I

104TH CONGRESS

2D SESSION H. R. 2843

To amend title 38, United States Code, to change the name of the Servicemen’s Group Life Insurance program to Servicemembers’ Group Life

Insurance, to authorize the termination of life insurance under that

program when premiums are not paid, to provide for coverage under

that program to be provided automatically at the maximum level unless

the servicemember elects a lower level, and to make other improvements

to life insurance programs administered by the Secretary of Veterans

Affairs.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 4, 1996

Mr. STUMP (for himself, Mr. MONTGOMERY, Mr. EVERETT, Mr. EVANS, and

Mr. SMITH of New Jersey) introduced the following bill; which was referred to the Committee on Veterans’ Affairs

A BILL

To amend title 38, United States Code, to change the name

of the Servicemen’s Group Life Insurance program to

Servicemembers’ Group Life Insurance, to authorize the

termination of life insurance under that program when

premiums are not paid, to provide for coverage under

that program to be provided automatically at the maximum level unless the servicemember elects a lower level,

and to make other improvements to life insurance programs administered by the Secretary of Veterans Affairs.
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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; REFERENCES TO TITLE 38,

4 UNITED STATES CODE.

5 (a) SHORT TITLE.—This Act may be cited as the

6 ‘‘Veterans’ Insurance Reform Act of 1995’’.

7 (b) REFERENCES.—Except as otherwise expressly

8 provided, whenever in this Act an amendment is expressed

9 in terms of an amendment to a section or other provision,

10 the reference shall be considered to be made to a section

11 or other provision of title 38, United States Code.

12 SEC. 2. AUTHORITY TO TERMINATE SERVICEMEN’S GROUP

13 LIFE INSURANCE WHEN PREMIUMS ARE NOT

14 PAID.

15 (a) AUTHORITY.—Section 1969(a)(2) is amended—

16 (1) by inserting ‘‘(A)’’ after ‘‘(2)’’; and

17 (2) by adding at the end the following:

18 ‘‘(B) If an individual who is required pursuant to

19 subparagraph (A) to make a direct remittance of costs to

20 the Secretary concerned fails to make the required remit21 tance within 60 days of the date on which such remittance

22 is due, such individual’s insurance with respect to which

23 such remittance is required shall be terminated by the Sec24 retary concerned. Such termination shall be made by writ25 ten notice to the individual’s official address and shall be
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1 effective 60 days after the date of such notice. Such termi2 nation of insurance may be vacated if, before the effective

3 date of termination, the individual remits all amounts past

4 due for such insurance and demonstrates to the satisfac5 tion of the Secretary concerned that the failure to make

6 timely remittances was justifiable.’’.

7 (b) CONFORMING AMENDMENT.—Section 1968(a) is

8 amended by inserting ‘‘(or discontinued pursuant to sec9 tion 1969(a)(2)(B) of this title)’’ in the matter preceding

10 paragraph (1) after ‘‘upon the written request of the

11 insured’’.

12 SEC. 3. AUTOMATIC MAXIMUM COVERAGE UNDER SERVICE13 MEN’S GROUP LIFE INSURANCE.

14 (a) AUTOMATIC MAXIMUM COVERAGE.—Section

15 1967 is amended in subsections (a) and (c) by striking

16 out ‘‘$100,000’’ each place it appears and inserting in lieu

17 thereof in each instance ‘‘$200,000’’.

18 (b) INFORMATION TO BE PROVIDED MEMBERS.—

19 Subsection (e) of such section is amended to read as fol20 lows:

21 ‘‘(e) Whenever a member has the opportunity to

22 make an election under subsection (a) not to be insured

23 under this subchapter, or to be insured under this sub24 chapter in an amount less than the maximum amount, and

25 at such other times periodically thereafter as the Secretary
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1 concerned considers appropriate, the Secretary concerned

2 shall furnish to the member general information concern3 ing life insurance. Such information shall include—

4 ‘‘(1) the purpose and role of life insurance in fi5 nancial planning;

6 ‘‘(2) the difference between term life insurance

7 and whole life insurance;

8 ‘‘(3) the availability of commercial life insur9 ance; and

10 ‘‘(4) the relationship between Servicemembers’

11 Group Life Insurance and Veterans’ Group Life In12 surance.’’.

13 SEC. 4. RENAMING OF SERVICEMEN’S GROUP LIFE INSUR14 ANCE PROGRAM.

15 (a) IN GENERAL.—The program of insurance oper16 ated by the Secretary of Veterans Affairs under sub17 chapter III of chapter 19 of title 38, United States Code,

18 is hereby redesignated as the Servicemembers’ Group Life

19 Insurance program.

20 (b) AMENDMENTS TO CHAPTER 19.—(1) Sections

21 1967(a), (c), and (f), 1968(b), 1969(a)–(e), 1970(a), (f),

22 and (g), 1971(b), 1973, 1974, and 1977(a), (d), (e), and

23 (g) are amended by striking out ‘‘Servicemen’s Group’’

24 each place it appears and inserting in lieu thereof

25 ‘‘Servicemembers’ Group’’.
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1 (2)(A) The heading of subchapter III of chapter 19

2 is amended to read as follows:

3 ‘‘SUBCHAPTER III—SERVICEMEMBERS’ GROUP

4 LIFE INSURANCE (FORMERLY SERVICE5 MEN’S GROUP LIFE INSURANCE)’’.

6 (B) The heading of section 1974 is amended to read

7 as follows:

8 ‘‘§ 1974. Advisory Council on Servicemembers’ Group

9 Life Insurance (formerly Servicemen’s

10 Group Life Insurance)’’.

11 (3) The table of sections at the beginning of chapter

12 19 is amended—

13 (A) by striking out the item relating to sub14 chapter III and inserting in lieu thereof the follow15 ing:

‘‘SUBCHAPTER III—SERVICEMEMBERS’ GROUP LIFE INSURANCE (FORMERLY

SERVICEMEN’S GROUP LIFE INSURANCE)’’; and

16 (B) by striking out the item relating to section

17 1974 and inserting in lieu thereof the following:

‘‘1974. Advisory Council on Servicemembers’ Group Life Insurance (formerly

Servicemen’s Group Life Insurance)’’.

18 (c) OTHER CONFORMING AMENDMENTS.—(1) Sec19 tion 1315(f)(1)(F) is amended by striking out ‘‘service20 men’s’’ the first place it appears and inserting in lieu

21 thereof ‘‘servicemembers’’.
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1 (2) Sections 3017(a) and 3224(1) are amended by

2 striking out ‘‘Servicemen’s’’ each place it appears and in3 serting in lieu thereof ‘‘Servicemembers’ ’’.

4 SEC. 5. MERGER OF RETIRED RESERVE SERVICEMEMBERS’

5 GROUP LIFE INSURANCE AND VETERANS’

6 GROUP LIFE INSURANCE AND EXTENSION OF

7 VETERANS’ GROUP LIFE INSURANCE TO

8 MEMBERS OF THE READY RESERVE.

9 (a) DEFINITION OF MEMBER.—Section 1965(5) is

10 amended—

11 (1) by inserting ‘‘and’’ at the end of subpara12 graph (B);

13 (2) by striking out subparagraphs (C) and (D);

14 and

15 (3) by redesignating subparagraph (E) as sub16 paragraph (C).

17 (b) PERSONS INSURED.—Section 1967 is amended—

18 (1) in subsection (a)—

19 (A) by inserting ‘‘and’’ at the end of para20 graph (1);

21 (B) by striking out paragraphs (3) and

22 (4); and

23 (C) by striking out ‘‘or the first day a

24 member of the Reserves, whether or not as25 signed to the Retired Reserve of a uniformed
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1 service, meets the qualifications of section

2 1965(5)(C) of this title, or the first day a mem3 ber of the Reserves meets the qualifications of

4 section 1965(5)(D) of this title,’’;

5 (2) by striking out subsection (d); and

6 (3) by redesignating subsections (e) and (f) as

7 subsections (d) and (e), respectively.

8 (c) DURATION AND TERMINATION OF COVERAGE.—

9 Section 1968 is amended—

10 (1) in subsection (a)—

11 (A) by striking out ‘‘subparagraph (B),

12 (C), or (D) of section 1965(5)’’ and inserting in

13 lieu thereof ‘‘section 1965(5)(B)’’;

14 (B) by striking out the period at the end

15 of paragraphs (1) and (2) and inserting in lieu

16 thereof a semicolon;

17 (C) by striking out the period at the end

18 of paragraph (3) and inserting in lieu thereof ‘‘;

19 and’’;

20 (D) in paragraph (4)—

21 (i) by striking out ‘‘from such’’ in the

22 matter preceding subparagraph (A) and all

23 that follows through ‘‘(A) unless on’’ and

24 inserting in lieu thereof ‘‘from such assign25 ment, unless on’’;
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1 (ii) by striking out the semicolon after

2 ‘‘such assignment’’ and inserting in lieu

3 thereof a period; and

4 (iii) by striking out subparagraphs

5 (B) and (C); and

6 (E) by striking out paragraphs (5) and

7 (6); and

8 (2) in subsection (b), by striking out the last

9 two sentences.

10 (d) PREMIUMS.—Section 1969 is amended—

11 (1) in subsection (a)(2), by striking out ‘‘is as12 signed to the Reserve (other than the Retired Re13 serve) and meets the qualifications of section

14 1965(5)(C) of this title, or is assigned to the Retired

15 Reserve and meets the qualifications of section

16 1965(5)(D) of this title,’’;

17 (2) by striking out subsection (e); and

18 (3) by redesignating subsections (f) and (g) as

19 subsections (e) and (f), respectively.

20 SEC. 6. CONVERSION TO COMMERCIAL LIFE INSURANCE

21 POLICY.

22 (a) SGLI CONVERSION.—Subsection (b) of section

23 1968, as amended by section 5(c)(2), is amended—

24 (1) by inserting ‘‘(1)’’ after ‘‘(b)’’ at the begin25 ning of the subsection;
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1 (2) by striking out ‘‘would cease,’’ in the first

2 sentence and all that follows through the period at

3 the end of the sentence and inserting in lieu thereof

4 ‘‘would cease—

5 ‘‘(A) shall be automatically converted to Veter6 ans’ Group Life Insurance, subject to (i) the timely

7 payment of the initial premium under terms pre8 scribed by the Secretary, and (ii) the terms and con9 ditions set forth in section 1977 of this title; or

10 ‘‘(B) at the election of the member, shall be

11 converted to an individual policy of insurance as de12 scribed in section 1977(e) of this title upon written

13 application for conversion made to the participating

14 company selected by the member and payment of the

15 required premiums.’’; and

16 (3) by designating the second sentence as para17 graph (2) and in that sentence striking out ‘‘Such

18 automatic conversion’’ and inserting in lieu thereof

19 ‘‘Automatic conversion to Veterans’ Group Life In20 surance under paragraph (1)’’.

21 (b) VGLI CONVERSION.—Section 1977 is amended—

22 (1) in subsection (a)—

23 (A) by inserting ‘‘(1)’’ after ‘‘(a)’’;

24 (B) by striking out the last two sentences;

25 and
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1 (C) by adding at the end the following:

2 ‘‘(2) If any person insured under Veterans’ Group

3 Life Insurance again becomes insured under

4 Servicemembers’ Group Life Insurance but dies before ter5 minating or converting such person’s Veterans’ Group In6 surance, Veterans’ Group Life Insurance shall be payable

7 only if such person is insured for less than $200,000

8 under Servicemembers’ Group Life Insurance, and then

9 only in an amount which, when added to the amount of

10 Servicemembers’ Group Life Insurance payable, does not

11 exceed $200,000.’’; and

12 (2) in subsection (e)—

13 (A) in the first sentence, by inserting ‘‘at

14 any time’’ after ‘‘shall have the right’’; and

15 (B) by striking out the third sentence and

16 inserting in lieu thereof the following: ‘‘The

17 Veterans’ Group Life Insurance policy will ter18 minate on the day before the date on which the

19 individual policy becomes effective.’’.

20 SEC. 7. EFFECTIVE DATE.

21 The Servicemembers’ Group Life Insurance of any

22 member of the Retired Reserve of a uniformed service in

23 force on the date of the enactment of this Act shall be
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1 converted, effective 90 days after that date, to Veterans’

2 Group Life Insurance.

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