[Federal Register Volume 86, Number 109 (Wednesday, June 9, 2021)]
[Rules and Regulations]
[Pages 30541-30543]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-12017]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 9

RIN 2900-AR24


Extension of Veterans' Group Life Insurance (VGLI) Application 
Periods in Response to the COVID-19 Public Health Emergency

AGENCY: Department of Veterans Affairs.

ACTION: Interim final rule.

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SUMMARY: The Department of Veterans Affairs (VA) is issuing this 
interim final rule to extend the deadline for former members insured 
under Servicemembers' Group Life Insurance (SGLI) to apply for VGLI 
coverage following separation from service in order to address the 
inability of former members directly or indirectly affected by the 2019 
Novel Coronavirus (COVID-19) public health emergency to purchase VGLI. 
This rule will be in effect until December 11, 2021.

DATES: This interim final rule is effective June 9, 2021.
    Comment date: Comments must be received on or before July 9, 2021.

ADDRESSES: Comments may be submitted through www.Regulations.gov or 
mailed to Director, VA Insurance Service (29), 5000 Wissahickon Avenue, 
Philadelphia, PA 19144. Please note that due to circumstances 
associated with the COVID-19 pandemic, VA discourages the submission of 
comments by mail. Comments should indicate that they are submitted in 
response to ``RIN 2900-AR24 Interim Final Rule--Extension of VGLI 
Application Periods in Response to the COVID-19 Public Health 
Emergency.'' Comments received will be available at regulations.gov for 
public viewing, inspection or copies.

FOR FURTHER INFORMATION CONTACT: Paul Weaver, Department of Veterans 
Affairs Insurance Service (310/290B), 5000 Wissahickon Avenue, 
Philadelphia, PA 19144, (215) 842-2000, ext. 4263. (This is not a toll-
free number.)

SUPPLEMENTARY INFORMATION: Section 1977 of title 38, United States 
Code, authorizes the VGLI program, which provides former members 
separating from service with the option of converting existing SGLI 
coverage into renewable, 5-year term group life insurance coverage in 
amounts ranging from $10,000 to $400,000 based upon the amount of SGLI 
coverage. See 38 U.S.C. 1967(a), 1968(b)(1)(A), 1977(a), (b). Section 
9.2 of title 38, Code of Federal Regulations, provides the effective 
dates of VGLI coverage and application requirements. VGLI coverage may 
be granted if an application, the initial premium, and evidence of 
insurability are received within 1 year and 120 days following 
termination of duty. 38 CFR 9.2(c). Evidence of insurability is not 
required during the initial 240 days following termination of duty. Id.
    On October 7, 2020, VA published a final rule in the Federal 
Register (85 FR 63208) that amended 38 CFR 9.2 by adding new paragraph 
(f)(1) to extend by 90 days the time periods under 38 CFR 9.2(c) during 
which former members may apply for VGLI. Thus, former members who 
submit a VGLI application and the initial premium within 330 days 
following separation from service will not be required to submit 
evidence of insurability. Former members who do not apply for VGLI 
within 330 days following separation from service may still receive 
VGLI coverage if they apply for the coverage within 1 year and 210 days 
following separation from service and submit the initial premium and 
evidence of insurability. The 90-day extensions for former members to 
apply for VGLI are in effect from June 11, 2020, through June 11, 2021. 
Between June 11, 2020 and March 31, 2021, 14,855 former members 
utilized these 90-day extensions to purchase VGLI coverage.
    The rationale for applying the rule for one year was that VA is 
obligated to manage VGLI according to sound and accepted actuarial 
principles (see 38 U.S.C. 1977(c), (f), (g)), and that VA would be able 
to utilize this one-year time period to gather and analyze data on VGLI 
claims experience to determine if it would be actuarially sound to 
further extend the applicability date. VGLI is funded by premiums from 
insured Veterans, and VA has determined that current premium amounts 
that insured Veterans pay for VGLI coverage are sufficient to absorb 
the cost of any additional VGLI claims that would be paid due to VA 
extending that application deadline period for an additional six 
months. Considering the continuing challenges involved with obtaining 
necessary medical records brought about by the COVID-19 pandemic, and 
that VA has determined that it would be actuarially sound to extend 
VGLI application deadlines, VA will be extending the deadline for VGLI 
applications received between June 12, 2021 and December 11, 2021. This 
interim final rulemaking will continue to provide separating service 
members an additional 90 days to apply for VGLI during the COVID-19 
pandemic and is intended to ease some of the financial consequences of 
the COVID-19

[[Page 30542]]

pandemic for former members, especially those with disabilities 
incurred while in service, since many of these former members would 
otherwise not qualify for a private commercial plan of insurance due to 
such disabilities.

Administrative Procedure Act

    The Secretary of Veterans Affairs finds that there is good cause to 
dispense with the opportunity for prior comment with respect to this 
rule and to make the rule effective upon publication. Pursuant to 5 
U.S.C. 553(b)(B), the opportunity for advance public comment is not 
required with respect to a rulemaking when an ``agency for good cause 
finds (and incorporates the finding and a brief statement of reasons 
therefor in the rules issued) that notice and public procedure thereon 
are impracticable, unnecessary, or contrary to the public interest.''
    VA previously published an interim final rule on June 11, 2020 
which expires on June 11, 2021. In this interim final rulemaking, we 
are extending the prior rulemaking by an additional six months. If the 
interim final rulemaking is not published prior to the expiration date, 
then there will be a gap in the application deadline extensions for 
those individuals applying for VGLI.
    The need for this interim final rule was unanticipated because the 
data pertaining to COVID-19 was continuously evolving and VA had to 
evaluate data from an actuarial perspective to ensure that another 
extension of the application deadlines would not put upward pressure on 
VGLI premiums or otherwise negatively impact the financial stability of 
the program. The Secretary finds that it is impracticable to delay this 
regulation for the purpose of soliciting public comment because former 
members cannot receive VGLI coverage if they do not satisfy the 
application requirements within the deadlines established by 38 CFR 
9.2(c). The VGLI statute does not authorize retroactive adjudication of 
applications for VGLI coverage, and former members who wish to apply 
for VGLI would be significantly harmed if these extensions lapse, since 
many former members choose to purchase VGLI because these former 
members are unable to qualify for private commercial plans of insurance 
coverage due to disabilities incurred while in service. Section 553(d) 
also requires a 30-day delayed effective date following publication of 
a rule, except for ``(1) a substantive rule which grants or recognizes 
an exemption or relieves a restriction; (2) interpretative rules and 
statements of policy; or (3) as otherwise provided by the agency for 
good cause found and published with the rule.'' Pursuant to section 
553(d)(1), the Secretary finds that this interim final rule should be 
effective immediately upon publication because this is a substantive 
rule which relieves restrictions, i.e., extends deadlines for VGLI 
applications. Also, pursuant to section 553(d)(3), the Secretary finds 
that there is good cause to make the rule effective upon publication 
because of the impracticability of delaying implementation of the 
regulatory amendment, as discussed above.
    For the foregoing reasons, the Secretary of Veterans Affairs is 
issuing this rule as an interim final rule with an immediate effective 
date. The Secretary of Veterans Affairs will consider and address 
comments that are received within 30 days of the date this interim 
final rule is published in the Federal Register.

Executive Orders 12866 and 13563

    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. 
The Office of Information and Regulatory Affairs has determined that 
this rule is not a significant regulatory action under Executive Order 
12866. The Regulatory Impact Analysis associated with this rulemaking 
can be found as a supporting document at www.regulations.gov.

Regulatory Flexibility Act

    The Secretary hereby certifies that this interim final rule will 
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. The provisions contained in this interim final 
rulemaking are applicable to individual Veterans, and applications for 
VGLI, as submitted by such individuals, are specifically managed and 
processed within VA and through Prudential Insurance Company of 
America, which is not considered to be a small entity. Therefore, 
pursuant to 5 U.S.C. 605(b), the initial and final regulatory 
flexibility analysis requirements of 5 U.S.C. 603 and 604 do not apply.

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 interim final rule will have no such 
effect on State, local, and tribal governments, or on the private 
sector.

Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as not a major rule, as defined by 5 U.S.C. 804(2).

Paperwork Reduction Act

    This interim final rule contains no provisions constituting a 
collection of information under the Paperwork Reduction Act of 1995 (44 
U.S.C. 3501-3521).

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance number and title for the 
program 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

    Denis McDonough, Secretary of Veterans Affairs, approved this 
document on May 24, 2021, 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.

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 set forth below:

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.


[[Page 30543]]



0
2. Section 9.2 is amended by revising paragraph (f)(2) to read as 
follows:


Sec.  9.2  Effective date; applications

* * * * *
    (f) * * *
    (2) Paragraph (f)(1) of this section shall not apply to an 
application or initial premium received after December 11, 2021.

[FR Doc. 2021-12017 Filed 6-8-21; 8:45 am]
BILLING CODE 8320-01-P