Federal Register Extracts

Agency: "Department of Veterans Affairs."

SUMMARY: The Department of Veterans Affairs (VA) is amending its regulations that govern National Service Life Insurance (NSLI), among other things, to accomplish the following: implement provisions contained in legislation that authorized a new program of insurance; clarify which individuals are eligible to take actions on an insurance policy; explain various provisions regarding coverage and benefits under the new insurance program; and state which individuals are ineligible to benefit from the unlawful and wrongful killing of a veteran policyholder.

DATES: This final rule is effective January 3, 2023.

FOR FURTHER INFORMATION CONTACT: Paul Weaver, Insurance Specialist, 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: On July 14, 2022, VA published a proposed rulemaking in the Federal Register pertaining to the implementation of a new program of life insurance that will begin issuing policies on January 1, 2023. (87 FR 42118). VA provided the public with a 60-day comment period which closed on September 12, 2022. VA did not receive any comments from the public. Based on the rationale set forth in the Federal Register, VA adopts the proposed rule, without change, as a final rule.

Executive Orders 12866 and 13563

Executive Orders (E.O.) 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). E.O. 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 final rule is not a significant regulatory action under E.O. 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 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 would generally be small business neutral as it implements statutory provisions that only allow the United States to issue life insurance coverage to veterans with service-connected disabilities. 38 U.S.C. 1922B(a)(1) ("[T]he Secretary shall carry out a service-disabled veterans insurance program under which a veteran is granted insurance by the United States against the death of such individual occurring while such insurance is in force."). Although there are statutes in 38 U.S.C. 1901-1988 that allow VA to purchase a large group life insurance policy from a private commercial insurer, those statutory authorities only apply to the Servicemembers' Group Life Insurance Program, which provides life insurance coverage to Service members and their dependents and former Service members, and they do not provide VA with the authority to purchase a group life insurance policy from a private insurer for purposes of providing VALife coverage. As such, the overall impact of this final rule would be of no benefit or detriment to small businesses, because these insurance policies would only be issued by the United States to veterans with service-connected disabilities. 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 final rule would have no such effect on State, local, and tribal governments, or on the private sector.

Paperwork Reduction Act

This final rule includes provisions constituting new collections of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) that require approval by the Office of Management and Budget (OMB). Accordingly, under 44 U.S.C. 3507(d), VA has submitted a copy of this rulemaking action to OMB for review and approval. OMB has reviewed and approved the new collections of information and assigned OMB Control Numbers 2900-0906 and 2900-0918. When VA published the notice of proposed rulemaking in the Federal Register, we identified a third form that we proposed to utilize to collect information from the public to permit an individual to confirm their surrender of any current SDVI coverage at the time they apply for VALife. However, we have incorporated this collection of information into the form that will also be used by VA to reinstate a VALife policy or to complete a insured's request to surrender coverage under VALife and is assigned OMB Control Number 2900-0918.

Assistance Listing

The Assistance Listing number and title for the program affected by this document is 64.103, Life Insurance for Veterans.

Congressional Review Act

Pursuant to 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).

List of Subjects in 38 CFR Part 8 Life insurance, Veterans.

Signing Authority

Denis McDonough, Secretary of Veterans Affairs, approved this document on November 16, 2022, 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 General Counsel, Department of Veterans Affairs.

For the reasons stated in the preamble, the Department of Veterans Affairs amends 38 CFR part 8 as set forth below:

PART 8--NATIONAL SERVICE LIFE INSURANCE

1. The authority citation for part 8 continues to read as follows:

Authority:38 U.S.C. 501, 1901-1929, 1981-1988.

2. Amend SEC 8.0 by:

a. Revising paragraph (e); and

b. Adding paragraphs (f), (g), and (h).

The revision and additions read as follows:

SEC 8.0 Definitions of terms used in connection with title 38 CFR, part 8, National Service Life Insurance.

*****

(e) What does the term "guardian" mean? The term guardian means any state-appointed guardian or conservator, attorney-in-fact, or VA-appointed fiduciary, as defined in SEC 13.20, who is responsible for receiving VA benefits in a fiduciary capacity on behalf of the insured or the beneficiary, or to take the actions listed in SEC 8.32.

Note 1 to paragraph (e): If a VA-appointed fiduciary and either a state-appointed guardian/conservator or attorney-in-fact are not the same individual and both attempt to take conflicting actions on an incompetent insured's policy, the VA-appointed fiduciary shall have the exclusive authority to take actions on the policy.

(f) What does the term "Veterans' Affairs Life Insurance (VALife)" mean? The term Veterans' Affairs Life Insurance, or VALife in its abbreviated form, means a policy of insurance that is issued under section 1922B of title 38 U.S.C.

(g) What does the term "application for VALife" mean? The term application for VALife means a properly completed application form submitted online or through another medium prescribed by the Secretary.

(h) What does the term "beneficiary" mean? The term "beneficiary" means a principal or contingent beneficiary designated by the insured.

3. Amend SEC 8.1 by:

a. Revising the section heading and paragraph (a);

b. In paragraph (b), adding Note 3;

c. In paragraph (c) introductory text, removing the word "Yes," and adding in its place "For insurance other than VALife,".

The revision and addition read as follows:

SEC 8.1 Effective date for an insurance policy issued under section 1922(a) or 1922B of title 38 U.S.C.

(a) What is the effective date of the policy? The effective date is the date policy coverage begins. Benefits due under a policy issued under section 1922(a) are payable any time after the effective date. Benefits due under a policy issued under section 1922B are payable any time two years after the effective date.

(b) * * *

Note 3 to paragraph (b):If you apply for insurance coverage through an electronic medium, the date of delivery of the premium payment will be the date you authorize payment of the initial premium. In cases where the authorization does not result in the required premium payment because there were insufficient funds to cover the full initial premium, the delivery date of the premium payment will be the date your full initial premium is received by VA.

*****

4. Amend SEC 8.2 by adding paragraph (e) to read as follows:

SEC 8.2 Payment of premiums.

*****

(e) What happens if a policyholder enrolled in VALife dies, surrenders or cancels coverage during the two-year enrollment period? If a policyholder enrolls in VALife for an amount less than the statutory maximum and elects to apply for additional coverage at a later date and dies before completing the two-year waiting period for the additional VALife coverage amount, the beneficiary shall be refunded premiums that were paid for the additional VALife coverage, plus interest, in accordance with 38 U.S.C. 1922B(c)(3)(A). If a policyholder surrenders or cancels a VALife policy during the two-year waiting period imposed by 38 U.S.C. 1922B(c)(2) before coverage is in force, the United States shall not return to the policyholder the premiums that were paid to purchase the coverage.

5. Revise SEC 8.6 to read as follows:

SEC 8.6 Calculation of Time Period; Veteran's Age.

--This is a summary of a Federal Register article originally published on the page number listed below--

Final rule.

CFR Part: "38 CFR Part 8"

RIN Number: "RIN 2900-AR53"

Citation: "87 FR 73652"

Federal Register Page Number: "73652"

"Rules and Regulations"