I 

109TH CONGRESS 

1ST SESSION H. R. 1618 

To amend title 38, United States Code, to establish a group disability insurance benefit for members of the Armed Forces who incur certain severe 

disabilities. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 13, 2005 

Mr. RENZI (for himself, Mr. SMITH of New Jersey, Mr. HAYWORTH, and Mr. 

JONES of North Carolina) introduced the following bill; which was referred to the Committee on Veterans’ Affairs 

A BILL 

To amend title 38, United States Code, to establish a group 

disability insurance benefit for members of the Armed 

Forces who incur certain severe disabilities. 

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. 

4 This Act may be cited as the ‘‘Wounded Warrior 

5 Servicemembers Group Disability Insurance Act of 2005’’. 
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1 SEC. 2. ESTABLISHMENT OF A PROGRAM OF GROUP DIS2 ABILITY INSURANCE FOR SEVERELY IN3 JURED MEMBERS OF THE ARMED FORCES. 

4 (a) IN GENERAL.—Chapter 19 of title 38, United 

5 States Code, is amended by adding at the end the fol6 lowing new subchapter: 

7 ‘‘SUBCHAPTER V—SERVICEMEMBERS’ GROUP 

8 DISABILITY INSURANCE 

9 ‘‘§ 1991. Definitions; program name 

10 ‘‘(a) DEFINITIONS.—Except as otherwise expressly 

11 provided, the definitions set forth in section 1965 of this 

12 title are applicable to this subchapter. 

13 ‘‘(b) PROGRAM NAME.—The program of insurance 

14 under this subchapter is known as ‘Servicemembers’ 

15 Group Disability Insurance’. 

16 ‘‘§ 1992. Program authority; eligible insurance compa17 nies 

18 ‘‘(a) PROGRAM AUTHORITY.—The Secretary is au19 thorized, without regard to section 3709 of the Revised 

20 Statutes (41 U.S.C. 5), to purchase from one or more in21 surance companies a policy or policies of group disability 

22 insurance to provide the benefits specified in this sub23 chapter. 

24 ‘‘(b) ELIGIBLE INSURANCE COMPANIES.—The Sec25 retary may only purchase a policy under this subchapter 

26 from an insurance company that— 
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1 ‘‘(1) is licensed to issue disability insurance in 

2 each of the 50 States of the United States and in 

3 the District of Columbia; and 

4 ‘‘(2) as of the most recent December 31 for 

5 which information is available to the Secretary, has 

6 in effect at least 1 percent of the total amount of 

7 group disability insurance which all insurance com8 panies have in effect in the United States. 

9 ‘‘(c) INSURANCE COMPANY ADMINISTRATIVE OF10 FICE.—Any insurance company issuing a policy under this 

11 subchapter shall establish an administrative office at a 

12 place and under a name designated by the Secretary. 

13 ‘‘(d) REINSURANCE.—The Secretary shall arrange 

14 with any insurance company issuing a policy under this 

15 subchapter to reinsure, under conditions approved by the 

16 Secretary, portions of the total amount of insurance under 

17 such policy with such other insurance companies (which 

18 meet qualifying criteria set forth by the Secretary) as may 

19 elect to participate in such reinsurance. 

20 ‘‘(e) DISCONTINUATION OF POLICIES.—The Sec21 retary may at any time discontinue any policy that the 

22 Secretary has purchased from any insurance company 

23 under this subchapter. 
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1 ‘‘§ 1993. Persons insured; amount 

2 ‘‘(a) PERSONS INSURED.—(1) Subject to an election 

3 under paragraph (2), any policy of insurance purchased 

4 by the Secretary under section 1992 of this title shall 

5 automatically insure any person insured under section 

6 1966 of this title. 

7 ‘‘(2) A person insured under section 1966 of this title 

8 may elect in writing not to be insured under this sub9 chapter. Any such election shall be in such form as the 

10 Secretary may prescribe. 

11 ‘‘(b) AMOUNT OF INSURANCE.—The amount for 

12 which a person is insured under this subchapter is 

13 $50,000. 

14 ‘‘(c) EFFECTIVE DATE OF COVERAGE.—The insur15 ance under this subchapter shall be effective with respect 

16 to a member on the latest of the following dates: 

17 ‘‘(1) The first day of active duty or active duty 

18 for training. 

19 ‘‘(2) The beginning of a period of inactive duty 

20 training scheduled in advance by competent author21 ity. 

22 ‘‘(3) In the case of a member of the Ready Re23 serve, the first day on which the member meets the 

24 qualifications set forth in section 1965(5)(B) of this 

25 title. 
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1 ‘‘(4) The date certified by the Secretary to the 

2 Secretary concerned as the date on which 

3 Servicemembers’ Group Disability Insurance under 

4 this subchapter for the class or group concerned 

5 takes effect. 

6 ‘‘(d) MEMBERS INJURED WHILE PROCEEDED TO OR

7 FROM DUTY.—(1) Any member (other than one who has 

8 elected not to be insured under this subchapter for the 

9 period or periods of duty involved)— 

10 ‘‘(A) who, when authorized or required by com11 petent authority, assumes an obligation to perform 

12 (for less than 31 days) active duty, or active duty 

13 for training, or inactive duty training scheduled in 

14 advance by competent authority; and 

15 ‘‘(B) who is rendered uninsurable at standard 

16 premium rates according to the good health stand17 ards approved by the Secretary, from a disability, or 

18 aggravation of a preexisting disability, incurred by 

19 such member while proceeding directly to or return20 ing directly from such active duty, active duty for 

21 training, or inactive duty training as the case may 

22 be; 

23 shall be deemed to have been on active duty, active duty 

24 for training, or inactive duty training, as the case may 
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1 be, and to have been insured under this subchapter at the 

2 time such disability was incurred or aggravated. 

3 ‘‘(2) In determining whether or not such member was 

4 so authorized or required to perform such duty, and 

5 whether or not such member was rendered uninsurable 

6 from a disability so incurred or aggravated, there shall be 

7 taken into account— 

8 ‘‘(A) the call or order to duty, the orders and 

9 authorizations of competent authority, the hour on 

10 which the member began to so proceed or to return, 

11 and the hour on which the member was scheduled to 

12 arrive for, or on which such member ceased to per13 form, such duty; 

14 ‘‘(B) the method of travel employed; 

15 ‘‘(C) the member’s itinerary; 

16 ‘‘(D) the manner in which the travel was per17 formed; and 

18 ‘‘(E) the immediate cause of disability. 

19 ‘‘(3) Whenever any claim is filed alleging that a per20 son insured under this subchapter is entitled to benefits 

21 by reason of this subsection, the burden of proof shall be 

22 on the insured person. 

23 ‘‘(e) SUBSEQUENT COVERAGE AFTER ELECTION NOT

24 TO BE COVERED.—If a person eligible for insurance under 

25 this subchapter is not so insured by reason of an election 
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1 made by a member under subparagraph (B) of subsection 

2 (a)(3), the person may thereafter be insured under this 

3 subchapter upon— 

4 ‘‘(1) written application by the member; 

5 ‘‘(2) proof of good health of the member’ and 

6 ‘‘(3) compliance with such other terms and con7 ditions as may be prescribed by the Secretary. 

8 ‘‘(f) FURNISHING OF INFORMATION.—Whenever a 

9 member has the opportunity to make an election under 

10 subsection (a) not to be insured under this subchapter, 

11 and at such other times periodically thereafter as the Sec12 retary concerned considers appropriate, the Secretary con13 cerned shall furnish to the member general information 

14 concerning disability insurance. Such information shall in15 clude— 

16 ‘‘(1) the purpose and role of disability insur17 ance in financial planning; and 

18 ‘‘(2) the availability of commercial disability in19 surance. 

20 ‘‘(g) CHANGES IN BENEFITS.—The effective date and 

21 time for any change in benefits under the Servicemembers’ 

22 Group Disability Insurance Program shall be based on the 

23 date and time according to the time zone immediately west 

24 of the International Date Line. 
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1 ‘‘§ 1994. Qualifying disabilities 

2 ‘‘Any of the following is a qualifying disability for the 

3 purposes of this subchapter: 

4 ‘‘(1) Complete and permanent loss of movement 

5 of an extremity. 

6 ‘‘(2) Burns of a severity equaling third degree 

7 or higher and affecting an area or areas of the body 

8 exceeding one square foot. 

9 ‘‘(3) The loss of sight of one or both eyes en10 tirely, irrecoverably, and uncorrectably. 

11 ‘‘(4) The permanent loss of one hand, by sever12 ance at or above the wrist joint. 

13 ‘‘(5) The permanent loss of one foot, by sever14 ance at or above the ankle joint. 

15 ‘‘(6) The loss of speech or hearing entirely, irre16 coverably, and uncorrectably. 

17 ‘‘(7) Any other disability specified by the Sec18 retary by regulation for the purposes of this section. 

19 ‘‘§ 1995. Duration and termination of coverage 

20 ‘‘Each policy purchased under this subchapter shall 

21 contain a provision, in terms approved by the Secretary, 

22 to the effect that any insurance thereunder on any mem23 ber of the uniformed services, unless discontinued upon 

24 the written request of the insured (or discontinued pursu25 ant to section 1996(a)(2)(B) of this title), shall continue 

26 in effect while the member is on active duty, active duty 
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1 for training, or inactive duty training scheduled in advance 

2 by competent authority during the period thereof, or while 

3 the member meets the qualifications set forth in subpara4 graph (B) or (C) of section 1965(5) of this title and such 

5 insurance shall cease as follows: 

6 ‘‘(1) With respect to a member on active duty 

7 or active duty for training under a call or order to 

8 duty that does not specify a period of less than 31 

9 days, insurance under this subchapter shall cease— 

10 ‘‘(A) at midnight, local time, on the date 

11 of separation or release from active duty or ac12 tive duty for training; or 

13 ‘‘(B) at the end of the thirty-first day of 

14 a continuous period of— 

15 ‘‘(i) absence without leave; 

16 ‘‘(ii) confinement by civil authorities 

17 under a sentence adjudged by a civilian 

18 court; or 

19 ‘‘(iii) confinement by military authori20 ties under a court-martial sentence involv21 ing total forfeiture of pay and allowances. 

22 Any insurance so terminated as the result of an ab23 sence or confinement referred to in subparagraph 

24 (B), together with any beneficiary designation in ef25 fect for such insurance at such termination thereof, 
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1 shall be automatically revived as of the date the 

2 member is restored to active duty with pay or to ac3 tive duty for training with pay. 

4 ‘‘(2) With respect to a member on active duty 

5 or active duty for training under a call or order to 

6 duty that specifies a period of less than 31 days, in7 surance under this subchapter shall cease at mid8 night, local time, on the last day of such duty. 

9 ‘‘(3) With respect to a member on inactive duty 

10 training scheduled in advance by competent author11 ity, insurance under this subchapter shall cease at 

12 the end of such scheduled training period. 

13 ‘‘(4) With respect to a member of the Ready 

14 Reserve of a uniformed service who meets the quali15 fications set forth in subparagraph (B) or (C) of 

16 section 1965(5) of this title, insurance under this 

17 subchapter shall at midnight, local time, on the date 

18 of separation or release from such assignment. 

19 ‘‘§ 1996. Premiums: deductions and payments; invest20 ment; expenses 

21 ‘‘(a) DEDUCTIONS AND PAYMENTS.—The provisions 

22 of subsection (a) of section 1969 of this title shall apply 

23 to Servicemembers’ Group Disability Insurance in the 

24 same manner as those provisions apply to 
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1 Servicemembers’ Group Life Insurance under that sub2 section. 

3 ‘‘(b) APPROPRIATIONS FOR PREMIUMS FOR EXTRA

4 HAZARD OF DUTY IN THE UNIFORMED SERVICES.—The 

5 provisions of subsection (b) of section 1969 of this title 

6 shall apply to Servicemembers’ Group Disability Insurance 

7 in the same manner as those provisions apply to 

8 Servicemembers’ Group Life Insurance under that sub9 section. 

10 ‘‘(c) ADVANCE ON APPROPRIATIONS.—The provisions 

11 of subsection (c) of section 1969 of this title shall apply 

12 to Servicemembers’ Group Disability Insurance in the 

13 same manner as those provisions apply to 

14 Servicemembers’ Group Life Insurance under that sub15 section. 

16 ‘‘(d) DEPOSITS TO REVOLVING FUND.—(1) The 

17 sums withheld from the basic or other pay of members, 

18 or collected from them by the Secretary concerned, under 

19 subsection (a) and the sums contributed from appropria20 tions under subsection (b) together with the income de21 rived from any dividends or premium rate adjustments re22 ceived from insurers shall be deposited to the credit of a 

23 revolving fund established in the Treasury of the United 

24 States. All premium payments and extra hazard costs on 

25 Servicemembers’ Group Disability Insurance and the ad-
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1 ministrative cost to the Department of insurance issued 

2 under this subchapter shall be paid from the revolving 

3 fund. 

4 ‘‘(2) The provisions of paragraphs (2) and (3) of sub5 section (d) of section 1969 of this title shall apply to 

6 Servicemembers’ Group Disability Insurance, and to the 

7 fund established under paragraph (1) of this subsection, 

8 in the same manner as those provisions apply to 

9 Servicemembers’ Group Life Insurance and the fund es10 tablished under paragraph (1) of that subsection (d). 

11 ‘‘(e) SECRETARY OF DEFENSE REGULATIONS.—The 

12 Secretary of Defense shall prescribe regulations for the 

13 administration of the functions of the Secretaries of the 

14 military departments under this section. Such regulations 

15 shall be subject to the second sentence of subsection (e) 

16 of section 1969 of this title. 

17 ‘‘(f) STATE TAXES.—The provisions of subsection (f) 

18 of section 1969 of this title shall apply to Servicemembers’ 

19 Group Disability Insurance in the same manner as those 

20 provisions apply to Servicemembers’ Group Life Insurance 

21 under that subsection. 

22 ‘‘§ 1997. Payment of insurance 

23 ‘‘(a) PAYMENT.—An amount of insurance under this 

24 subchapter in force on a member or former member on 

25 the date on which that person incurs a qualifying disability 
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1 shall be paid, upon the establishment of a valid claim 

2 therefor, to the member or former member. 

3 ‘‘(b) LUMP SUM PAYMENT.—A payment under sub4 section (a) shall be a lump sum payment in settlement 

5 of insurance under this subchapter. 

6 ‘‘(c) STATUS OF PAYMENT.—The provisions of sub7 section (c) of section 1970 of this title shall apply to a 

8 payment due or to become due under Servicemembers’ 

9 Group Disability Insurance in the same manner as those 

10 provisions apply to a payment due or to become due under 

11 Servicemembers’ Group Life Insurance under that sub12 section. 

13 ‘‘(d) PROHIBITION ON PAYMENT THAT WOULD ES14 CHEAT TO STATE.—The provisions of subsection (h) of 

15 section 1970 of this title shall apply to insurance payable 

16 under Servicemembers’ Group Disability Insurance in the 

17 same manner as those provisions apply to insurance pay18 able under Servicemembers’ Group Life Insurance under 

19 that subsection. 

20 ‘‘§ 1998. Premiums; readjustment of rates 

21 ‘‘(a) BASIC PREMIUM RATE FOR FIRST POLICY

22 YEAR.—Each policy purchased under section 1992 of this 

23 title shall include for the first policy year a basic premium 

24 rates which the Secretary shall have determined on a basis 

25 consistent with the lowest schedule of basic premium rates 
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1 generally charged for new group disability insurance poli2 cies issued to large employers. Each policy so purchased 

3 shall also include provisions whereby the basic rates of 

4 premium determined for the first policy year shall be con5 tinued for subsequent policy years, except that they may 

6 be readjusted for any subsequent year, based on the expe7 rience under the policy, such readjustment to be made by 

8 the insurance company or companies issuing the policy on 

9 a basis determined by the Secretary in advance of such 

10 year to be consistent with the general practice of disability 

11 insurance companies under policies of group disability in12 surance issued to large employers. 

13 ‘‘(b) TOTAL PREMIUM.—The total premiums for 

14 Servicemembers’ Group Disability Insurance shall be the 

15 sum of— 

16 ‘‘(1) the amounts computed according to sub17 section (a); and 

18 ‘‘(2) the estimated cost traceable to the extra 

19 hazard of active duty in the uniformed services as 

20 determined by the Secretary, with such estimated 

21 costs to be retroactively readjusted annually in ac22 cordance with section 1996(b) of this title. 

23 ‘‘(c) MAXIMUM EXPENSE AND RISK CHARGES.— 

24 Each policy purchased under section 1992 of this title 

25 shall contain a provision stipulating the maximum expense 
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1 and risk charges for the first policy year, which charges 

2 shall have been determined by the Secretary on a basis 

3 consistent with the general level of such charges made by 

4 disability insurance companies under policies of group dis5 ability insurance issued to large employers. Such max6 imum charges shall be continued from year to year, except 

7 that the Secretary may redetermine such maximum 

8 charges for any year either by agreement with the insur9 ance company or companies issuing the policy or upon 

10 written notice given by the Secretary to such companies 

11 at least one year in advance of the beginning of the year 

12 for which such redetermined maximum charges will be ef13 fective. 

14 ‘‘(d) ANNUAL ACCOUNTING.—Each policy under sec15 tion 1992 of this title shall provide for an accounting to 

16 the Secretary not later than 90 days after the end of each 

17 policy year. Each such accounting shall set forth, in a 

18 form approved by the Secretary, the following: 

19 ‘‘(1) The amounts of premiums actually accrued 

20 under the policy from its date of issue to the end of 

21 such policy year. 

22 ‘‘(2) The total of all claim charges incurred for 

23 that period. 

24 ‘‘(3) The amounts of the insurers’ expense and 

25 risk charge for that period. 
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1 ‘‘(e) SPECIAL CONTINGENCY RESERVE.—Any excess 

2 of the total of paragraph (1) of subsection (d) over the 

3 sum of paragraphs (2) and (3) of that subsection shall 

4 be held by the insurance company issuing the policy as 

5 a special contingency reserve to be used by such insurance 

6 company for charges under such policy only. Any such re7 serve shall bear interest at a rate to be determined in ad8 vance of each policy year by the insurance company 

9 issuing the policy, which rate shall be approved by the Sec10 retary as being consistent with the rates generally used 

11 by such company for similar funds held under other group 

12 disability insurance policies. 

13 ‘‘(f) CREDITS TO REVOLVING FUND.—If and when 

14 the Secretary determines that a special contingency re15 serve established under subsection (e) has attained an 

16 amount estimated by the Secretary to make satisfactory 

17 provision for adverse fluctuations in future charges under 

18 the policy, any further excess shall be deposited to the 

19 credit of the revolving fund established under section 

20 1996(d)(1) of this title. If and when such policy is discon21 tinued, and if after all charges have been made, there is 

22 a positive balance remaining in such special contingency 

23 reserve, such balance shall be deposited to the credit of 

24 the revolving fund, subject to the right of the insurance 

25 company or companies issuing the policy to make such de-
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1 posit in equal monthly installments over a period of not 

2 more than two years. 

3 ‘‘§ 1999. Other provisions 

4 ‘‘(a) BENEFIT CERTIFICATES.—The provisions of 

5 section 1972 of this title shall apply to members insured 

6 under Servicemembers’ Group Disability Insurance in the 

7 same manner as those provisions apply to a member in8 sured under Servicemembers’ Group Life Insurance under 

9 that section. 

10 ‘‘(b) FORFEITURE.—The provisions of the first sen11 tence of section 1973 of this title shall apply to 

12 Servicemembers’ Group Disability Insurance in the same 

13 manner as those provisions apply to Servicemembers’ 

14 Group Life Insurance under that section. 

15 ‘‘(c) JURISDICTION OF DISTRICT COURTS.—The pro16 visions of section 1975 of this title shall apply to 

17 Servicemembers’ Group Disability Insurance in the same 

18 manner as those provisions apply to Servicemembers’ 

19 Group Life Insurance under that section. 

20 ‘‘(d) REINSTATEMENT.—The provisions of section 

21 1978 of this title shall apply to Servicemembers’ Group 

22 Disability Insurance in the same manner as those provi23 sions apply to Servicemembers’ Group Life Insurance 

24 under that section. 
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1 ‘‘(e) INCONTESTABILITY.—Subject to subsection (b), 

2 insurance coverage granted under this subchapter shall be 

3 incontestable from the date of issue, reinstatement, or con4 version except for fraud or nonpayment of premium.’’. 

5 (b) EFFECTIVE DATE.—The insurance provided for 

6 in subchapter V of chapter 19 of title 38, United States 

7 Code, as added by subsection (a), and the deductions and 

8 contributions for that purpose under that subchapter, 

9 shall take effect on the date designated by the Secretary 

10 of Veterans Affairs, which date shall not be later than one 

11 year after the date of the enactment of this Act. The Sec12 retary shall publish a notice of such date in the Federal 

13 Register and shall submit to Congress notice in writing 

14 of such date. 

15 (c) CLERICAL AMENDMENT.—The table of sections 

16 at the beginning of such chapter is amended by adding 

17 at the end the following new items: 

‘‘SUBCHAPTER V—SERVICEMEMBERS’ GROUP DISABILITY INSURANCE

‘‘1991. Definitions; program name. 

‘‘1992. Program authority; eligible insurance companies. 

‘‘1993. Persons insured; amount. 

‘‘1994. Qualifying disabilities. 

‘‘1995. Duration and termination of coverage. 

‘‘1996. Premiums: deductions and payments; investment; expenses. 

‘‘1997. Payment of insurance. 

‘‘1998. Premiums; readjustment of rates. 

‘‘1999. Other provisions.’’. 

Æ