[Federal Register Volume 61, Number 111 (Friday, June 7, 1996)]
[Rules and Regulations]
[Pages 29024-29025]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14368]



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DEPARTMENT OF VETERANS AFFAIRS
38 CFR Part 6

RIN 2900-AH52


United States Government Life Insurance

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This document amends the Department of Veterans Affairs (VA) 
regulations relating to United States Government Life Insurance 
(USGLI). It deletes provisions that have become obsolete. It also 
deletes provisions contained in insurance policies that consist of 
material not required to be published in the Federal Register. 
Additionally, it deletes restatements of statute and makes changes for 
purposes of clarity.

EFFECTIVE DATE: June 7, 1996.

FOR FURTHER INFORMATION CONTACT: George Poole, Chief, Insurance Program 
Administration, Department of Veterans Affairs Regional Office and 
Insurance Center, PO Box 8079, Philadelphia, PA 19101, (215) 951-5718.

SUPPLEMENTARY INFORMATION: With the enactment of the National Service 
Life Insurance Act of 1940, as amended, issuance of USGLI policies 
ceased in April, 1951. Additionally, all USGLI policies were declared 
paid-up effective January 1, 1983. Furthermore, all USGLI term policies 
were converted to Ordinary Life policies in May, 1993. Consequently, 
regulations pertaining to issuance, premium payments (other than being 
declared paid-up), reinstatements of lapsed policies, or term policies 
are obsolete and are eliminated accordingly. It also deletes provisions 
contained in insurance policies that consist of material not required 
to be published in the Federal Register. Additionally, it deletes 
restatements of statute and makes changes for purposes of clarity.
    This final rule consists of nonsubstantive changes and, therefore, 
is not subject to the notice-and-comment and effective-date provisions 
of 5 U.S.C. 553.
    The Secretary of Veterans Affairs hereby certifies that this 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. This final rule will not affect any 
entity since it does not contain any substantive provisions. Therefore, 
pursuant to 5 U.S.C. 605(b), this amendment is exempt from the initial 
and final regulatory flexibility analysis requirements of sections 603 
and 604.
    The Catalog of Federal Domestic Assistance Program number for these 
regulations is 64.103.

List of Subjects in 38 CFR Part 6

    Life insurance, Military personnel, Veterans.

    Approved: May 31, 1996.
Jesse Brown,
Secretary of Veterans Affairs.

    For the reasons set forth in the preamble, 38 CFR part 6 is amended 
as set forth below:

PART 6--UNITED STATES GOVERNMENT LIFE INSURANCE

    1. The authority citation for part 6 is revised to read as follows:

    Authority: 38 U.S.C. 501, 1940-1963, 1981-1988, unless otherwise 
noted.

    2. The undesignated center headings preceding Secs. 6.2, 6.3, 6.7, 
6.31, 6.46, 6.47, 6.78, 6.90, 6.106, 6.111, 6.150, 6.153, 6.155, 6.159, 
6.170, 6.186 and 6.202 are removed.


Secs. 6.2 through 6.7, 6.16 through 6.40, 6.46 through 6.53, 6.56, 
6.57, 6.63, 6.67, 6.69 through 6.92, 6.101 through 6.111, 6.116, 6.120 
through 6.121, 6.123 through 6.123c, 6.125, 6.126, 6.128 through 6.186, 
6.192 through 6.210  [Removed]

    3. In part 6, the following sections are removed:

a. Sections 6.2 through 6.7;
b. Sections 6.16 through 6.40;
c. Sections 6.46 through 6.53;
d. Section 6.56;
e. Section 6.57;
f. Section 6.63;
g. Section 6.67;
h. Sections 6.69 through 6.92;
i. Sections 6.101 through 6.111;
j. Section 6.116;
k. Sections 6.120 through 6.121;
l. Sections 6.123 through 6.123c;
m. Section 6.125;
n. Section 6.126;
o. Sections 6.128 through 6.186; and
p. Sections 6.192 through 6.210.


Secs. 6.12, 6.13, 6.45, 6.55, 6.58, 6.60, 6.62, 6.64, 6.65, 6.68, 6.95, 
6.96, 6.100, 6.115, 6.117, 6.117a, 6.119, 6.122, 6.127, 6.191, 
6.211  [Redesignated as Secs. 6.1 through 6.21]

    4. Part 6 is amended by redesignating the following sections as set 
forth below:

------------------------------------------------------------------------
             Old section                          New section           
------------------------------------------------------------------------
6.12.................................                     6.1           
6.13.................................                     6.2           
6.45.................................                     6.3           
6.55.................................                     6.4           
6.58.................................                     6.5           
6.60.................................                     6.6           
6.62.................................                     6.7           
6.64.................................                     6.8           

[[Page 29025]]

                                                                        
6.65.................................                     6.9           
6.68.................................                     6.10          
6.95.................................                     6.11          
6.96.................................                     6.12          
6.100................................                     6.13          
6.115................................                     6.14          
6.117................................                     6.15          
6.117a...............................                     6.16          
6.119................................                     6.17          
6.122................................                     6.18          
6.127................................                     6.19          
6.191................................                     6.20          
6.211................................                     6.21          
------------------------------------------------------------------------




Sec. 6.2  [Amended]

    5. In newly redesignated Sec. 6.2, the first sentence is removed.


Sec. 6.3  [Amended]

    6. In newly redesignated Sec. 6.3, paragraph (a) is removed and the 
paragraph designation (b) is removed.


Sec. 6.4  [Amended]

    7. Newly redesignated Sec. 6.4 is amended by removing 
``Secs. 3.1(j), 3.204, 3.205 (a) and (b) and 3.209 of `` and adding, in 
its place, ``38 U.S.C. 103(c) and Part 3''.


Sec. 6.7  [Amended]

    8. In newly redesignated Sec. 6.7, paragraphs (a), (b) and (c) are 
removed; and paragraph (d) is redesignated as paragraph (a); newly 
redesignated Sec. 6.7 is further amended by revising the section 
heading and by adding a new paragraph (b) to read as follows:


Sec. 6.7  Claims of creditors, taxation.

* * * * *
    (b) The provisions of 38 U.S.C. 5301(b) which entitle the United 
States to collect by setoff out of benefits payable to any beneficiary 
under a United States Government life insurance policy do not apply to 
dividends being held to the credit of the insured for the payment of 
premiums under the provisions of section 1946 of title 38 U.S.C.
* * * * *
    9. Newly redesignated Sec. 6.8 is revised to read as follows:


Sec. 6.8  Selection, revocation and election.

    The insured under a United States Government Life Insurance policy 
may, upon written notice, select an optional settlement. Such optional 
settlement may be revoked by written notice. If the insured does not 
select one of the optional settlements, as set out under the provisions 
of the policy, the insurance shall be payable in 240 monthly 
installments unless the beneficiary elects in writing a different 
option.


Sec. 6.9  [Amended]

    10. In newly redesignated Sec. 6.9, the first sentence of the 
introductory text is removed.
    11. Newly redesignated Sec. 6.10 is revised to read as follows:


Sec. 6.10  Options.

    Insurance will be payable in one sum only when selected by the 
insured during his or her lifetime or by his or her last will and 
testament.
    12. In newly redesignated Sec. 6.11, paragraph (d) and the first 
sentence of paragraph (a) are removed; paragraphs (e) and (f) are 
redesignated as paragraphs (d) and (e), respectively. Newly 
redesignated paragraph (d) is amended by removing ``as provided in 
paragraph (f) of this section'', and by removing ``in Sec. 6.62'' and 
adding, in its place, ``in Sec. 6.7''. Newly redesignated Sec. 6.11 is 
further amended by revising the section heading, paragraph (b) and 
newly redesignated paragraph (e) to read as follows:


Sec. 6.11  How dividends are paid.

* * * * *
    (b) If the insured has a National Service Life Insurance policy or 
policies in force, dividends used to pay premiums in advance will be 
held to the credit of the insured, unless otherwise directed by the 
insured.
* * * * *
    (e) Dividend credit of the insured held for payment of premiums or 
dividends left to accumulate on deposit may be applied to the payment 
of premiums in advance on any National Service Life Insurance policy 
upon written request of the insured made before default in payment of 
premium. Upon maturity of the policy, any unpaid dividend will be paid 
to the person(s) currently entitled to receive payments under the 
policy.
    13. In newly redesignated Sec. 6.13, the section heading is revised 
to read as follows:


Sec. 6.13  Policy loans.

* * * * *


Sec. 614  [Amended]

    14. In newly redesignated Sec. 6.14, the seventh and eight 
sentences are removed; the section heading is amended by removing ``5-
year level premium term policy and''; the first sentence is amended by 
removing ``the 5-year level premium term or''; the second sentence is 
amended by removing ``at the end of the first policy year and at the 
end of any policy year thereafter'', and the fourth sentence is amended 
by removing ``provided the policy has been in force for at least 1 
year''.
    15. Newly redesignated Sec. 6.16 is revised to read as follows:


Sec. 6.16  Payment of cash value in monthly installments.

    Effective January 1, 1971, in lieu of payment of cash value in one 
sum, the insured may elect to receive payment in monthly installments 
under option 2 as set forth in the insurance contract or as a refund 
life income option. If the insured dies before the agreed number of 
monthly installments have been paid, the remaining unpaid monthly 
installments will be payable to the designated beneficiary in one sum, 
unless the insured or such beneficiary has elected to continue the 
installments under the option selected by the insured. If no designated 
beneficiary survives, the present value of any remaining unpaid 
installments shall be paid to the estate of the insured, provided such 
payment would not escheat.
    16. Newly redesignated Sec. 6.18 is revised to read as follows:


Sec. 6.18  Other disabilities deemed to be total and permanent.

    (a) In addition to the conditions specified in 38 U.S.C. 1958, the 
following also will be deemed to be total and permanent disabilities: 
Organic loss of speech; permanently helpless or permanently bedridden.
    (b) Organic loss of speech will mean the loss of the ability to 
express oneself, both by voice and whisper, through the normal organs 
of speech if such loss is caused by organic changes in such organs. 
Where such loss exists, the fact that some speech can be produced 
through the use of an artificial appliance or other organs of the body 
will be disregarded.


Sec. 6.19  [Amended]

    17. Newly redesignated Sec. 6.19 is amended by removing 
``Secs. 3.204, 3.211 and 3.212'' and adding, in its place, ``Part 3''.

[FR Doc. 96-14368 Filed 6-6-96; 8:45 am]
BILLING CODE 8320-01-P