[Federal Register Volume 77, Number 192 (Wednesday, October 3, 2012)]
[Rules and Regulations]
[Pages 60304-60307]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-24391]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 9

RIN 2900-AN40


Servicemembers' Group Life Insurance and Veterans' Group Life 
Insurance--Slayer's Rule Exclusion

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: The Department of Veterans Affairs (VA) is amending its 
regulations governing Servicemembers' Group Life Insurance (SGLI) and 
Veterans' Group Life Insurance (VGLI) to prohibit payment of insurance 
proceeds payable

[[Page 60305]]

because of the death of a person whose life was insured under SGLI or 
VGLI (decedent) or payment of a SGLI Traumatic Injury Protection 
(TSGLI) benefit to a person who is convicted of intentionally and 
wrongfully killing the decedent or determined in a civil proceeding to 
have intentionally and wrongfully killed the decedent (slayer) and to 
any family member of the slayer. These provisions apply also to any 
person who assisted the slayer in causing the death of the decedent. 
Additionally, this document contains an interim final amendment that 
defines the term ``member of the family'' not to include a ``domestic 
partner.''

DATES: Effective Date: This final rule is effective November 2, 2012.
    Applicability Date: This rule is applicable to any claim for SGLI 
or VGLI proceeds, including a claim for a payment under 38 CFR 9.20, 
Traumatic injury protection, filed on or after November 2, 2012, and to 
any such claim filed before that date that has not been paid or denied 
as of that date.
    Comment Date: Comments on the omission of the term ``domestic 
partner'' from the definition of a ``member of the family'' must be 
submitted by December 3, 2012.

ADDRESSES: Written comments may be submitted through 
www.Regulations.gov; by mail or hand-delivery to Director, Regulations 
Management (02REG), Department of Veterans Affairs, 810 Vermont Avenue 
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-AN40--Servicemembers' Group Life Insurance and Veterans' Group 
Life Insurance--Slayer's Rule Exclusion.'' Copies of comments received 
will be available for public inspection in the Office of Regulation 
Policy and Management, Room 1063B, between the hours of 8:00 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 
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 8079, Philadelphia, PA 
19101, (215) 842-2000, ext. 2905. (This is not a toll-free number.)

SUPPLEMENTARY INFORMATION: On December 13, 2011, VA published in the 
Federal Register (76 FR 77455) a proposed rule to amend VA regulations 
governing the payment of SGLI or VGLI proceeds and benefit payments 
under the TSGLI program. Specifically, VA proposed to amend 38 CFR 9.1 
and 9.5 to prohibit payment of SGLI or VGLI proceeds or a TSGLI benefit 
to: (1) A person who is convicted of intentionally killing the decedent 
or determined in a civil proceeding to have intentionally killed the 
decedent (known hereafter as the ``slayer''); (2) a member of the 
slayer's family who is not related to the decedent by blood, legal 
adoption, or marriage; and (3) a member of the slayer's family who is 
related to the decedent by blood, legal adoption, or marriage and is 
convicted of a crime involving the intentional killing of the decedent 
or determined in a civil proceeding to have been involved in the 
intentional killing of the decedent.
    Interested persons were invited to submit written comments on or 
before February 13, 2012. We received one comment, from Vietnam 
Veterans of America (VVA) concerning the terms used in, and the 
complexity of some of the language of, the proposed regulation. Based 
on internal agency reconsideration of the proposed regulation and the 
comment received from VVA, VA is making the following changes to the 
proposed rule.
    First, VVA recommended adding the words ``and wrongfully'' and 
``and wrongful'' as part of the descriptions provided in proposed Sec.  
9.5(e)(2)(i) and (iii), respectively. VA agrees with VVA's 
recommendation to include the words ``and wrongfully'' in Sec.  
9.5(e)(2)(i) because those words speak to the heinous aspect of the 
slayer's act that violates public policy. In order to be consistent, we 
will also add ``and wrongfully'' to Sec.  9.1(l). In addition, this 
language is consistent with the language used in 38 CFR 3.11, which 
prohibits the payment of certain VA benefits to ``[a]ny person who has 
intentionally and wrongfully caused the death of another person'' if 
the benefits would be payable by reason of that death. The language of 
38 CFR 3.11 serves as an appropriate model for the SGLI and VGLI 
Slayer's Rule Exclusion. However, VA did not incorporate the words 
``and wrongful'' into proposed Sec.  9.5(e)(2)(iii) because that 
provision has been completely revised in accordance with VVA's second 
recommendation to prohibit payment of insurance benefits to the family 
members of either the slayer or anyone who aided or assisted the slayer 
in causing the death of the decedent.
    Second, VVA recommended simplifying the language of proposed Sec.  
9.5(e)(2) to make the regulation easier to understand as it relates to 
the persons who are prohibited from receiving insurance proceeds and 
benefits. VA agrees with VVA's suggestion and has modified the language 
of Sec.  9.5(e)(2) to clarify the intent of the proposed rule that the 
slayer, anyone who assists the slayer in causing the death of the 
decedent, and the family members of the slayer or anyone who assists 
the slayer be prohibited from receiving insurance proceeds or benefits 
payable because of the decedent's death. Although proposed Sec.  
9.5(e)(2) included anyone who is convicted or found civilly liable for 
the death of the decedent, which would imply inclusion of an 
accomplice, the modified rule language removes any ambiguity regarding 
the inclusion of an accomplice under Sec.  9.5(e)(2).
    Third, VVA suggested changing the term ``surviving spouse'' in 
proposed Sec.  9.5(e)(4)(i)(B) with the term ``widow or widower'' to 
make the reference consistent with the terms used in Chapter 19 of 
title 38, United States Code (U.S.C.). VA agrees with this suggestion 
and has altered the regulatory text accordingly. Use of the term 
``widow or widower'' is consistent with the language of 38 U.S.C. 
1970(a), which provides the order of preference for payments of SGLI 
and VGLI proceeds.
    Finally, based on internal agency review, VA is removing proposed 
Sec.  9.1(l)(6), which included ``[d]omestic partner'' as a ``member of 
the family'' for purposes of the provisions in Sec.  9.5(e)(2), due to 
the unsettled legal landscape surrounding the recognition of such 
partnerships. Because recognition of the legality of such relationships 
varies from state to state, VA has determined that including such 
partnerships in this part would cause an undue administrative burden. 
The public is invited to comment on the omission of the term ``domestic 
partner'' from the definition of a ``member of the family.''
    For the reasons discussed above, VA is adopting the proposed rule 
as a final rule with the above-noted changes.

Administrative Procedure Act

    Regarding the interim final amendment that defines the term 
``member of the family'' within this final rule at 38 CFR 9.1(l) not to 
include a ``domestic partner,'' we find, pursuant to 5 U.S.C. 
553(b)(B), that there is good cause to dispense with advance public 
notice. As noted above, the legal landscape surrounding the recognition 
of such partnerships is unsettled. Therefore, at this time, the term's 
inclusion in the definition of a ``member of the family'' would be 
impracticable

[[Page 60306]]

and contrary to the public interest. Accordingly, VA is issuing this 
final rule with an interim final amendment to omit the term ``domestic 
partner'' from Sec.  9.1(l).

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

Paperwork Reduction Act

    This final 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 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 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 directly affect 
only individuals and will not directly affect any small entities. 
Therefore, pursuant to 5 U.S.C. 605(b), this final 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 September 28, 2012, for publication.

List of Subjects in 38 CFR Part 9

    Life insurance, Military personnel, Veterans.

    Dated: September 28, 2012.
Robert C. McFetridge,
Director of Regulation Policy and Management, Office of the General 
Counsel, Department of Veterans Affairs.

    For the reasons stated in the preamble, VA 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.

0
2. Amend Sec.  9.1 by adding a new paragraph (l) to read as follows:


Sec.  9.1  Definitions.

* * * * *
    (l) The term member of the family as used in Sec.  9.5(e)(2) means 
an individual with any of the following relationships to a person who 
is convicted of intentionally and wrongfully killing the decedent or 
determined in a civil proceeding to have intentionally and wrongfully 
killed the decedent:
    (1) Spouse;
    (2) Biological, adopted, or step child;
    (3) Biological, adoptive, or step parent;
    (4) Biological, adopted, or step sibling; or
    (5) Biological, adoptive, or step grandparent or grandchild.
* * * * *

0
3. Amend Sec.  9.5 by adding paragraph (e) to read as follows:


Sec.  9.5  Payment of proceeds.

* * * * *
    (e)(1) The proceeds payable because of the death of an individual 
insured under Servicemembers' Group Life Insurance or Veterans' Group 
Life Insurance (``decedent'') shall not be payable to any person 
described in paragraph (e)(2) of this section. A Servicemembers' Group 
Life Insurance Traumatic Injury Protection benefit payable under Sec.  
9.20(j)(3) shall not be payable to any person described in paragraph 
(e)(2) of this section.
    (2) The persons described in this paragraph are:
    (i) A person who is convicted of intentionally and wrongfully 
killing the decedent or determined in a civil proceeding to have 
intentionally and wrongfully killed the decedent;
    (ii) A person who is convicted of assisting or aiding, or 
determined in a civil proceeding to have assisted or aided, a person 
described in paragraph (e)(2)(i) of this section; and
    (iii) A member of the family of a person described in paragraph 
(e)(2)(i) or (e)(2)(ii) of this section who is not related to the 
decedent by blood, legal adoption, or marriage.
    (3) The Servicemembers' Group Life Insurance or Veterans' Group 
Life Insurance proceeds or Servicemembers' Group Life Insurance 
Traumatic Injury Protection benefit not payable under paragraph (e)(1) 
of this section to any person described in paragraph (e)(2) of this 
section is not payable to such persons even though the criminal 
conviction or civil determination is pending appeal.
    (4)(i) Servicemembers' Group Life Insurance or Veterans' Group Life 
Insurance proceeds or a Servicemembers' Group Life Insurance Traumatic 
Injury Protection benefit not payable under paragraphs (e)(1) and 
(e)(2) of this section shall be payable to the first person or persons 
listed in paragraphs (e)(4)(i)(A) through (F) of

[[Page 60307]]

this section who are surviving on the date of the decedent's death in 
the following order of precedence:
    (A) To the next eligible beneficiary designated by the decedent in 
a writing received by the appropriate office of the applicable 
uniformed service before the decedent's death in the uniformed services 
in the case of Servicemembers' Group Life Insurance proceeds or a 
Servicemembers' Group Life Insurance Traumatic Injury Protection 
benefit, or in a writing received by the administrative office defined 
in Sec.  9.1(b) of this part before the decedent's death in the case of 
Veterans' Group Life Insurance proceeds;
    (B) To the decedent's widow or widower;
    (C) To the decedent's child or children, in equal shares, and 
descendants of deceased children by representation;
    (D) To the decedent's parents, in equal shares, or to the survivor 
of them;
    (E) To the duly appointed executor or administrator of the 
decedent's estate;
    (F) To other next of kin of the decedent as determined by the 
insurer (defined in Sec.  9.1(c) of this part) under the laws of the 
domicile of the decedent at the time of the decedent's death.
    (ii) Payment of Servicemembers' Group Life Insurance or Veterans' 
Group Life Insurance proceeds or a Servicemembers' Group Life Insurance 
Traumatic Injury Protection benefit to any person under paragraph 
(e)(4)(i) of this section shall bar recovery of those proceeds or that 
benefit by any other person.
* * * * *
[FR Doc. 2012-24391 Filed 10-2-12; 8:45 am]
BILLING CODE 8320-01-P