[Federal Register Volume 83, Number 245 (Friday, December 21, 2018)]
[Rules and Regulations]
[Pages 65527-65529]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27749]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 9

RIN 2900-AQ12


Veterans' Group Life Insurance Increased Coverage

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: Current statutory provisions provide Veterans' Group Life 
Insurance (VGLI) insureds under the age of 60 with the opportunity to 
increase their VGLI coverage by $25,000 not more than once in each 
five-year period beginning on the one-year anniversary of the date a 
person becomes insured under VGLI. The Department of Veterans Affairs 
(VA) is finalizing the amendment of its VGLI regulations to establish a 
permanent regulatory framework for such elections of increased 
coverage. The final rule clarifies that coverage increases in an amount 
less than $25,000 are available only when existing VGLI coverage is 
within $25,000 of the Servicemembers' Group Life Insurance maximum of 
$400,000, and any increases of less than $25,000 must be only in an 
amount that would bring the insurance coverage up to the statutory 
maximum.

DATES: Effective date: This rule is effective on January 22, 2019.

FOR FURTHER INFORMATION CONTACT: Karen Naccarelli, Department of 
Veterans Affairs Insurance Center (310/290B), P.O. Box 13399, 
Philadelphia, Pennsylvania 19101, (215) 381-3029. (This is not a toll-
free number.)

SUPPLEMENTARY INFORMATION: On April 27, 2018, VA published in the 
Federal Register (83 FR 18491) a proposed rule seeking comments 
regarding amendment of 38 CFR 9.2 to reflect Section 404 of the 
Veterans' Benefits Act of 2010, Public Law 111-275, 124 Stat. 2879-2880 
(2010). The amendment

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provides that insureds who are under 60 years of age and who have less 
than the statutory maximum of SGLI coverage can elect in writing to 
increase coverage by $25,000 not more than once in each five-year 
period beginning on their one-year VGLI coverage anniversary date. 
Section 404 added to 38 U.S.C. 1977(a) a new paragraph (3), which took 
effect April 11, 2011. To promptly implement this statutory change, VA 
adopted interim procedures for increasing VGLI coverage. See the 
``Servicemembers' and Veterans' Group Life Insurance Handbook, Chapter 
12.01, on the VA Insurance website at http://www.benefits.va.gov/INSURANCE/resources_handbook_ins_chapter12.asp which outlines the 
interim process. This final regulation is intended to establish a 
permanent regulatory framework for affording additional VGLI coverage 
under section 404.
    The proposed regulation was published in the Federal Register for 
public comments on April 27, 2018. Two public comments were received 
that support the proposed amendment. The comments stated that the rule 
provides the insured with the right to the earliest opportunity to 
increase coverage under the law. The comments also noted that the 
opportunity to increase coverage is provided at predictable times, 
which benefits both the insured and the insurer as it relates to 
planning potential changes in coverage and premiums.
    Based on the rationale set forth in the preamble of the proposed 
rule and the two public comments received, VA adopts, without change, 
the proposed rule published on April 27, 2018, at 83 FR 18491.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any one year. This final rule would have no such effect 
on State, local, and tribal governments or the private sector.

Paperwork Reduction Act

    This final rule contains no provisions constituting a collection of 
information under the Paperwork Reduction Act (44 U.S.C 3501-3521).

Executive Orders 12866, 13563, and 13771

    Executive Orders 12866 and 13563 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, when 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, and other advantages; distributive impacts; 
and equity). Executive Order 13563 (Improving Regulation and Regulatory 
Review) emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
Executive Order 12866 (Regulatory Planning and Review) defines a 
``significant regulatory action'' requiring review by the Office of 
Management and Budget (OMB), unless OMB waives such review, as ``any 
regulatory action that is likely to result in a rule that may: (1) Have 
an annual effect on the economy of $100 million or more or adversely 
affect in a material way the economy, a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or State, local, or tribal governments or communities; (2) 
Create a serious inconsistency or otherwise interfere with an action 
taken or planned by another agency; (3) Materially alter the budgetary 
impact of entitlements, grants, user fees, or loan programs or the 
rights and obligations of recipients thereof; or (4) Raise novel legal 
or policy issues arising out of legal mandates, the President's 
priorities, or the principles set forth in this Executive Order.''
    The economic, interagency, budgetary, legal, and policy 
implications of this regulatory action have been examined, and it has 
been determined not to be a significant regulatory action under 
Executive Order 12866. VA's impact analysis can be found as a 
supporting document at http://www.regulations.gov, usually within 48 
hours after the rulemaking document is published. Additionally, a copy 
of the rulemaking and its impact analysis are available on VA's website 
at http://www.va.gov/orpm by following the link for ``VA Regulations 
Published from FY 2004 through FYTD.'' This rule is not an E.O. 13771 
regulatory action because this rule is not significant under E.O. 
12866.

Regulatory Flexibility Act

    The Secretary hereby certifies that this final rule would not have 
a significant economic impact on a substantial number of small entities 
as they are defined in the Regulatory Flexibility Act (5 U.S.C. 601-
612). This final rule would directly affect only individuals and would 
not directly affect small entities. Therefore, pursuant to 5 U.S.C. 
605(b), this rulemaking is exempt from the initial and final regulatory 
flexibility analysis requirements of sections 603 and 604.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance number and title for the 
programs affected by this document is 64.103, Life Insurance for 
Veterans.

List of Subjects in 38 CFR Part 9

    Life insurance, Military personnel, Veterans.

Signing Authority

    The Secretary of Veterans Affairs approved this document and 
authorized the undersigned to sign and submit the document to the 
Office of the Federal Register for publication electronically as an 
official document of the Department of Veterans Affairs. Robert L. 
Wilkie, Secretary, Department of Veterans Affairs, approved this 
document on December 17, 2018, for publication.

    Dated: December 17, 2018.
Jeffrey M. Martin,
Assistant Director, Office of Regulation Policy & Management, Office of 
the Secretary, Department of Veterans Affairs.

    For the reasons stated in the preamble, the Department of Veterans 
Affairs amends 38 CFR part 9 as follows:

PART 9--SERVICEMEMBERS' GROUP LIFE INSURANCE AND VETERANS' GROUP 
LIFE INSURANCE

0
1. The authority citation for part 9 continues to read as follows:

    Authority:  38 U.S.C. 501, 1965-1980A, unless otherwise noted.


0
2. In Sec.  9.2, add new paragraph (b)(5) to read as follows:


Sec.  9.2  Effective date; applications.

* * * * *
    (b) * * *
    (5) Pursuant to 38 U.S.C. 1977(a)(3), former members under the age 
of 60 can elect to increase their Veterans' Group Life Insurance 
coverage by $25,000, up to the existing Servicemembers' Group Life 
Insurance maximum. The insured's first opportunity to elect to increase 
coverage is on the one-year Veterans' Group Life Insurance coverage 
anniversary date. Thereafter, the insured could elect to increase 
coverage on the five-year anniversary date of the first VGLI coverage 
increase election opportunity and subsequently every five years from 
the anniversary date of the insured's last VGLI coverage increase 
election opportunity. Increases of less than $25,000 are only available 
when existing Veterans' Group Life Insurance

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coverage is within less than $25,000 of the Servicemembers' Group Life 
Insurance maximum and any increases of less than $25,000 must be only 
in the amount needed to bring the insurance coverage up to the 
statutory maximum allowable amount of Servicemembers' Group Life 
Insurance. The eligible former members must apply for the increased 
coverage through the administrative office, within 120 days of 
invitation prior to the initial one-year anniversary date or within 120 
days prior to each subsequent five-year coverage anniversary date from 
the first VGLI coverage increase election opportunity. The increased 
coverage will be effective from the anniversary date immediately 
following the election.
* * * * *
[FR Doc. 2018-27749 Filed 12-20-18; 8:45 am]
BILLING CODE 8320-01-P