Servicemembers Civil Relief Act
The Servicemembers Civil Relief Act (SCRA) was signed into law in 2003 to provide active-duty military personnel some relief from worry about their daily financial burdens by enacting protections from certain penalties that may result from business transactions. Businesses operating in the United States are subject to the SCRA. It is important for your clients who are business owners to understand the protections granted by the SCRA in order to mitigate the risk of costly claims and lawsuits.
The SCRA applies to active-duty members of the Army, Marine Corps, Navy, Coast Guard, and Air Force as well as the following:
• Reserve component members while on active duty
• National Guard component members mobilized under federal orders for more the 30 consecutive days
• Active-duty commissioned officers of the Public Health Service and National Oceanic and Atmospheric Administration (NOAA)
Protections granted under the SCRA may be exercised by anyone holding a valid power of attorney for the servicemember, and some protections also apply to dependents.
The following protections are granted under the SCRA:
1. Reducing the interest rate on any pre-service loans to a maximum of 6 percent
2. Protections against default judgments in civil cases
3. Protections against foreclosure on the servicemember's home
4. Protections against repossession of the servicemember's property
5. Termination of residential housing and automobile leases without penalty
6. Protections against the enforcement of storage liens
This is a very broad overview of the SCRA, and it is critical that insurance agents and their clients operating commercial businesses be aware of and understand the terms of this federal law in order to remain in compliance and avoid claims or lawsuits resulting from violations. Knowingly violating the SCRA may result in fines and penalties including imprisonment.
Learn more about the SCRA by clicking on the links below or by contacting a MiniCo claims professional at 800-528-1056 or email@example.com.