[Federal Register Volume 77, Number 20 (Tuesday, January 31, 2012)]
[Proposed Rules]
[Pages 4734-4735]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-1990]



38 CFR Part 9

RIN 2900-AO30

Servicemembers' Group Life Insurance--Stillborn Child Coverage

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.


SUMMARY: The Department of Veterans Affairs (VA) proposes to amend its 
Servicemembers' Group Life Insurance (SGLI) regulations in order to 
provide that, if a stillborn child is otherwise eligible to be insured 
by the SGLI coverage of more than one member, the child would be 
insured by the coverage of the child's SGLI-insured mother.

DATES: Comments must be received by VA on or before April 2, 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-AO30--Servicemembers' Group Life Insurance--Stillborn Child 
Coverage.'' 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 are available online through the Federal Docket Management 
System (FDMS) at http://www.Regulations.gov.

FOR FURTHER INFORMATION CONTACT: Gregory C. Hosmer, Senior Attorney-
Advisor, Department of Veterans Affairs Regional Office and Insurance 
Center (310/290B), P.O. Box 8079, Philadelphia, Pennsylvania 19101, 
(215) 842-2000, ext 4280. (This is not a toll free number.)

SUPPLEMENTARY INFORMATION: The Veterans' Survivor Benefits Improvements 
Act of 2001, Public Law 107-14, established a program of family 
insurance coverage under Servicemembers' Group Life Insurance (SGLI) 
through which a SGLI-insured service member's insurable dependents 
could also be insured. Section 1965(10) of title 38, United States 
Code, defined ``insurable dependent'' as a service member's spouse or 
child. Under 38 U.S.C. 1967(a), the child of a SGLI-insured member is 
automatically insured for $10,000.
    Section 1967(a)(4)(B) prohibits an insurable dependent who is a 
child from being insured at any time under the SGLI coverage of more 
than one member, i.e., more than one SGLI-insured parent. If a child is 
otherwise eligible to be insured by the coverage of more than one 
member, under section 1967(a)(4)(B) the child is insured by the 
coverage of the member whose eligibility for SGLI occurred first, 
``except that if that member does not have legal custody of the child, 
the child shall be insured by the coverage of the member who has legal 
custody of the child.'' Which parent has legal custody of a child is 
determined in accordance with applicable State law.
    Section 402 of the Veterans' Benefits Improvement Act of 2008, 
Public Law 110-389, expanded the definition of ``insurable dependent'' 
for SGLI purposes to include a ``member's stillborn child.'' On 
November 18, 2009, VA added paragraph (k) to 38 CFR 9.1 to define the 
term ``member's stillborn child'' for purposes of SGLI coverage. 74 FR 
    Our research has determined that the law of the 50 States is silent 
as to which parent of a stillborn child has legal custody of the 
stillborn child. VA would not be able to determine the legal custodian 
of a stillborn child in accordance with State law. Therefore, we 
propose that a stillborn child of two SGLI-covered parents will always 
be insured under the mother's coverage.
    Ease of application is just one reason for adopting such a simple 
rule. VA proposes this rule also because a stillborn child was 
exclusively in the mother's physical custody. Furthermore, if the 
paternity of a stillborn child were in issue, it would be particularly 
onerous to require a stillborn's father to establish paternity of the 
stillborn child. It would be more compassionate under such 
circumstances to simply apply a standing rule that obviates the need 
for such determinations. We therefore propose a rule to amend 38 CFR 
9.5 by adding paragraph (e) to provide that, if a stillborn child is 
otherwise eligible to be insured by the coverage of more than one 
member, the stillborn child would be insured by the coverage of the 
SGLI-insured mother.
    This rule would apply to claims filed on or after the publication 
of the final rule.

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 one year. This rule would have no such effect on 
State, local, and tribal governments or the private sector.

Paperwork Reduction Act

    This proposed rule contains no provision constituting a collection 
of information under the Paperwork Reduction Act (44 U.S.C. 3501 et 

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
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).

[[Page 4735]]

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.''
    VA has examined the economic, interagency, legal, and policy 
implications of this proposed rule and has determined it not to be a 
significant regulatory action under Executive Order 12866.

Regulatory Flexibility Act

    The Secretary hereby certifies that this proposed 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 et seq. This proposed rule will directly affect only 
individuals and will not directly affect 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

    The catalog of Federal Domestic Assistance Program number and the 
title for this regulation 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 January 22, 2012, for publication.

List of Subjects in 38 CFR Part 9

    Life insurance, Military personnel, Veterans.

    Dated: January 26, 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, the Department of Veterans 
Affairs proposes to amend 38 CFR part 9 as follows:


    1. The authority citation for part 9 continues to read as follows:

    Authority:  38 U.S.C. 501, 1965-1980A, unless otherwise noted.

    2. Section 9.5 is amended by adding paragraph (e) and revising the 
authority citation at the end of the section to read as follows:

Sec.  9.5  Payment of proceeds.

* * * * *
    (e) If a stillborn child is otherwise eligible to be insured by the 
Servicemembers' Group Life Insurance coverage of more than one member, 
the child shall be insured by the coverage of the child's insured 

(Authority: 38 U.S.C. 501(a), 1965(10), 1967(a)(4)(B))

[FR Doc. 2012-1990 Filed 1-30-12; 8:45 am]