[Federal Register Volume 77, Number 122 (Monday, June 25, 2012)]
[Proposed Rules]
[Pages 37839-37841]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-15420]
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DEPARTMENT OF VETERANS AFFAIRS
38 CFR Part 9
RIN 2900-AO24
Veterans' Group Life Insurance (VGLI) No-Health Period Extension
AGENCY: Department of Veterans Affairs.
ACTION: Proposed rule.
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SUMMARY: The Department of Veterans Affairs (VA) proposes to amend its
regulations governing eligibility for Veterans' Group Life Insurance
(VGLI) to extend to 240 days the current 120-day ``no-health'' period
during which veterans can apply for VGLI without proving that they are
in good health for insurance purposes. The purpose of this proposed
rule is to increase the opportunities for disabled veterans to enroll
in VGLI, some of who would not qualify for VGLI coverage under existing
provisions.
DATES: Comments must be received by VA on or before July 25, 2012.
ADDRESSES: Written comments may be submitted through http://www.Regulations.gov; by mail or hand delivery to Director, Regulations
Management (02REG), Department of Veterans Affairs, 810 Vermont Ave.
NW., Room 1068, Washington, DC 20420; or by fax to (202) 273-9026.
Comments should indicate that they are submitted in response to ``RIN
2900-AO24--Veterans' Group Life Insurance (VGLI) No-Health Period
Extension.'' Copies of comments received will be available for public
inspection in the Office of Regulation Policy and Management, Room
1063B, between the hours of 8 a.m. and 4:30 p.m., Monday through Friday
(except holidays). Please call (202) 461-4902 for an appointment. (This
is not a toll-free number.) In addition, during the comment period,
comments may be viewed online through the Federal Docket Management
System (FDMS) at http://www.Regulations.gov.
FOR FURTHER INFORMATION CONTACT: Monica Keitt, Attorney/Advisor,
Department of Veterans Affairs Regional Office and Insurance Center
(310/290B), 5000 Wissahickon Avenue, P.O. Box
[[Page 37840]]
8079, Philadelphia, PA 19101, (215) 842-2000, ext. 2905. (This is not a
toll-free number.)
SUPPLEMENTARY INFORMATION: The Secretary of Veterans Affairs has
authority to prescribe regulations that are necessary or appropriate to
carry out the laws administered by VA and that are consistent with
those laws. 38 U.S.C. 501(a). Section 1977 of title 38, United States
Code, authorizes the Veterans' Group Life Insurance (VGLI) program,
which provides servicemembers separating from service with the option
of converting existing Servicemembers' Group Life Insurance (SGLI)
coverage into renewable, 5-year term group life insurance coverage. 38
U.S.C. 1968(b)(1)(A); see 38 U.S.C. 1977(b). Furthermore, section
1977(b)(5) authorizes VA to impose reasonable and practicable terms and
conditions on the provision of VGLI. VA has exercised that authority by
providing, in 38 CFR 9.2(b), effective dates of VGLI coverage, provided
that the administrative office has received an application and the
initial premium within certain specified periods, usually within 120
days following termination of duty.
Section 9.2(c) provides an exception to the imposition of those
limitation periods. If either an application or the initial premium has
not been received by the administrative office within the applicable
period specified in Sec. 9.2(b), VGLI coverage may still be granted if
the administrative office receives an application, the initial premium,
and ``evidence of insurability'' within 1 year and 120 days following
termination of duty. Thus, evidence of insurability is not required if
a veteran submits to the administrative office an application and the
initial premium within the period required by Sec. 9.2(b), but
evidence of insurability is required if a veteran utilizes the 1-year
grace period provided by Sec. 9.2(c). This proposed rule would extend
the period during which no evidence of insurability is needed from 120
days to 240 days.
VA proposes to amend Sec. 9.2(c) to extend the ``no-health''
period during which veterans can apply for VGLI without the need to
provide ``evidence of insurability'' demonstrating good health that is
normally necessary to obtain life insurance. Under Sec. 9.2(c), a
veteran has an eligibility period of ``1 year and 120 days following
termination of duty'' to apply for VGLI. Currently, during the initial
120 days following termination of duty, veterans can qualify for VGLI
without the need to prove that they are ``insurable.'' This proposed
rule would extend the VGLI ``no-health'' period from 120 days to 240
days; it would make no change to the 1 year and 120-day VGLI
eligibility period following termination of duty except to extend the
period during which no evidence of insurability is needed.
VA is proposing to extend the 120-day ``no-health'' period to 240
days to increase the opportunity for disabled veterans to apply for
VGLI. VA has found that during the initial 120-day adjustment period
following termination of duty, many veterans have not had time to
assess their life insurance needs. An expanded ``no-health'' period
would also provide VA Insurance outreach services with an increased
opportunity to discuss insurance coverage with these veterans while
they are still in the ``no-health'' period. By amending Sec. 9.2(c),
VA would ensure that veterans with service-connected disabilities have
ample opportunity to provide life insurance protection for their
families and loved ones.
In addition to changes made to the length of the ``no-health''
period, this amendment of Sec. 9.2(c) would also include removal of
the words ``Servicemembers' Group Life Insurance or,'' which refers to
Retired Reservist SGLI, which was discontinued by Public Law 104-275 as
an independent program on October 9, 1996, because the program was
merged into the VGLI program and extended VGLI to members of the Ready
Reserves. As a result, reference to SGLI in Sec. 9.2(c) is no longer
applicable.
Finally, VA is proposing to amend Sec. 9.2 by revising the
authority citation that follows Sec. 9.2(b)(4) to read ``(Authority:
38 U.S.C. 1977)'' instead of ``(Authority: 38 U.S.C. 1977(e)).'' This
amendment will reflect the proper legal authority under which VGLI
provisions apply, as it relates to this regulation, instead of just
paragraph (e), which is not broad enough to provide the proper
authority for VGLI provisions provided under Sec. 9.2.
VA estimates that there would be no additional costs to the
Government as a result of this proposed rule. We anticipate that the
final rule will be effective in early fall 2012, and apply to veterans
released from service on or after the effective date.
Comment Period
Although under the rulemaking guidelines in Executive Order 12866,
VA ordinarily provides a 60-day comment period, the Secretary has
determined that there is good cause to limit the public comment period
on this proposed rule to 30 days. VA does not expect to receive a large
number of comments on this proposed rule, particularly comments that
are negative or that oppose this rule, because this rule would increase
the opportunity for veterans to obtain valuable insurance coverage that
is needed to help ensure financial security for their families, while
placing no additional burdens on veterans or their families. Lastly, VA
believes that implementation of this regulation is particularly urgent
because by extending the VGLI ``no-health'' eligibility period, it will
enable some of the most disabled veterans to obtain insurance coverage
when eligibility for commercial insurance is not possible due to their
disabilities. The 30-day review and comment period will not result in
any additional cost or cause any negative impacts on the program, but
will make the extended ``no-health'' period available to disabled
veterans sooner. Accordingly, the Secretary has determined that it is
unnecessary, impracticable, and contrary to the public interest to
provide for a longer comment period, and VA has provided that comments
must be received within 30 days of publication in the Federal Register.
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 an 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 year. This proposed rule would have no such effect on
State, local, and tribal governments or on the private sector.
Paperwork Reduction Act
This proposed rule contains no provisions constituting a collection
of information under the Paperwork Reduction Act (44 U.S.C. 3501-3521).
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.
Executive Order 12866 (Regulatory Planning and Review) defines a
``significant
[[Page 37841]]
regulatory action,'' which requires review by the Office of Management
and Budget (OMB), as ``any regulatory action that is likely to result
in a rule that may: (1) Have an annual effect on the economy of $100
million or more or adversely affect in a material way the economy, a
sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, or tribal
governments or communities; (2) Create a serious inconsistency or
otherwise interfere with an action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements, grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or (4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
this Executive Order.''
The economic, interagency, budgetary, legal, and policy
implications of this regulatory action have been examined and it has
been determined not to be a significant regulatory action under
Executive Order 12866.
Regulatory Flexibility Act
The Secretary of Veterans Affairs hereby certifies that this
proposed rule would 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 proposed rule would
directly affect only individuals and will not directly affect any small
entities. Therefore, pursuant to 5 U.S.C. 605(b), this proposed rule is
exempt from the initial and final regulatory flexibility analysis
requirements of sections 603 and 604.
Catalog of Federal Domestic Assistance Number and Title
The Catalog of Federal Domestic Assistance number and title for the
program affected by this document is 64.103, Life Insurance for
Veterans.
Signing Authority
The Secretary of Veterans Affairs, or designee, approved this
document 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. John R.
Gingrich, Chief of Staff, Department of Veterans Affairs, approved this
document on June 20, 2012, for publication.
List of Subjects in 38 CFR Part 9
Life insurance, Military personnel, Veterans.
Dated: June 20, 2012.
Robert C. McFetridge,
Director, Office of Regulation Policy and Management, Office of the
General Counsel, Department of Veterans Affairs.
For the reasons stated in the preamble, the Department of Veterans
Affairs proposes to amend 38 CFR part 9 as follows:
PART 9--SERVICEMEMBERS' GROUP LIFE INSURANCE AND VETERANS' GROUP
LIFE INSURANCE
1. The authority citation for part 9 continues to read as follows:
Authority: 38 U.S.C. 501, 1965-1980A, unless otherwise noted.
2. Amend Sec. 9.2 by:
a. Revising the authority citation at the end of paragraph (b).
b. Revising paragraph (c).
c. Adding an authority citation at the end of the section.
The revisions and addition read as follows:
Sec. 9.2 Effective date; applications.
* * * * *
(b) * * *
(Authority: 38 U.S.C. 1977)
(c) If either an application or the initial premium has not been
received by the administrative office within the time limits set forth
above, Veterans' Group Life Insurance coverage may still be granted if
an application, the initial premium, and evidence of insurability are
received by the administrative office within 1 year and 120 days
following termination of duty, except that evidence of insurability is
not required during the initial 240 days following termination of duty.
* * * * *
(Authority: 38 U.S.C. 501, 1967, 1968, 1977)
[FR Doc. 2012-15420 Filed 6-22-12; 8:45 am]
BILLING CODE 8320-01-P