Veterans' Insurance Reform Act of 1995

Summary: Veterans' Insurance Reform Act of 1995 - Authorizes the Secretary of the military department concerned to terminate an individual's coverage under the Servicemen's Group Life Insurance (SGLI) if such individual does not pay the required premiums within 60 days after their due date.  Requires written notification of such termination. Vacates such termination if such individual, before the effective date of such termination (60 days after notification), remits all past due amounts and demonstrates to the Secretary's satisfaction that the failure to make timely payments was justifiable. 
Increases from $100,000 to $200,000 the maximum automatic coverage for individuals under the SGLI.  Requires specified information to be provided to SGLI holders. 
Redesignates SGLI as Servicemembers' Group Life Insurance. 
Merges into SGLI those individuals currently covered under the Retired SGLI program.  Revises provisions concerning duration and termination of coverage and premiums with respect to such newly-covered individuals. 
Allows SGLI policies to be converted, upon the completion of miitary duty or travel, to a commercial life insurance policy with a participating company selected by the individual. 
Provides for the payment of Veterans' Group Life Insurance (VGLI) to an individual who has in effect at death both SGLI and VGLI coverage, limiting the total benefits payable from both policies to $200,000.  Allows VGLI policies to be converted to commercial life insurance policies. 
Requires SGLI coverage of any member of the Retired Reserve to be converted to VGLI coverage 90 days after the enactment of this Act.

SECTION 1. SHORT TITLE; REFERENCES TO TITLE 38, UNITED STATES CODE.

    (a) Short Title.--This Act may be cited as the ``Veterans' 
Insurance Reform Act of 1995''.
    (b) References.--Except as otherwise expressly provided, whenever 
in this Act an amendment is expressed in terms of an amendment to a 
section or other provision, the reference shall be considered to be 
made to a section or other provision of title 38, United States Code.

SEC. 2. AUTHORITY TO TERMINATE SERVICEMEN'S GROUP LIFE INSURANCE WHEN 
              PREMIUMS ARE NOT PAID.

    (a) Authority.--Section 1969(a)(2) is amended--
            (1) by inserting ``(A)'' after ``(2)''; and
            (2) by adding at the end the following:
    ``(B) If an individual who is required pursuant to subparagraph (A) 
to make a direct remittance of costs to the Secretary concerned fails 
to make the required remittance within 60 days of the date on which 
such remittance is due, such individual's insurance with respect to 
which such remittance is required shall be terminated by the Secretary 
concerned. Such termination shall be made by written notice to the 
individual's official address and shall be effective 60 days after the 
date of such notice. Such termination of insurance may be vacated if, 
before the effective date of termination, the individual remits all 
amounts past due for such insurance and demonstrates to the 
satisfaction of the Secretary concerned that the failure to make timely 
remittances was justifiable.''.
    (b) Conforming Amendment.--Section 1968(a) is amended by inserting 
``(or discontinued pursuant to section 1969(a)(2)(B) of this title)'' 
in the matter preceding paragraph (1) after ``upon the written request 
of the insured''.

SEC. 3. AUTOMATIC MAXIMUM COVERAGE UNDER SERVICEMEN'S GROUP LIFE 
              INSURANCE.

    (a) Automatic Maximum Coverage.--Section 1967 is amended in 
subsections (a) and (c) by striking out ``$100,000'' each place it 
appears and inserting in lieu thereof in each instance ``$200,000''.
    (b) Information To Be Provided Members.--Subsection (e) of such 
section is amended to read as follows:
    ``(e) Whenever a member has the opportunity to make an election 
under subsection (a) not to be insured under this subchapter, or to be 
insured under this subchapter in an amount less than the maximum 
amount, and at such other times periodically thereafter as the 
Secretary concerned considers appropriate, the Secretary concerned 
shall furnish to the member general information concerning life 
insurance. Such information shall include--
            ``(1) the purpose and role of life insurance in financial 
        planning;
            ``(2) the difference between term life insurance and whole 
        life insurance;
            ``(3) the availability of commercial life insurance; and
            ``(4) the relationship between Servicemembers' Group Life 
        Insurance and Veterans' Group Life Insurance.''.

SEC. 4. RENAMING OF SERVICEMEN'S GROUP LIFE INSURANCE PROGRAM.

    (a) In General.--The program of insurance operated by the Secretary 
of Veterans Affairs under subchapter III of chapter 19 of title 38, 
United States Code, is hereby redesignated as the Servicemembers' Group 
Life Insurance program.
    (b) Amendments to Chapter 19.--(1) Sections 1967(a), (c), and (f), 
1968(b), 1969(a)-(e), 1970(a), (f), and (g), 1971(b), 1973, 1974, and 
1977(a), (d), (e), and (g) are amended by striking out ``Servicemen's 
Group'' each place it appears and inserting in lieu thereof 
``Servicemembers' Group''.
    (2)(A) The heading of subchapter III of chapter 19 is amended to 
read as follows:

   ``SUBCHAPTER III--SERVICEMEMBERS' GROUP LIFE INSURANCE (FORMERLY 
                 SERVICEMEN'S GROUP LIFE INSURANCE)''.

    (B) The heading of section 1974 is amended to read as follows:
``Sec. 1974. Advisory Council on Servicemembers' Group Life Insurance 
              (formerly Servicemen's Group Life Insurance)''.
    (3) The table of sections at the beginning of chapter 19 is 
amended--
            (A) by striking out the item relating to subchapter III and 
        inserting in lieu thereof the following:
   ``subchapter iii--servicemembers' group life insurance (formerly 
               servicemen's group life insurance)''; and
            (B) by striking out the item relating to section 1974 and 
        inserting in lieu thereof the following:

``1974. Advisory Council on Servicemembers' Group Life Insurance 
                            (formerly Servicemen's Group Life 
                            Insurance)''.
    (c) Other Conforming Amendments.--(1) Section 1315(f)(1)(F) is 
amended by striking out ``servicemen's'' the first place it appears and 
inserting in lieu thereof ``servicemembers''.
    (2) Sections 3017(a) and 3224(1) are amended by striking out 
``Servicemen's'' each place it appears and inserting in lieu thereof 
``Servicemembers'''.

SEC. 5. MERGER OF RETIRED RESERVE SERVICEMEMBERS' GROUP LIFE INSURANCE 
              AND VETERANS' GROUP LIFE INSURANCE AND EXTENSION OF 
              VETERANS' GROUP LIFE INSURANCE TO MEMBERS OF THE READY 
              RESERVE.

    (a) Definition of Member.--Section 1965(5) is amended--
            (1) by inserting ``and'' at the end of subparagraph (B);
            (2) by striking out subparagraphs (C) and (D); and
            (3) by redesignating subparagraph (E) as subparagraph (C).
    (b) Persons Insured.--Section 1967 is amended--
            (1) in subsection (a)--
                    (A) by inserting ``and'' at the end of paragraph 
                (1);
                    (B) by striking out paragraphs (3) and (4); and
                    (C) by striking out ``or the first day a member of 
                the Reserves, whether or not assigned to the Retired 
                Reserve of a uniformed service, meets the 
                qualifications of section 1965(5)(C) of this title, or 
                the first day a member of the Reserves meets the 
                qualifications of section 1965(5)(D) of this title,'';
            (2) by striking out subsection (d); and
            (3) by redesignating subsections (e) and (f) as subsections 
        (d) and (e), respectively.
    (c) Duration and Termination of Coverage.--Section 1968 is 
amended--
            (1) in subsection (a)--
                    (A) by striking out ``subparagraph (B), (C), or (D) 
                of section 1965(5)'' and inserting in lieu thereof 
                ``section 1965(5)(B)'';
                    (B) by striking out the period at the end of 
                paragraphs (1) and (2) and inserting in lieu thereof a 
                semicolon;
                    (C) by striking out the period at the end of 
                paragraph (3) and inserting in lieu thereof ``; and'';
                    (D) in paragraph (4)--
                            (i) by striking out ``from such'' in the 
                        matter preceding subparagraph (A) and all that 
                        follows through ``(A) unless on'' and inserting 
                        in lieu thereof ``from such assignment, unless 
                        on'';
                            (ii) by striking out the semicolon after 
                        ``such assignment'' and inserting in lieu 
                        thereof a period; and
                            (iii) by striking out subparagraphs (B) and 
                        (C); and
                    (E) by striking out paragraphs (5) and (6); and
            (2) in subsection (b), by striking out the last two 
        sentences.
    (d) Premiums.--Section 1969 is amended--
            (1) in subsection (a)(2), by striking out ``is assigned to 
        the Reserve (other than the Retired Reserve) and meets the 
        qualifications of section 1965(5)(C) of this title, or is 
        assigned to the Retired Reserve and meets the qualifications of 
        section 1965(5)(D) of this title,'';
            (2) by striking out subsection (e); and
            (3) by redesignating subsections (f) and (g) as subsections 
        (e) and (f), respectively.

SEC. 6. CONVERSION TO COMMERCIAL LIFE INSURANCE POLICY.

    (a) SGLI Conversion.--Subsection (b) of section 1968, as amended by 
section 5(c)(2), is amended--
            (1) by inserting ``(1)'' after ``(b)'' at the beginning of 
        the subsection;
            (2) by striking out ``would cease,'' in the first sentence 
        and all that follows through the period at the end of the 
        sentence and inserting in lieu thereof ``would cease--
            ``(A) shall be automatically converted to Veterans' Group 
        Life Insurance, subject to (i) the timely payment of the 
        initial premium under terms prescribed by the Secretary, and 
        (ii) the terms and conditions set forth in section 1977 of this 
        title; or
            ``(B) at the election of the member, shall be converted to 
        an individual policy of insurance as described in section 
        1977(e) of this title upon written application for conversion 
        made to the participating company selected by the member and 
        payment of the required premiums.''; and
            (3) by designating the second sentence as paragraph (2) and 
        in that sentence striking out ``Such automatic conversion'' and 
        inserting in lieu thereof ``Automatic conversion to Veterans' 
        Group Life Insurance under paragraph (1)''.
    (b) VGLI Conversion.--Section 1977 is amended--
            (1) in subsection (a)--
                    (A) by inserting ``(1)'' after ``(a)'';
                    (B) by striking out the last two sentences; and
                    (C) by adding at the end the following:
    ``(2) If any person insured under Veterans' Group Life Insurance 
again becomes insured under Servicemembers' Group Life Insurance but 
dies before terminating or converting such person's Veterans' Group 
Insurance, Veterans' Group Life Insurance shall be payable only if such 
person is insured for less than $200,000 under Servicemembers' Group 
Life Insurance, and then only in an amount which, when added to the 
amount of Servicemembers' Group Life Insurance payable, does not exceed 
$200,000.''; and
            (2) in subsection (e)--
                    (A) in the first sentence, by inserting ``at any 
                time'' after ``shall have the right''; and
                    (B) by striking out the third sentence and 
                inserting in lieu thereof the following: ``The 
                Veterans' Group Life Insurance policy will terminate on 
                the day before the date on which the individual policy 
                becomes effective.''.

SEC. 7. EFFECTIVE DATE.

    The Servicemembers' Group Life Insurance of any member of the 
Retired Reserve of a uniformed service in force on the date of the 
enactment of this Act shall be converted, effective 90 days after that 
date, to Veterans' Group Life Insurance.