[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1618 Introduced in House (IH)]






109th CONGRESS
  1st Session
                                H. R. 1618

To amend title 38, United States Code, to establish a group disability 
  insurance benefit for members of the Armed Forces who incur certain 
                          severe disabilities.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 13, 2005

Mr. Renzi (for himself, Mr. Smith of New Jersey, Mr. Hayworth, and Mr. 
   Jones of North Carolina) introduced the following bill; which was 
             referred to the Committee on Veterans' Affairs

_______________________________________________________________________

                                 A BILL


 
To amend title 38, United States Code, to establish a group disability 
  insurance benefit for members of the Armed Forces who incur certain 
                          severe disabilities.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Wounded Warrior Servicemembers Group 
Disability Insurance Act of 2005''.

SEC. 2. ESTABLISHMENT OF A PROGRAM OF GROUP DISABILITY INSURANCE FOR 
              SEVERELY INJURED MEMBERS OF THE ARMED FORCES.

    (a) In General.--Chapter 19 of title 38, United States Code, is 
amended by adding at the end the following new subchapter:

       ``SUBCHAPTER V--SERVICEMEMBERS' GROUP DISABILITY INSURANCE

``Sec. 1991. Definitions; program name
    ``(a) Definitions.--Except as otherwise expressly provided, the 
definitions set forth in section 1965 of this title are applicable to 
this subchapter.
    ``(b) Program Name.--The program of insurance under this subchapter 
is known as `Servicemembers' Group Disability Insurance'.
``Sec. 1992. Program authority; eligible insurance companies
    ``(a) Program Authority.--The Secretary is authorized, without 
regard to section 3709 of the Revised Statutes (41 U.S.C. 5), to 
purchase from one or more insurance companies a policy or policies of 
group disability insurance to provide the benefits specified in this 
subchapter.
    ``(b) Eligible Insurance Companies.--The Secretary may only 
purchase a policy under this subchapter from an insurance company 
that--
            ``(1) is licensed to issue disability insurance in each of 
        the 50 States of the United States and in the District of 
        Columbia; and
            ``(2) as of the most recent December 31 for which 
        information is available to the Secretary, has in effect at 
        least 1 percent of the total amount of group disability 
        insurance which all insurance companies have in effect in the 
        United States.
    ``(c) Insurance Company Administrative Office.--Any insurance 
company issuing a policy under this subchapter shall establish an 
administrative office at a place and under a name designated by the 
Secretary.
    ``(d) Reinsurance.--The Secretary shall arrange with any insurance 
company issuing a policy under this subchapter to reinsure, under 
conditions approved by the Secretary, portions of the total amount of 
insurance under such policy with such other insurance companies (which 
meet qualifying criteria set forth by the Secretary) as may elect to 
participate in such reinsurance.
    ``(e) Discontinuation of Policies.--The Secretary may at any time 
discontinue any policy that the Secretary has purchased from any 
insurance company under this subchapter.
``Sec. 1993. Persons insured; amount
    ``(a) Persons Insured.--(1) Subject to an election under paragraph 
(2), any policy of insurance purchased by the Secretary under section 
1992 of this title shall automatically insure any person insured under 
section 1966 of this title.
    ``(2) A person insured under section 1966 of this title may elect 
in writing not to be insured under this subchapter. Any such election 
shall be in such form as the Secretary may prescribe.
    ``(b) Amount of Insurance.--The amount for which a person is 
insured under this subchapter is $50,000.
    ``(c) Effective Date of Coverage.--The insurance under this 
subchapter shall be effective with respect to a member on the latest of 
the following dates:
            ``(1) The first day of active duty or active duty for 
        training.
            ``(2) The beginning of a period of inactive duty training 
        scheduled in advance by competent authority.
            ``(3) In the case of a member of the Ready Reserve, the 
        first day on which the member meets the qualifications set 
        forth in section 1965(5)(B) of this title.
            ``(4) The date certified by the Secretary to the Secretary 
        concerned as the date on which Servicemembers' Group Disability 
        Insurance under this subchapter for the class or group 
        concerned takes effect.
    ``(d) Members Injured While Proceeded to or From Duty.--(1) Any 
member (other than one who has elected not to be insured under this 
subchapter for the period or periods of duty involved)--
            ``(A) who, when authorized or required by competent 
        authority, assumes an obligation to perform (for less than 31 
        days) active duty, or active duty for training, or inactive 
        duty training scheduled in advance by competent authority; and
            ``(B) who is rendered uninsurable at standard premium rates 
        according to the good health standards approved by the 
        Secretary, from a disability, or aggravation of a preexisting 
        disability, incurred by such member while proceeding directly 
        to or returning directly from such active duty, active duty for 
        training, or inactive duty training as the case may be;
shall be deemed to have been on active duty, active duty for training, 
or inactive duty training, as the case may be, and to have been insured 
under this subchapter at the time such disability was incurred or 
aggravated.
    ``(2) In determining whether or not such member was so authorized 
or required to perform such duty, and whether or not such member was 
rendered uninsurable from a disability so incurred or aggravated, there 
shall be taken into account--
            ``(A) the call or order to duty, the orders and 
        authorizations of competent authority, the hour on which the 
        member began to so proceed or to return, and the hour on which 
        the member was scheduled to arrive for, or on which such member 
        ceased to perform, such duty;
            ``(B) the method of travel employed;
            ``(C) the member's itinerary;
            ``(D) the manner in which the travel was performed; and
            ``(E) the immediate cause of disability.
    ``(3) Whenever any claim is filed alleging that a person insured 
under this subchapter is entitled to benefits by reason of this 
subsection, the burden of proof shall be on the insured person.
    ``(e) Subsequent Coverage After Election not to Be Covered.--If a 
person eligible for insurance under this subchapter is not so insured 
by reason of an election made by a member under subparagraph (B) of 
subsection (a)(3), the person may thereafter be insured under this 
subchapter upon--
            ``(1) written application by the member;
            ``(2) proof of good health of the member' and
            ``(3) compliance with such other terms and conditions as 
        may be prescribed by the Secretary.
    ``(f) Furnishing of Information.--Whenever a member has the 
opportunity to make an election under subsection (a) not to be insured 
under this subchapter, and at such other times periodically thereafter 
as the Secretary concerned considers appropriate, the Secretary 
concerned shall furnish to the member general information concerning 
disability insurance. Such information shall include--
            ``(1) the purpose and role of disability insurance in 
        financial planning; and
            ``(2) the availability of commercial disability insurance.
    ``(g) Changes in Benefits.--The effective date and time for any 
change in benefits under the Servicemembers' Group Disability Insurance 
Program shall be based on the date and time according to the time zone 
immediately west of the International Date Line.
``Sec. 1994. Qualifying disabilities
    ``Any of the following is a qualifying disability for the purposes 
of this subchapter:
            ``(1) Complete and permanent loss of movement of an 
        extremity.
            ``(2) Burns of a severity equaling third degree or higher 
        and affecting an area or areas of the body exceeding one square 
        foot.
            ``(3) The loss of sight of one or both eyes entirely, 
        irrecoverably, and uncorrectably.
            ``(4) The permanent loss of one hand, by severance at or 
        above the wrist joint.
            ``(5) The permanent loss of one foot, by severance at or 
        above the ankle joint.
            ``(6) The loss of speech or hearing entirely, 
        irrecoverably, and uncorrectably.
            ``(7) Any other disability specified by the Secretary by 
        regulation for the purposes of this section.
``Sec. 1995. Duration and termination of coverage
    ``Each policy purchased under this subchapter shall contain a 
provision, in terms approved by the Secretary, to the effect that any 
insurance thereunder on any member of the uniformed services, unless 
discontinued upon the written request of the insured (or discontinued 
pursuant to section 1996(a)(2)(B) of this title), shall continue in 
effect while the member is on active duty, active duty for training, or 
inactive duty training scheduled in advance by competent authority 
during the period thereof, or while the member meets the qualifications 
set forth in subparagraph (B) or (C) of section 1965(5) of this title 
and such insurance shall cease as follows:
            ``(1) With respect to a member on active duty or active 
        duty for training under a call or order to duty that does not 
        specify a period of less than 31 days, insurance under this 
        subchapter shall cease--
                    ``(A) at midnight, local time, on the date of 
                separation or release from active duty or active duty 
                for training; or
                    ``(B) at the end of the thirty-first day of a 
                continuous period of--
                            ``(i) absence without leave;
                            ``(ii) confinement by civil authorities 
                        under a sentence adjudged by a civilian court; 
                        or
                            ``(iii) confinement by military authorities 
                        under a court-martial sentence involving total 
                        forfeiture of pay and allowances.
        Any insurance so terminated as the result of an absence or 
        confinement referred to in subparagraph (B), together with any 
        beneficiary designation in effect for such insurance at such 
        termination thereof, shall be automatically revived as of the 
        date the member is restored to active duty with pay or to 
        active duty for training with pay.
            ``(2) With respect to a member on active duty or active 
        duty for training under a call or order to duty that specifies 
        a period of less than 31 days, insurance under this subchapter 
        shall cease at midnight, local time, on the last day of such 
        duty.
            ``(3) With respect to a member on inactive duty training 
        scheduled in advance by competent authority, insurance under 
        this subchapter shall cease at the end of such scheduled 
        training period.
            ``(4) With respect to a member of the Ready Reserve of a 
        uniformed service who meets the qualifications set forth in 
        subparagraph (B) or (C) of section 1965(5) of this title, 
        insurance under this subchapter shall at midnight, local time, 
        on the date of separation or release from such assignment.
``Sec. 1996. Premiums: deductions and payments; investment; expenses
    ``(a) Deductions and Payments.--The provisions of subsection (a) of 
section 1969 of this title shall apply to Servicemembers' Group 
Disability Insurance in the same manner as those provisions apply to 
Servicemembers' Group Life Insurance under that subsection.
    ``(b) Appropriations for Premiums for Extra Hazard of Duty in the 
Uniformed Services.--The provisions of subsection (b) of section 1969 
of this title shall apply to Servicemembers' Group Disability Insurance 
in the same manner as those provisions apply to Servicemembers' Group 
Life Insurance under that subsection.
    ``(c) Advance on Appropriations.--The provisions of subsection (c) 
of section 1969 of this title shall apply to Servicemembers' Group 
Disability Insurance in the same manner as those provisions apply to 
Servicemembers' Group Life Insurance under that subsection.
    ``(d) Deposits to Revolving Fund.--(1) The sums withheld from the 
basic or other pay of members, or collected from them by the Secretary 
concerned, under subsection (a) and the sums contributed from 
appropriations under subsection (b) together with the income derived 
from any dividends or premium rate adjustments received from insurers 
shall be deposited to the credit of a revolving fund established in the 
Treasury of the United States. All premium payments and extra hazard 
costs on Servicemembers' Group Disability Insurance and the 
administrative cost to the Department of insurance issued under this 
subchapter shall be paid from the revolving fund.
    ``(2) The provisions of paragraphs (2) and (3) of subsection (d) of 
section 1969 of this title shall apply to Servicemembers' Group 
Disability Insurance, and to the fund established under paragraph (1) 
of this subsection, in the same manner as those provisions apply to 
Servicemembers' Group Life Insurance and the fund established under 
paragraph (1) of that subsection (d).
    ``(e) Secretary of Defense Regulations.--The Secretary of Defense 
shall prescribe regulations for the administration of the functions of 
the Secretaries of the military departments under this section. Such 
regulations shall be subject to the second sentence of subsection (e) 
of section 1969 of this title.
    ``(f) State Taxes.--The provisions of subsection (f) of section 
1969 of this title shall apply to Servicemembers' Group Disability 
Insurance in the same manner as those provisions apply to 
Servicemembers' Group Life Insurance under that subsection.
``Sec. 1997. Payment of insurance
    ``(a) Payment.--An amount of insurance under this subchapter in 
force on a member or former member on the date on which that person 
incurs a qualifying disability shall be paid, upon the establishment of 
a valid claim therefor, to the member or former member.
    ``(b) Lump Sum Payment.--A payment under subsection (a) shall be a 
lump sum payment in settlement of insurance under this subchapter.
    ``(c) Status of Payment.--The provisions of subsection (c) of 
section 1970 of this title shall apply to a payment due or to become 
due under Servicemembers' Group Disability Insurance in the same manner 
as those provisions apply to a payment due or to become due under 
Servicemembers' Group Life Insurance under that subsection.
    ``(d) Prohibition on Payment That Would Escheat to State.--The 
provisions of subsection (h) of section 1970 of this title shall apply 
to insurance payable under Servicemembers' Group Disability Insurance 
in the same manner as those provisions apply to insurance payable under 
Servicemembers' Group Life Insurance under that subsection.
``Sec. 1998. Premiums; readjustment of rates
    ``(a) Basic Premium Rate for First Policy Year.--Each policy 
purchased under section 1992 of this title shall include for the first 
policy year a basic premium rates which the Secretary shall have 
determined on a basis consistent with the lowest schedule of basic 
premium rates generally charged for new group disability insurance 
policies issued to large employers. Each policy so purchased shall also 
include provisions whereby the basic rates of premium determined for 
the first policy year shall be continued for subsequent policy years, 
except that they may be readjusted for any subsequent year, based on 
the experience under the policy, such readjustment to be made by the 
insurance company or companies issuing the policy on a basis determined 
by the Secretary in advance of such year to be consistent with the 
general practice of disability insurance companies under policies of 
group disability insurance issued to large employers.
    ``(b) Total Premium.--The total premiums for Servicemembers' Group 
Disability Insurance shall be the sum of--
            ``(1) the amounts computed according to subsection (a); and
            ``(2) the estimated cost traceable to the extra hazard of 
        active duty in the uniformed services as determined by the 
        Secretary, with such estimated costs to be retroactively 
        readjusted annually in accordance with section 1996(b) of this 
        title.
    ``(c) Maximum Expense and Risk Charges.--Each policy purchased 
under section 1992 of this title shall contain a provision stipulating 
the maximum expense and risk charges for the first policy year, which 
charges shall have been determined by the Secretary on a basis 
consistent with the general level of such charges made by disability 
insurance companies under policies of group disability insurance issued 
to large employers. Such maximum charges shall be continued from year 
to year, except that the Secretary may redetermine such maximum charges 
for any year either by agreement with the insurance company or 
companies issuing the policy or upon written notice given by the 
Secretary to such companies at least one year in advance of the 
beginning of the year for which such redetermined maximum charges will 
be effective.
    ``(d) Annual Accounting.--Each policy under section 1992 of this 
title shall provide for an accounting to the Secretary not later than 
90 days after the end of each policy year. Each such accounting shall 
set forth, in a form approved by the Secretary, the following:
            ``(1) The amounts of premiums actually accrued under the 
        policy from its date of issue to the end of such policy year.
            ``(2) The total of all claim charges incurred for that 
        period.
            ``(3) The amounts of the insurers' expense and risk charge 
        for that period.
    ``(e) Special Contingency Reserve.--Any excess of the total of 
paragraph (1) of subsection (d) over the sum of paragraphs (2) and (3) 
of that subsection shall be held by the insurance company issuing the 
policy as a special contingency reserve to be used by such insurance 
company for charges under such policy only. Any such reserve shall bear 
interest at a rate to be determined in advance of each policy year by 
the insurance company issuing the policy, which rate shall be approved 
by the Secretary as being consistent with the rates generally used by 
such company for similar funds held under other group disability 
insurance policies.
    ``(f) Credits to Revolving Fund.--If and when the Secretary 
determines that a special contingency reserve established under 
subsection (e) has attained an amount estimated by the Secretary to 
make satisfactory provision for adverse fluctuations in future charges 
under the policy, any further excess shall be deposited to the credit 
of the revolving fund established under section 1996(d)(1) of this 
title. If and when such policy is discontinued, and if after all 
charges have been made, there is a positive balance remaining in such 
special contingency reserve, such balance shall be deposited to the 
credit of the revolving fund, subject to the right of the insurance 
company or companies issuing the policy to make such deposit in equal 
monthly installments over a period of not more than two years.
``Sec. 1999. Other provisions
    ``(a) Benefit Certificates.--The provisions of section 1972 of this 
title shall apply to members insured under Servicemembers' Group 
Disability Insurance in the same manner as those provisions apply to a 
member insured under Servicemembers' Group Life Insurance under that 
section.
    ``(b) Forfeiture.--The provisions of the first sentence of section 
1973 of this title shall apply to Servicemembers' Group Disability 
Insurance in the same manner as those provisions apply to 
Servicemembers' Group Life Insurance under that section.
    ``(c) Jurisdiction of District Courts.--The provisions of section 
1975 of this title shall apply to Servicemembers' Group Disability 
Insurance in the same manner as those provisions apply to 
Servicemembers' Group Life Insurance under that section.
    ``(d) Reinstatement.--The provisions of section 1978 of this title 
shall apply to Servicemembers' Group Disability Insurance in the same 
manner as those provisions apply to Servicemembers' Group Life 
Insurance under that section.
    ``(e) Incontestability.--Subject to subsection (b), insurance 
coverage granted under this subchapter shall be incontestable from the 
date of issue, reinstatement, or conversion except for fraud or 
nonpayment of premium.''.
    (b) Effective Date.--The insurance provided for in subchapter V of 
chapter 19 of title 38, United States Code, as added by subsection (a), 
and the deductions and contributions for that purpose under that 
subchapter, shall take effect on the date designated by the Secretary 
of Veterans Affairs, which date shall not be later than one year after 
the date of the enactment of this Act. The Secretary shall publish a 
notice of such date in the Federal Register and shall submit to 
Congress notice in writing of such date.
    (c) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by adding at the end the following new items:
       ``subchapter v--servicemembers' group disability insurance
``1991. Definitions; program name.
``1992. Program authority; eligible insurance companies.
``1993. Persons insured; amount.
``1994. Qualifying disabilities.
``1995. Duration and termination of coverage.
``1996. Premiums: deductions and payments; investment; expenses.
``1997. Payment of insurance.
``1998. Premiums; readjustment of rates.
``1999. Other provisions.''.
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