least one other time.

Appendix II
Details on Selected Recent In-Depth
Investigations

Actions taken:

o
By the installation: Solicitation privileges for the agent were suspended
for two years for all Western area Marine Corps installations.

o
By the insurance company: The insurance company returned the agent's
solicitation pass and ceased all operations on the installation with no
plans of reopening.

Installation's interaction with state insurance commissioner's office: The
installation recently provided copies of the investigation to the state
insurance commissioner.

Appendix II
Details on Selected Recent In-Depth
Investigations

Installation: Camp Pendleton, California

Period when the violations occurred: May through September 2003

Description of the violations: Under the guise of presenting information
on veterans' affairs benefits, two insurance agents obtained permission
from a commanding officer to provide the classes to Marines arriving from
boot camp, at which attendance was required. Four people conducted the
classes, including three insurance agents and the wife of one agent.
According to participants, the classes started with normal veterans'
benefit discussions, but shifted into an investment and life insurance
sales pitch after non-commissioned officers left the room. The product was
identified as a "can't lose proposition" and participants were told that
participation would earn them about $500,000 in just over 21 years. During
the sales pitch, agents distributed paperwork, including applications,
allotment forms, and statements of understanding, to the Marines.
Participants were encouraged not to read the forms and sign them quickly,
leave the amounts on the allotment forms blank, provide the insurance
company representatives access to MyPay personal identification numbers,
and provide signed photocopies of their identification cards. The agents
brought portable printers to the meetings to obtain the necessary
information. The Marines were not allowed to take paperwork with them,
being told that copies would be sent to their home of record.

Investigators determined that these actions violated prohibited
solicitation practices including soliciting military personnel who are in
an on-duty status; soliciting without appointment in areas utilized for
the housing and processing of transient personnel and in unit areas; using
manipulative, deceptive, or fraudulent devices, including misleading
advertising and sales literature; soliciting recruits, trainees, and other
personnel while in a "mass" or "captive" audience; and violating the
requirement that at least seven days elapse between the signing of a life
insurance application and the certification of an allotment for personnel
in pay grades E1 through E3.

Documentation to assess the scope of the problem: The investigation report
included interviews from 26 Marines in the five classes. Additional
information, such as direct deposit forms and statements of understanding,
was also included.

Estimated number of affected servicemembers: 345

Appendix II
Details on Selected Recent In-Depth
Investigations

Actions taken:

o
By the installation: Solicitation privileges for the agents were revoked
for Camp Pendleton and all Western region Navy and Marine Corps
installations.

o
By the insurance company: The insurance company shut down its operations
at Camp Pendleton and has no plans to reopen. The company terminated the
three agents involved, at least one of whom was a retired Marine. Refunds
were provided to 110 Marines before the June 8, 2004 cutoff date.

Installation's interaction with state insurance commissioner's office: The
investigation report recommended the California Department of Insurance be
notified of the report results. The installation recently provided copies
of the report to the state insurance commissioner.

Appendix II
Details on Selected Recent In-Depth
Investigations

Installation: Fort Benning, Georgia

Period when the violations occurred: December 2003 through July 2004

Description of the violations: Four agents, two who were on Fort Benning's
list of authorized insurance and investment agents, gained access to
soldiers in the Basic Combat Training Brigade through unit
non	commissioned officers under the pretext of providing financial
planning or financial management classes. The agents conducted their
briefings in unit classrooms, discussing the value of investing and
providing examples of wealth accumulation. At the end of these
presentations, soldiers wanting additional information were asked to
complete an informational form. Following up on leads generated from the
forms, the agents returned to the unit area a few weeks later and met
individually or in a small group with soldiers. These follow-on meetings,
involving the use of laptop computers and direct deposit forms, took place
in unit classrooms or unit dayrooms. Fort Benning officials found that
officers and non-commissioned officers contributed to the solicitations
and a number of drill sergeants knew of the insurance presentations in the
unit area.

Investigators determined that these actions violated prohibited
solicitation practices including soliciting during enlistment or induction
processing or during basic combat training; soliciting to mass, group, or
captive audiences; and misusing the allotment of pay system.

Documentation used to assess the scope of the problem: The investigation
report included sworn statements from a number of soldiers who met with
the agents. Additional information, such as direct deposit forms, was also
obtained.

Estimated number of affected servicemembers: 377

Actions taken:

o
By the installation: Installation solicitation privileges for the agents
were revoked. Three officers and seven enlisted personnel involved were
reprimanded for failing to adequately safeguard the soldiers for whom they
had responsibility.

o
By the insurance company: The agents involved were fired from the
insurance companies they represented. The insurance company from

Appendix II
Details on Selected Recent In-Depth
Investigations

which most of the policies appear to have been sold has agreed to provide
refunds to soldiers.

Installation's interaction with state insurance commissioner's office: The
investigation report recommended that findings be shared with the state
licensing agencies. Installation officials have provided information to
the state of Georgia regarding these incidents.

Appendix II
Details on Selected Recent In-Depth
Investigations

Installation: Fort Benning, Georgia

Period when the violations occurred: July 2002 through October 2002

Description of the violations: Two agents conducted financial management
briefings to soldiers in the infantry training brigade. The agents gained
access to soldiers through unit non-commissioned officers under the
pretext of providing financial management classes. The classes were
imbedded into the training schedule with other personal and financial
affairs presentations and were conducted in unit classrooms on the
installation. The soldiers were escorted to the classrooms by
non	commissioned officers, and according to the investigation, some of the
non-commissioned officers had knowledge of the solicitation actions taking
place. In addition to the financial management classes, one of the agents
allegedly made insurance presentations in training areas to
non	commissioned officers. During these presentations, some trainees met
with the agent and subsequently purchased life insurance policies.

Investigators determined that these actions violated prohibited
solicitation practices including soliciting during enlistment or induction
processing or during basic combat training; soliciting to mass, group, or
captive audiences; making appointments with or soliciting military
personnel who are in an "on duty" status; and using manipulative,
deceptive, or fraudulent devices or schemes to sell products, including
misleading advertising and sales literature.

Documentation used to assess the scope of the problem: The investigation
report included sworn statements from involved non	commissioned officers,
soldiers who attended the briefings, and Army community affairs officials
who received complaints from two of the soldiers involved.

Estimated number of affected servicemembers: 906

Actions taken:

o
By the installation: Installation solicitation privileges for the two
agents were revoked.

o
By the insurance company: The agents involved were fired from the
insurance company they represented. The insurance company offered

Appendix II
Details on Selected Recent In-Depth
Investigations

refunds to affected persons, and as of May 2005, about 20 percent of the
soldiers received refunds.

Installation's interaction with state insurance commissioner's office:
Installation officials have provided information to the state of Georgia
regarding these incidents.

                                  Appendix III

                                Allotment Forms

Appendix III Allotment Forms

                                  Appendix IV

                    Comments from the Department of Defense

Note: Page numbers in the draft report may differ from those in this
report.

Appendix IV
Comments from the Department of Defense

Appendix IV
Comments from the Department of Defense

Appendix IV
Comments from the Department of Defense

Appendix IV
Comments from the Department of Defense

Appendix V

                     GAO Contact and Staff Acknowledgments

GAO Contact Derek B. Stewart (202) 512-5559

Acknowledgments	In addition to the individual named above, James Cook,
Jack Edwards, Lynn Johnson, David Mayfield, Terry Richardson, Arnett
Sanders, Cheryl Weissman, and Kristy Williams made key contributions to
this report.

Related GAO Products

Military Personnel: DOD Comments on GAO's Report on More DOD Actions
Needed to Address Servicemembers' Personal Financial Management Issues.
GAO-05-638R. Washington, D.C.: May 11, 2005.

Defense Base Act Insurance: Review Needed of Cost and Implementation
Issues. GAO-05-280R. Washington, D.C.: April 29, 2005.

Military Personnel: More DOD Actions Needed to Address Servicemembers'
Personal Financial Management Issues. GAO-05-348. Washington, D.C.: April
26, 2005.

Military Personnel: DOD's Tools for Curbing the Use and Effects of
Predatory Lending Not Fully Utilized. GAO-05-349. Washington, D.C.: April
26, 2005.

Credit Reporting Literacy: Consumers Understood the Basics but Could
Benefit from Targeted Educational Efforts. GAO-05-223. Washington, D.C.:
March 16, 2005.

DOD Systems Modernization: Management of Integrated Military Human Capital
Program Needs Additional Improvements. GAO-05-189. Washington, D.C.:
February 11, 2005.

Highlights of a GAO Forum: The Federal Government's Role in Improving
Financial Literacy. GAO-05-93SP. Washington, D.C.: November 15, 2004.

Military Personnel: Survivor Benefits for Servicemembers and Federal,
State, and City Government Employees. GAO-04-814. Washington, D.C.: July
15, 2004.

Military Personnel: Active Duty Benefits Reflect Changing Demographics,
but Opportunities Exist to Improve. GAO-02-935. Washington, D.C.:
September 18, 2002.

Military Banking: Solicitations, Fees, and Revenue Potential.

GAO/NSIAD-99-72. Washington, D.C.: April 15, 1999.

GAO's Mission	The Government Accountability Office, the audit, evaluation
and investigative arm of Congress, exists to support Congress in meeting
its constitutional responsibilities and to help improve the performance
and accountability of the federal government for the American people. GAO
examines the use of public funds; evaluates federal programs and policies;
and provides analyses, recommendations, and other assistance to help
Congress make informed oversight, policy, and funding decisions. GAO's
commitment to good government is reflected in its core values of
accountability, integrity, and reliability.

Obtaining Copies of The fastest and easiest way to obtain copies of GAO
documents at no cost

is through GAO's Web site (www.gao.gov). Each weekday, GAO postsGAO
Reports and newly released reports, testimony, and correspondence on its
Web site. To Testimony have GAO e-mail you a list of newly posted products
every afternoon, go to

www.gao.gov and select "Subscribe to Updates."

Order by Mail or Phone	The first copy of each printed report is free.
Additional copies are $2 each. A check or money order should be made out
to the Superintendent of Documents. GAO also accepts VISA and Mastercard.
Orders for 100 or more copies mailed to a single address are discounted 25
percent. Orders should be sent to:

U.S. Government Accountability Office 441 G Street NW, Room LM Washington,
D.C. 20548

To order by Phone:	Voice: (202) 512-6000 TDD: (202) 512-2537 Fax: (202)
512-6061

  To Report Fraud, Contact:
  Waste, and Abuse in Web site: www.gao.gov/fraudnet/fraudnet.htm

E-mail: [email protected] Programs Automated answering system: (800)
424-5454 or (202) 512-7470

Congressional	Gloria Jarmon, Managing Director, [email protected] (202)
512-4400 U.S. Government Accountability Office, 441 G Street NW, Room 7125

Relations Washington, D.C. 20548

Public Affairs	Paul Anderson, Managing Director, [email protected] (202)
512-4800 U.S. Government Accountability Office, 441 G Street NW, Room 7149
Washington, D.C. 20548
*** End of document. ***