[Congressional Record Volume 156, Number 132 (Tuesday, September 28, 2010)]
[House]
[Pages H7020-H7027]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   SECURING AMERICA'S VETERANS INSURANCE NEEDS AND GOALS ACT OF 2010

  Mr. FILNER. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 5993) to amend title 38, United States Code, to ensure that 
beneficiaries of Servicemembers' Group Life Insurance receive financial 
counseling and disclosure information regarding life insurance 
payments, and for other purposes, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 5993

       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 ``Securing America's Veterans 
     Insurance Needs and Goals Act of 2010'' or the ``SAVINGS Act 
     of 2010''.

     SEC. 2. FINANCIAL COUNSELING AND DISCLOSURE INFORMATION FOR 
                   SERVICEMEMBERS' GROUP LIFE INSURANCE 
                   BENEFICIARIES.

       (a) Financial Counseling and Disclosure Information.--
       (1) In general.--Section 1966 of title 38, United States 
     Code, is amended by adding at the end the following new 
     subsection:
       ``(e)(1) In order to be an eligible life insurance company 
     under this section, a life insurance company shall--
       ``(A) make available, both orally and in writing, financial 
     counseling to a beneficiary or other person otherwise 
     entitled to payment upon the establishment of a valid claim 
     under section 1970(a) of this title; and
       ``(B) at the time that such beneficiary or other person 
     entitled to payment establishes a valid claim under section 
     1970(a) of this title, provide to such beneficiary or other 
     person the disclosures described in paragraph (2).
       ``(2) The disclosures provided pursuant to paragraph (1)(B) 
     shall--
       ``(A) be provided both orally and in writing; and
       ``(B) include information with respect to the payment of 
     the claim, including--
       ``(i) an explanation of the methods available to receive 
     such payment, including--
       ``(I) receipt of a lump-sum payment;
       ``(II) allowing the insurance company to maintain the lump-
     sum payment;
       ``(III) receipt of thirty-six equal monthly installments; 
     and
       ``(IV) any alternative methods;
       ``(ii) an explanation that any such payment that is 
     maintained by the life insurance company or paid in thirty-
     six equal monthly installments by the company is not insured 
     by the Federal Deposit Insurance Corporation;

[[Page H7021]]

       ``(iii) an explanation of the interest rate earned on any 
     such payment that is maintained by the life insurance company 
     or paid in thirty-six equal monthly installments by the 
     company and how such rate compares to the interest rate 
     earned by accounts at financial institutions, including 
     demand accounts; and
       ``(iv) other relevant information.
       ``(3) In order to be an eligible life insurance company 
     under this section, a life insurance company may not charge 
     any fees to a beneficiary or other person otherwise entitled 
     to payment upon the establishment of a valid claim under 
     section 1970(a) of this title for any purpose, including for 
     maintaining such payment with the company.
       ``(4) The Secretary shall include in each annual 
     performance and accountability report submitted by the 
     Secretary to Congress information concerning--
       ``(A) the number of individuals who received financial 
     counseling under paragraph (1)(A);
       ``(B) the number of individuals who received the 
     disclosures under paragraph (1)(B);
       ``(C) the type of information received by such individuals 
     during such counseling; and
       ``(D) any recommendations, complaints, or other information 
     with respect to such counseling that the Secretary considers 
     relevant.''.
       (2) Regulations.--The Secretary of Veterans Affairs shall 
     prescribe regulations to carry out section 1966(e) of title 
     38, United States Code, as added by paragraph (1).
       (b) Office of Survivors Assistance.--
       (1) Advisory role.--Subsection (b) of section 321 of such 
     title is amended--
       (A) by striking ``The Office'' and inserting ``(1) The 
     Office''; and
       (B) by adding at the end the following:
       ``(2) The Director of the Office shall attend each meeting 
     of the Advisory Council on Servicemembers' Group Life 
     Insurance under section 1974 of this title.''.
       (2) Resources.--Subsection (d) of such section is amended--
       (A) by striking ``The Secretary'' and inserting ``(1) The 
     Secretary''; and
       (B) by adding at the end the following:
       ``(2) In carrying out paragraph (1), the Secretary shall 
     ensure that the Office has the personnel necessary to serve 
     as a resource to provide individuals described in paragraph 
     (1) and (2) of subsection (a) with information on how to 
     receive the Servicemembers' Group Life Insurance financial 
     counseling pursuant to section 1966(e)(1) of this title.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
California (Mr. Filner) and the gentleman from Indiana (Mr. Buyer) each 
will control 20 minutes.
  The Chair recognizes the gentleman from California.


                             General Leave

  Mr. FILNER. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days to revise and extend their remarks and to 
include extraneous material on H.R. 5993, as amended.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.
  Mr. FILNER. I yield myself such time as I may consume.
  Mr. Speaker, I rise in strong support of H.R. 5993, the Securing 
America's Veterans Insurance Needs and Goals, or SAVINGS, Act.
  This bill was sponsored by one of our esteemed colleagues, 
Representative Debbie Halvorson of Illinois, to ensure that 
beneficiaries of the Servicemembers' Group Life Insurance, SGLI, 
receive financial counseling, greater disclosure information and other 
needed support concerning the proceeds of their SGLI life insurance 
benefits. Mrs. Halvorson acted very quickly in response to some of the 
publicity on this and to some of the pain felt by the survivors.
  Mr. Speaker, I yield such time as she may consume to the gentlewoman 
from Illinois (Mrs. Halvorson).
  Mrs. HALVORSON. I thank the chairman for yielding.
  Mr. Speaker, I rise today on behalf of military families and the 
surviving family members of our men and women who were killed in battle 
as they fought to defend our freedom.
  H.R. 5993 will help ensure that the families of our soldiers killed 
in action fully understand the benefits that they are entitled to, and 
it will help them comprehend the financial products they are using.
  As many of our colleagues know, Mr. Speaker, many of our soldiers 
participate in the Servicemembers' Group Life Insurance program, or the 
SGLI, as they fight overseas. The SGLI is intended to provide our 
servicemembers and their families with low-cost life insurance under 
circumstances in which most insurance companies would not take the risk 
of providing life insurance coverage. In the tragic circumstance that a 
soldier is killed in action, the surviving family member is then 
entitled to a policy that helps ease some of the financial burdens left 
behind.
  Currently, the beneficiary may receive the payment in the form of 
what is called a ``Retained Asset Account,'' which is administered by 
the insurance company. These financial products are similar to a 
checking account in that they allow the beneficiary the ability to draw 
down the funds in increments until exhausted.
  Unfortunately, there have been recent media reports highlighting that 
some beneficiaries did not fully understand that their money was being 
held in these accounts. I know I was outraged, as many of my colleagues 
were, to hear about the lack of disclosure and transparency, which is 
what we are fixing today--addressing disclosure, transparency and 
accountability so that our families know exactly what they have coming 
to them. They didn't understand what these accounts were, what was 
happening to their money when it was sitting in these accounts and, 
three, that these accounts were not FDIC-insured. This left the 
beneficiaries feeling as though they were being taken advantage of and 
that they were part of a financial scheme buried in the fine print of 
their policies.
  The surviving family members of our fallen soldiers should never feel 
that way. It is our responsibility to make sure that they don't ever 
feel that way again. We need to make sure that 100 percent of these 
survivors feel protected and safe.
  My bill is endorsed by the American Legion, the National Military 
Family Association, the Military Officers Association of America, the 
Gold Star Wives of America, and on and on and on. I have letters from 
all of them that I would like to include in the Record. However, I want 
to read an excerpt from the National Military Family Association.
  It reads: ``Dear Representative Halvorson, the National Military 
Family Association has long been an advocate for improving the quality 
of life of our military family members who have sacrificed greatly in 
support of our Nation. We are writing today in support of H.R. 5993, 
which seeks to ensure that insurance companies provide appropriate 
information and financial counseling to survivors who receive payments 
from the SGLI groups.
  ``H.R. 5993, the Securing America's Veterans Insurance Needs and 
Goals, which is called the SAVINGS Act, which you have introduced, 
would mandate that the Secretary of Veterans Affairs require insurance 
companies providing coverage through these programs to only provide 
counseling and disclosure information to family members of fallen 
soldiers.
  ``The National Military Family Association is the leading nonprofit 
organization committed to improving the lives of military families. Our 
over 40 years of service and accomplishments have made us a trusted 
resource for families and the Nation's leaders. As the only nonprofit 
organization that represents the families of the Army, Navy, Air Force, 
Marine Corps, Coast Guard, the Commissioned Corps of the Public Health 
Service, and the National Oceanic and Atmospheric Administration, the 
association protects benefits vital to all families, including those of 
the deployed, wounded, and fallen.''

                              {time}  1330

  So as you can see, this is something that is badly needed so that the 
families know exactly what they have available to them so that they can 
make the best decision with those benefits. It focuses on making 
Congress also better aware of what these SGLI programs are about.
  Again, let me be perfectly clear. Today we are strictly focused on 
disclosure, transparency, financial counseling, and oversight. And make 
no mistake, we need to do more work on improving the SGLI program. I 
think we are all committed to doing that, and that is being done 
through investigations, through the VA, and through other committees of 
jurisdiction, but we can't wait. Our military families can't wait. The 
families of our fallen soldiers cannot wait.
  Today, we have the opportunity to move forward on an important 
protection for our military families, and this

[[Page H7022]]

is an urgent issue, and it absolutely needs to be our main focus. It is 
our responsibility to go above and beyond the call of duty. They sure 
have, and we need to protect these widows and orphans. This is one of 
the most important and solemn duties that we have as Members of 
Congress. H.R. 5993 will help us fulfill that responsibility in a 
reasonable and effective manner.
  Before I close, I would like to thank Chairman Filner, Chairman Hall, 
as well as all of our committee staff who have worked so hard to move 
this legislation along, and we have all worked hard on this bill.
  I urge my colleagues to stand with me--protect the families of our 
fallen soldiers--by voting ``yes'' on H.R. 5993.

                                                   Gold Star Wives


                                             of America, Inc.,

                                               September 26, 2010.
     Chairman Bob Filner,
     House Committee on Veterans' Affairs, Cannon House Office 
         Building,
     Washington, DC.
       In light of recent news that insurance companies could 
     potentially use group life insurance policies to profit from 
     accounts it maintains for the families of fallen soldiers, 
     Gold Star Wives of America, Inc. supports H.R. 5993. H.R. 
     5993 would ensure that insurance companies authorized by VA 
     to administer SGLI accounts are fully open and honest about 
     its practices for these policies on which so many 
     servicemembers rely to ensure financial security for their 
     families.
       H.R. 5993, the Securing America's Veterans Insurance Needs 
     and Goals (SAVINGS) Act of 2010, introduced by Representative 
     Debbie Halvorson, would mandate that the Secretary of 
     Veterans Affairs require insurance companies that provide 
     coverage through the Sevicemembers' Group Life Insurance 
     (SGLI) program, to offer financial counseling and improved 
     disclosure information to family members and survivors of 
     fallen soldiers. It would also require an annual report to 
     Congress by VA to ensure that insurance companies are being 
     responsive to military families and survivors and that the 
     Office of Survivors Assistance will be a greater resource in 
     this effort.
       It is critical that the options and information available 
     for survivors offered under the SGLI program involve more 
     disclosure and greater transparency. H.R. 5993 would do that 
     by guaranteeing that survivors of our fallen heroes have 
     access to oral and written financial counseling. This greater 
     disclosure requirements and counseling would better help 
     survivors to understand their options so that they can make 
     sound decisions during a stressful and sorrowful time.
       Gold Star Wives of America, Inc. supports H.R. 5993 so that 
     we can do everything in our power to protect the families and 
     survivors of our fallen soldiers. Their loved ones have 
     answered the call and their survivors deserve these 
     protections.
           Respectfully,
                                                 Martha M. Didamo,
     Board Chair, Gold Star Wives of America, Inc.
                                  ____

                                    The American Legion, Office of


                                       the National Commander,

                               Washington, DC, September 27, 2010.
     Hon. Debbie Halvorson,
     House of Representatives, Longworth House Office Building,
     Washington, DC.
       Dear Representative Halvorson: In light of recent news that 
     insurance companies contracted by the Department of Veterans 
     Affairs (VA) to administer the Servicemembers' Group Life 
     Insurance program (SGLI) could potentially use group life 
     insurance policies to obtain profits from the families of 
     fallen soldiers, The American Legion supports proposed 
     legislation which seeks to ensure that insurance companies 
     are open and honest about the policies on which so many 
     military families rely.
       The legislation you recently introduced, H.R. 5993, 
     Securing America's Veterans Insurance Needs and Goals 
     (SAVINGS) Act, would mandate the VA Secretary to require 
     those insurance companies offering coverage through the SGLI 
     program to provide the beneficiaries of fallen soldiers with 
     financial counseling and disclosure information. In addition, 
     this Act would obligate the VA to provide a report to 
     Congress annually to ensure that those insurance companies 
     are being responsive to military families.
       It is critical to insure complete transparency, full 
     disclosure, and increased information be afforded to military 
     families on insurance matters. This legislation would 
     guarantee the families of our fallen heroes have access to 
     oral and written financial counseling. This counseling would 
     better help family members understand their options so that 
     they can make sound fiscal decisions during a stressful and 
     harrowing period.
       The American Legion supports H.R. 5993 as introduced so 
     that we can protect the military families of our fallen 
     soldiers. However, The American Legion has additional 
     concerns not addressed in the original bill which are equally 
     as important.
       This legislation does not address Retained Asset Accounts 
     (RAA) for disbursement of benefits. This is a common practice 
     used by many insurers for distribution of benefits. However, 
     The American Legion is concerned this method of disbursement 
     may be a violation of Title 38 USC Sec. 1970(d) which 
     requires payments be in 36 monthly installments or one lump 
     sum. The practice should be either stopped or the law needs 
     to be changed. Of further concern to The American Legion is 
     that this legislation does not address the practice of the 
     insurance company executing the program making a profit on 
     the account after the death of a service member and actually 
     misrepresenting or over representing the ``interest bearing 
     account,'' benefit of the program to a payee.
       It is standard policy of the insurance industry to reinvest 
     the money not withdrawn by the payee and to collect interest 
     on that money. The insurer then passes on to the payee a 
     small amount of the interest. While legal and a common 
     industry practice, it should be forbidden by law in the case 
     of military members who have given their lives for the 
     nation. Precedence has been made in setting aside veterans 
     and military in the case of health care insurance and other 
     entitlements due to military service. The American Legion 
     feels that ALL interest received on investments after 
     servicemember's death should be passed on to the payees of 
     the policy.
           Sincerely,
                                                 Jimmie L. Foster,
     National Commander.
                                  ____

                                          National Military Family


                                                  Association,

                               Alexandria, VA, September 23, 2010.
     Hon. Deborah L. Halvorson,
     House of Representatives,
     Washington, DC.
       Dear Representative Halvorson: The National Military Family 
     Association has long been an advocate for improving the 
     quality of life of our military family members, who have 
     sacrificed greatly in support of our Nation. We are writing 
     today in support of H.R. 5993 which seeks to ensure that 
     insurance companies provide appropriate information and 
     financial counseling to survivors who receive payments from 
     the Servicemembers Group Life Insurance (SGLI).
       H.R. 5993, the Securing America's Veterans Insurance Needs 
     and Goals (SAVINGS) Act, which you have introduced, would 
     mandate that the Secretary of Veterans' Affairs (VA) require 
     insurance companies providing coverage through the SGLI 
     program to provide financial counseling and disclosure 
     information to family members of fallen soldiers. It would 
     also require an annual report to Congress by the VA to make 
     certain insurance companies are being responsive to military 
     families.
       It is critical that these insurance policies provide more 
     transparency, more disclosure, and more information for 
     military families. H.R. 5993 does that by guaranteeing the 
     families of our fallen heroes access to oral and written 
     financial counseling. This counseling would assist family 
     members in understanding their options so that they can make 
     sound fiscal decisions during a most stressful time.
       Thank you again for your support of our service members, 
     retirees, veterans, their families, and survivors. Our 
     contact, should you have any questions, is Kathleen Moakler, 
     Government Relations Director, at [email protected] 
     or 703.931.6632.
       The National Military Family Association is the leading 
     non-profit organization committed to improving the lives of 
     military families. Our over 40 years of service and 
     accomplishments have made us a trusted resource for families 
     and the Nation's leaders. As the only non-profit organization 
     that represents the families of the Army, Navy, Air Force, 
     Marine Corps, Coast Guard, and the Commissioned Corps of the 
     Public Health Service and the National Oceanic and 
     Atmospheric Administration, the Association protects benefits 
     vital to all families, including those of the deployed, 
     wounded, and fallen.
           Sincerely,
                                                       Mary Scott,
                                     Chairman, Board of Governors.

  Mr. FILNER. Mr. Speaker, at this time, I guess I thank the 
gentlelady. Within a day of the publicity that surrounded Prudential 
apparently not giving sufficient information, you had this bill. You 
moved very quickly and very decisively, and it is going to help all of 
the survivors and their families. Thank you so much for your quick 
action.
  I reserve the balance of my time.
  Mr. BUYER. Mr. Speaker, I rise in opposition, opposition to this 
bill.
  For that very moment, the chairman compliments the gentlelady for 
having legislation immediately upon a concern. It is so much like an 
American. We don't even have the patience to figure out where the 
problem is but let me tell you about our solution.
  Now, what we're supposed to do around this place is do a little 
homework, do a little investigation, find out what's going on, have the 
distillation of the facts, find out what the facts are in the first 
place. Oh, no, no, no. Let's run out there and act like we are ``doing 
something'' when we don't even know what the heck we're doing. It's the 
reason the American people get upset with us and they get upset with 
this institution; especially now, when you get so close to an election, 
you have to protect and guard yourself against politics over substance.

[[Page H7023]]

  This bill, by forcing it onto the floor at this moment in time, is 
exactly that. This bill condones a controversial practice the VA called 
retained asset, or alliance accounts, for paying Servicemembers' Group 
Life Insurance, SGLI, proceeds to the families of deceased 
servicemembers. Now, we all thought that the statute was being 
followed. It wasn't. Someone years ago down at the VA changed it.
  In the Veterans' Affairs Committee, we have not had adequate time to 
address the issues on this bill. There's no record on which we base and 
form policy decision or evaluate the views of the life insurance 
experts. None of us had the opportunity to do that.
  One of the executives from Prudential came by the office. We had a 
very good discussion about relevant concerns I can address a little bit 
later. The use of these accounts in place of the SGLI lump sum payment 
called for in the Federal statute is currently the subject of a Federal 
fraud lawsuit in Boston by five plaintiffs against the Prudential Life 
Insurance Company. Prudential is the VA's contractor managing the SGLI 
program and making the payments. New York's attorney general has 
launched an investigation of Prudential as well.
  My colleagues on the committee know next to nothing about a very 
complex issue, its history, the controversy surrounding it. Indeed, I 
would like to know more about it myself before having to even vote on 
it. I'm learning something new almost every day I deal with this issue. 
The issue requires careful deliberation by the committee. We should not 
have to base decisions on media reports in Bloomberg or The Washington 
Post.
  Ms. FOXX. Will the gentleman yield?
  Mr. BUYER. I yield to the gentlelady from North Carolina.
  Ms. FOXX. Mr. Speaker, it's my understanding that this bill is being 
brought to the floor in a rush without there even being any hearings in 
the committee.
  Mr. BUYER. Reclaiming my time, when we marked up the bill in the 
committee, I raised very pertinent issues. I sought to work with the 
author of the bill. She had no interest in working out an amendment on 
the language. I thought what would happen is, well, I won't offer the 
amendment in the committee. We'll work this matter out as we learn 
more.
  The chairman even spoke about this week we were to have done a 
hearing on this bill. We get notice on Friday that they want to bring 
it to the floor. We're supposed to be doing a hearing on the bill this 
week before we bring it to the floor. But what's happening is is this 
body, called Congress, is in a panic.
  I yield to the gentlelady.
  Ms. FOXX. Well, I think, again, we're seeing that the House Democrats 
are proving not only that they've run out of ideas but they've run out 
of the will to govern. They won't make a budget. They won't deal with 
these impending tax hikes that we're going to have. I heard you say on 
the floor a few minutes ago that 40 percent of the reservists are 
coming back without jobs, and all our friends across the aisle seem to 
want to do is to get home so they can campaign for their own job 
instead of doing something to remove the uncertainty that's keeping 
small businesses from hiring new employees, many of them veterans, many 
of them reservists coming back.
  We must do something about these tax hikes that are looming and 
provide some certainty for small businesses, and I hope you agree with 
that.
  Mr. BUYER. Reclaiming my time, the challenge before the body is we 
now have legislation before us which is on an issue which is now being 
thrown into the courts, and we've got a statute that's not being 
followed by the executive branch; and it is completely within the 
rights of Congress to speak, but we've got to be very careful. Do we 
understand the scope and issues at hand? I submit we do not, and we are 
eagerly rushing something onto the floor. Let me go a little bit 
further.
  My colleague Mrs. Halvorson argues that this bill does not change the 
existing payment authority and does not address the legality of 
retained asset accounts for SGLI purposes, but I'm also a lawyer, and I 
respectfully suggest that it may do just that. I am not alone in my 
view with regard to this concern because I have been talking with other 
lawyers about my legal analysis of this present challenge.
  After the markup, one of the representatives of one of the veterans 
service organizations, of whom I've had disagreements with over the 
years, came up to me and told me that he agreed with the concerns. 
Members of the committee actually regret that I didn't offer the 
amendment to actually strip the bill, and I guess I never thought that 
this would actually come to the floor until these matters got 
addressed.
  It's laudable to require the VA to counsel SGLI beneficiaries on 
their benefits, the payment methods available to them. It's very clear 
in the statute, very clear already in the statute, but this bill goes a 
lot further and specifically requires counseling about something the 
bill euphemistically terms, quote, maintaining the payment, end quote. 
Now, what is that? What do you mean ``maintaining the payment''? The 
statute is already very clear what you're to do with the money when it 
comes to widows and orphans or other beneficiaries. This is a reference 
to the retained asset account payment method without calling it that.
  I think it is reasonable to ask how Congress can tell the VA to 
counsel anyone about Prudential's practice that may be illegal without 
well informing them of what Prudential is doing may be illegal and is 
being challenged in a Federal class action today unless, of course, we 
change the law and expressly make the practice legal, which Mrs. 
Halvorson maintains she's not doing. But somehow, I don't think that 
full disclosure is going to occur.

                              {time}  1340

  I completely understand how my colleagues might find all this rather 
confusing, and I don't find it funny either.
  I'm also confused by Mr. Chairman's report statement after the 
Bloomberg article was released that he was outraged, and the VA should 
demand answers. Did we get answers, and now everything is all right? 
Did the VA's self-investigation resolve everything?
  The White House has also made a statement, calling this an 
unacceptable business practice. Have the unacceptable business 
practices been identified? Have they been stopped? Has something 
changed, and now Congress should mandate that the VA give specific 
counseling on the ``outrageous'' and the ``unacceptable'' business 
practice? That's what this legislation does.
  Mr. Speaker, this complex issue is directly before Congress in the 
form of H.R. 5993, as amended. We should not be effectively ratifying 
this practice by requiring the VA to counsel beneficiaries about it. 
Instead, we should give careful scrutiny and make sure we understand it 
sufficiently to decide whether to expressly authorize it in the law for 
the future. Our servicemembers and veterans and their families in the 
VA, Prudential, and life insurance experts should all have an 
opportunity to weigh in on the record. I want to make sure that it's 
clear and that I'm not taking a position for or against the practice of 
retained asset accounts.
  The real problem, as I see it, is that the retained asset accounts 
now, as they have been questioned, are receiving scrutiny and appear 
not to match the payment authorized in the United States Code. So when 
you pull out the United States Code--and we're talking about the 
present statute--so you turn to title 38, section 1790, and then you 
turn to (d). It says: ``The member may elect settlement of an insurance 
under this subchapter either in lump sum or in 36 equal monthly 
installments.'' It doesn't say anything in the statute about retained 
asset accounts. Now, why is that? Go back to legislative history. When 
this statute was written back in the mid-1960s, there as no such thing 
as a retained asset account.
  So what has changed? There is a commonly accepted business practice 
in America with regard to retained asset accounts. Now, in the latter 
part of the 1990s, the VA struck an agreement with Prudential then to 
adopt that business practice. But what they did is they adopted a 
business practice that is contradictory to the United States Code, the 
statute. So this bill before us is about to say, the VA should provide 
counsel to the beneficiaries about a business practice that is not even 
legal. That's like saying,

[[Page H7024]]

Okay, in title 10, it is illegal to smoke marijuana, but in another 
statute Congress is going to provide counseling on the proper use of an 
illegal substance. And you say, Steve that's crazy. You are absolutely 
right, that's crazy, and that's why this legislation before us today is 
crazy. We should not be saying we're going to provide counseling with 
regard to some agreement that the executive branch struck that's in 
contradiction to the statute.
  Now, you've got the VA and Prudential. Immediately they do a powwow. 
Oh, my gosh, we've got a problem. We've got to try to define this. The 
White House has made a statement. Ooh, it says ``unacceptable.'' We've 
got to figure out--come together and strike an agreement.
  This is Groundhog Day, Mr. Speaker. The agreement that the executive 
branch struck with an insurance company back in the latter part of the 
1990s was not authorized for them to do because the statute says how 
SGLI payments are to go directly to beneficiaries. It doesn't say you 
can do three or four other types of payment schedules. It only says two 
of them. You either give them a lump sum or you do 36 monthly 
installments. It's very clear.
  So this agreement is just as worthless as the agreement they struck 
in the 1990s when it comes to the law. I guess maybe it makes them feel 
better. Maybe they hope that it takes the heat off. This thing, this 
agreement is about politics, it is about substance and legality, and it 
is about public relations. But if you really want it to be about the 
law, then what we should do is look at the law; and we need to say, 
Okay, then maybe you need to amend the Code. If you have to amend the 
Code to say, We want to permit retained asset accounts, then that is, 
in fact, what we should be doing.

          U.S. Department of Veterans Affairs (VA) FACT SHEET

 Actions for Improving the Alliance Account Program, September 13, 2010

       VA takes seriously the concerns raised regarding the 
     Alliance Accounts (AA) and has reviewed the program to ensure 
     that beneficiaries are protected, being treated fairly, and 
     accorded the utmost care and respect. A full explanation of 
     terms up-front, education about options, and financial 
     counseling to assist in decision making will provide the 
     transparency that will continue to ensure confidence in this 
     important program.
       By the end of October, 2010, VA will make the following 
     modifications to ensure:
       All benefits due under Servicemembers' Group Life Insurance 
     (SGLI) or Veterans' Group Life Insurance (VGLI) policies are 
     received by the beneficiaries in a secure, timely manner.
       Beneficiaries are enabled in making deliberate and 
     responsible decisions with the assets they receive.
       Beneficiaries making financial decisions have been educated 
     and assisted in understanding the complex issues before them. 
     They will be made comfortable in competently managing 
     benefits in accordance with their own time lines.
       Options available to the beneficiaries will be clear, 
     competitive, and at no cost to the beneficiary.
       The entire settlement process is dignified and respectful 
     of the individuals involved.
       The specific approaches that VA, working in consultation 
     with other Agencies, has determined it will pursue in the 
     near term are:
       VA will provide better clarity of payment options by using 
     a new Claim Form that requires the beneficiary to 
     affirmatively choose one of three clear payment options:
       Lump Sum Alliance Account (Retained Asset Account).
       Lump Sum Payment--Paid out in full via a check sent to the 
     beneficiary. VA is exploring Electronic Funds Transfer (EFT).
       36 Monthly Installments--Paid out in full via monthly 
     installments, as mandated by law, sent to the beneficiary 
     (this three year payout option has always been available to 
     beneficiaries).
       If the beneficiary does not select an option, the SGLI 
     Program will utilize the AA. The AA provides immediate access 
     to funds, while permitting beneficiaries the time necessary 
     to study their options and make deliberate, responsible 
     financial decisions.
       In addition: A VA-supplied letter will be enclosed with 
     every Claim Form and every AA Kit that will explain in a 
     clear and complete manner:
       That the insurance proceeds have been deposited into an 
     interest bearing account at rates competitive with similar 
     types of ``demand accounts'' (e.g., checking, money market, 
     etc.).
       The current interest rate and the fact that the interest 
     rate may vary over time.
       That the beneficiary can immediately write a ``check'' for 
     the entire payment or any lesser amount.
       That AA funds are retained by Prudential until paid out.
       That while AA is not FDIC insured; it is backed by 
     Prudential and State Guaranty Associations. The National 
     Association of Insurance Commissioners has established the 
     following Web site for additional consumer information: 
     http://www.naic.org/consumer_
     military insurance.htm
       That free, professional independent financial counseling is 
     available to all beneficiaries for a period of two years or 
     as long as they have funds remaining in their AA.
       VA will also take the following actions:
       VA will require Prudential to conduct a follow up contact 
     with beneficiaries whose accounts remain open after six 
     months to confirm beneficiary understands the terms of the 
     account.
       All SGLI/VGLI related information, including FAQ's, Web 
     site information, handbooks, etc. will be modified to clearly 
     and completely explain all aspects of the AA and all options 
     available to the beneficiary.
       VA will clearly designate the source of correspondence by 
     removing the SGLI seal from all ``checks'', forms, and 
     correspondence and replacing it to show that it is from 
     Prudential, with the subtitle of ``Office of Servicemembers' 
     Group Life Insurance''.
       VA will identify additional opportunities to encourage 
     beneficiaries to use the free financial counseling service.
       VA will, in coordination with DoD, improve support to 
     Casualty Assistant Officers and Transition Assistance Program 
     (TAP) Personnel by helping to prepare additional training 
     materials and instruction.
       VA continues to carefully monitor this program and remains 
     committed to making any improvements necessary to ensure that 
     Servicemember and Veteran beneficiaries are well-protected.

  I reserve the balance of my time.
  Mr. FILNER. Mr. Speaker, I yield myself such time as I may consume.
  By the way, I didn't see a copy of the agreement. What is the date of 
that agreement, Mr. Buyer?
  I yield to the gentleman.
  Mr. BUYER. September 13, 2010.
  Mr. FILNER. I thank the gentleman from Indiana.
  The ranking member and I have no disagreement that this law before us 
is not about substance. There is an investigation ongoing. Our 
committee is investigating. We will have hearings on this. But it's not 
politics over substance. It's accountability transparency over 
substance. And all of the leading organizations which have to deal with 
the beneficiaries, with the survivors of those killed in action support 
this bill. The National Military Family Association, the Gold Star 
Wives, amongst others.
  So this legislation is about transparency. It's about accountability. 
It's about disclosure. It's about people understanding the process. 
This bill doesn't condone anything. It just says that those grief-
stricken survivors know what's happening to them under the procedure 
that we have. Whether it's a proper procedure, whether it's based on an 
illegal account is something that the courts are working out and we're 
investigating.
  Right now everybody just wants to know what is going on and to have 
the insurance company, Prudential, disclose everything in advance so a 
decision can be made by the grief-stricken survivors. That is all we 
are doing in this bill, and it is needed. It is, in fact, demanded by 
those who represent the survivors that we act quickly to give some 
measure of accountability and disclosure to those beneficiaries. We 
need this bill, and we need it now.
  I reserve the balance of my time.
  Mr. BUYER. I yield myself such time as I may consume.
  Here is our challenge. I don't know what about these other groups, 
Mr. Chairman, that you have had a chance to talk to. I just spoke to 
the new chairman of the American Legion.
  Mr. FILNER. Mr. Speaker, how much time does each side have?
  The SPEAKER pro tempore. The gentleman from California has 9\1/2\ 
minutes remaining. The gentleman from Indiana has 8\1/2\ minutes 
remaining.
  Mr. BUYER. I am going to take all of it. I will even take your time, 
if you will give it to me.
  You know, you can stand up and say, Well, this veterans group 
supports it, and this one doesn't. You cited the American Legion. I 
just spoke to a brand-new commander of the American Legion who supports 
my position, so I don't know what the disconnect is.
  I can assure you, now that I am speaking about the fact that there is 
a legal problem, the fact that I informed the executive of Prudential 
with regard to this way forward that you have signed with the VA does 
not get you out of the hot water that you are in. There is a legal 
problem here. And the four corners of the document that we have before 
us is actually legislation that uses this clever and artful language 
about maintaining the lump sum

[[Page H7025]]

payment. What do you mean, ``maintaining the lump sum payment''? It's 
almost like a code word for saying, We want to maintain our current 
business practice of the retained asset account because that's what the 
way forward agreement is. It's very clever. This is very wrong.
  Here is what we ought to do, Mr. Speaker. I have never done this 
before on the House floor with anyone in my 18 years, but I am going to 
ask this of Chairman Filner: Would the gentleman ask that this 
legislation be pulled from the floor at this time so we may work out 
the details rather than having this heated debate? You said that you 
would have a hearing on it. Let's go have a hearing. Let's work this 
out with our leading experts, and let's bring a work product to the 
floor that we can be proud of. And I want to ask the gentleman if he 
would withdraw this legislation.
  I yield to the gentleman.

                              {time}  1350

  Mr. FILNER. The gentleman stands behind Mrs. Halvorson's bill, and we 
will not withdraw it.
  Mr. BUYER. Well, all right. Reclaiming my time, this was a very good 
moment for bipartisanship, to actually bring a work product to the 
floor that we could all agree on. And I am greatly disappointed, Bob, 
that you made that judgment call. But this is not right. This isn't 
right at all.
  The suspension calendar, Mr. Speaker, is supposed to be for 
legislation that is noncontroversial. It is supposed to be for 
legislation that the parties have worked out in a collegial manner, not 
to take something for which there is utter and complete disagreement, 
not to take something that there have been no hearings on, not to take 
an issue that it now finds itself in attorney generals' investigations 
and class action lawsuits, and we are just going to, like, bring it to 
the floor, even though we are going to pass a statute that is in 
complete contradiction of an existing statute. What are we doing?
  I mean, this is really a time-out moment here. This is a time-out 
moment, Mr. Speaker. And it is very, very bothersome to me that 
something like this would be placed on the suspension calendar, 
especially when this was the week in which we were supposed to be 
holding hearings on it.
  I know, Mr. Speaker, that you are anxious to get out of here and you 
want us to adjourn for an election, but don't take legislation to the 
floor that is not properly prepared for the floor. And you have 
permitted that to occur, and that is not right. It is wrong, in my 
book.
  But you are the majority, and you have actually been able to show 
that you can do as you please, and the rules don't always matter, I 
guess, around here.
  But I want the Record to reflect my views on what is happening here. 
Also, I will file additional views with the bill and the report to 
explain in greater detail the legality of what I feel that we are 
facing, and I will do everything in my power to ensure that this bill 
does not become law until it is fixed.
  Mr. Speaker, I yield back the balance of my time.
  Mr. FILNER. Mr. Speaker, we had a little lecture on the suspension 
calendar, which is supposed to be items of consensus. This item was 
discussed and voted on by our committee. If I recall, there was one 
``no,'' the ranking member. There were no other ``no'' votes. The 
ranking member confuses his singular and personal opposition to the 
fact that, oh, I guess everybody disagrees with it. No, this came out 
of our committee with one ``no'' vote. So the gentleman just doesn't 
understand what consensus means. He thinks if he alone is against it--
as I recall, he was the only one in this whole body that voted against 
a truly interesting new way to approach financing, and that was 
advanced appropriations.
  Mr. Speaker, the gentleman gave us a lecture on suspension calendar 
and consensus. He was the only ``no'' vote. He was the only ``no'' vote 
when we had advance appropriations. Everybody else is wrong but the 
gentleman.
  This bill, as I said before, and as Mrs. Halvorson said very 
distinctly and very eloquently, is about disclosure, accountability, 
transparency. The survivors need to know what is going on.
  We will, as the gentleman requested, have and are pursuing the 
investigation. We are pursuing whether the so-called retained asset 
account is the legal structure that should happen. The VA is pursuing 
that. And we will get to that.
  But right now, right now, as men and women are dying in action, their 
survivors need to know what is going on. We can't wait for this process 
to go on and on and on and on, especially when they face a huge 
insurance company.
  The gentleman asked what organizations support us. The American 
Legion has a letter supporting us. I didn't hear any letter that the 
gentleman had. As Mrs. Halvorson read, the National Military Families 
Association supports this bill. And the Gold Star Wives of America, the 
preeminent group that works for the benefit of survivors of those who 
are killed in action, has sent us the following letter:
  ``In light of the recent news that insurance companies could 
potentially use group life insurance policies to profit from accounts 
it maintains for families of fallen soldiers, Gold Star Wives of 
America supports H.R. 5993. It would ensure that insurance companies 
authorized by VA to administer the SGLI accounts are fully open and 
honest about its practices for those policies on which so many 
servicemembers rely to ensure financial security for their families.
  ``The bill, the SAVINGS Act introduced by Representative Debbie 
Halvorson of Illinois, would mandate that the Secretary of Veterans 
Affairs require insurance companies that provide coverage through this 
program to offer financial counseling and improved disclosure of 
information to family members and survivors.
  ``It is critical that the options and information available for 
survivors offered under the SGLI program involve more disclosure and 
greater transparency. H.R. 5993 would do that by guaranteeing that 
survivors of our fallen heroes have access to oral and written 
financial counseling. These greater disclosure requirements and 
counseling would better help survivors to understand their options so 
that they make sound decisions during a stressful and sorrowful time.
  ``Gold Star Wives of America supports H.R. 5993 so that we can do 
everything in our power to protect the families and survivors of our 
fallen soldiers. Their loved ones have answered the call and their 
survivors deserve these protections.''

                                                Gold Star Wives of


                                                America, Inc.,

                                 Bellevue, NE, September 26, 2010.
     Chairman Bob Filner,
     Committee on Veterans' Affairs, Cannon House Office Building, 
         Washington, DC.
       In light of recent news that insurance companies could 
     potentially use group life insurance policies to profit from 
     accounts it maintains for the families of fallen soldiers, 
     Gold Star Wives of America, Inc supports H.R. 5993. H.R. 5993 
     would ensure that insurance companies authorized by VA to 
     administer SGLI accounts are fully open and honest about its 
     practices for these policies on which so many servicemembers 
     rely to ensure financial security for their families.
       H.R. 5993, the Securing America's Veterans Insurance Needs 
     and Goals (SAVINGS) Act of 2010, introduced by Representative 
     Debbie Halvorson, would mandate that the Secretary of 
     Veterans Affairs require insurance companies that provide 
     coverage through the Sevicemembers' Group Life Insurance 
     (SGLI) program, to offer financial counseling and improved 
     disclosure information to family members and survivors of 
     fallen soldiers. It would also require an annual report to 
     Congress by VA to ensure that insurance companies are being 
     responsive to military families and survivors and that the 
     Office of Survivors Assistance will be a greater resource in 
     this effort.
       It is critical that the options and information available 
     for survivors offered under the SGLI program involve more 
     disclosure and greater transparency. H.R. 5993 would do that 
     by guaranteeing that survivors of our fallen heroes have 
     access to oral and written financial counseling. This greater 
     disclosure requirements and counseling would better help 
     survivors to understand their options so that they can make 
     sound decisions during a stressful and sorrowful time.
       Gold Star Wives of America, Inc supports H.R. 5993 so that 
     we can do everything in our power to protect the families and 
     survivors of our fallen soldiers. Their loved ones have 
     answered the call and their survivors deserve these 
     protections.
           Respectfully,
                                                 Martha M. Didamo,
                                                      Board Chair,

  Mr. Speaker, in support of H.R. 5993, as amended, I am submitting 
letters of support from The American Legion, Veterans of Foreign Wars 
of the United States, Gold Star Wives of America, Inc., and the 
National Military Family Association.


[[Page H7026]]


                                              The American Legion,


                             Office of the National Commander,

                               Washington, DC, September 27, 2010.
     Hon. Debbie Halvorson,
     House of Representatives,
     Washington, DC.
       Dear Representative Halvorson: In light of recent news that 
     insurance companies contracted by the Department of Veterans 
     Affairs (VA) to administer the Servicemembers' Group Life 
     Insurance program (SGLI) could potentially use group life 
     insurance policies to obtain profits from the families of 
     fallen soldiers, The American Legion supports proposed 
     legislation which seeks to ensure that insurance companies 
     are open and honest about the policies on which so many 
     military families rely.
       The legislation you recently introduced, H.R. 5993, 
     Securing America's Veterans Insurance Needs and Goals 
     (SAVINGS) Act, would mandate the VA Secretary to require 
     those insurance companies offering coverage through the SGLI 
     program to provide the beneficiaries of fallen soldiers with 
     financial counseling and disclosure information. In addition, 
     this Act would obligate the VA to provide a report to 
     Congress annually to ensure that those insurance companies 
     are being responsive to military families.
       It is critical to insure complete transparency, full 
     disclosure, and increased information be afforded to military 
     families on insurance matters. This legislation would 
     guarantee the families of our fallen heroes have access to 
     oral and written financial counseling. This counseling would 
     better help family members understand their options so that 
     they can make sound fiscal decisions during a stressful and 
     harrowing period.
       The American Legion supports H.R. 5993 as introduced so 
     that we can protect the military families of our fallen 
     soldiers. However, The American Legion has additional 
     concerns not addressed in the original bill which are equally 
     as important.
       This legislation does not address Retained Asset Accounts 
     (RAA) for disbursement of benefits. This is a common practice 
     used by many insurers for distribution of benefits. However, 
     The American Legion is concerned this method of disbursement 
     may be a violation of Title 38 USC Sec. 1970(d) which 
     requires payments be in 36 monthly installments or one lump 
     sum. The practice should be either stopped or the law needs 
     to be changed. Of further concern to The American Legion is 
     that this legislation does not address the practice of the 
     insurance company executing the program making a profit on 
     the account after the death of a service member and actually 
     misrepresenting or over representing the ``interest bearing 
     account,'' benefit of the program to a payee.
       It is standard policy of the insurance industry to reinvest 
     the money not withdrawn by the payee and to collect interest 
     on that money. The insurer then passes on to the payee a 
     small amount of the interest. While legal and a common 
     industry practice, it should be forbidden by law in the case 
     of military members who have given their lives for the 
     Nation. Precedence has been made in setting aside veterans 
     and military in the case of health care insurance and other 
     entitlements due to military service. The American Legion 
     feels that ALL interest received on investments after 
     servicemember's death should be passed on to the payees of 
     the policy.
           Sincerely,
                                                 Jimmie L. Foster,
     National Commander.L
                                  ____

                                          Veterans of Foreign Wars


                                         of the United States,

                               Washington, DC, September 28, 2010.
     Hon. Deborah Halvorson,
     House of Representatives,
     Washington DC.
       Dear Congresswoman Halvorson: On behalf of the 2.1 million 
     members of the Veterans of Foreign Wars and its Auxiliaries, 
     I would like to offer our support for H.R. 5993, the Securing 
     America's Insurance Needs and Goals (SAVINGS) Act.
       In light of recent disclosures that insurance companies 
     could potentially profit from their holding of funds 
     guaranteed to the families of fallen soldiers through the 
     Veterans Group Life Insurance (VGLI) plan, we believe this 
     legislation is necessary to reassure families of the fallen 
     by ensuring insurance companies are open and honest about the 
     policies on which so many military families rely.
       H.R. 5993 would mandate that the Secretary of Veterans 
     Affairs require that insurance companies that provide 
     coverage through the VGLI program provide measures to ensure 
     transparency, financial counseling and disclosure information 
     to family members of fallen soldiers. This counseling, both 
     in writing and during in-person counseling sessions with 
     trained professionals, would better help family members 
     understand their options so that they can make sound fiscal 
     decisions during a stressful and harrowing period. It would 
     also require an annual report to Congress by the VA to ensure 
     that insurance companies are being responsive to military 
     families.
       Beneficiaries of the VGLI program have made tremendous 
     sacrifices, and we must do everything in our power to protect 
     them from any unscrupulous entities or practices that would 
     seek to take advantage of their tragic fortunes. The VFW 
     looks forward to working with you and your staff on this and 
     other measures to properly care for our veterans and their 
     families.
           Sincerely,

                                              Gerald T. Manar,

                                                  Deputy Director,
     National Veterans Service.
                                  ____

                                                Gold Star Wives of


                                                America, Inc.,

                                 Bellevue, NE, September 26, 2010.
     Chairman Bob Filner,
     House Committee on Veterans' Affairs, Washington, DC.
       In light of recent news that insurance companies could 
     potentially use group life insurance policies to profit from 
     accounts it maintains for the families of fallen soldiers, 
     Gold Star Wives of America, Inc supports H.R. 5993. H.R. 5993 
     would ensure that insurance companies authorized by VA to 
     administer SGLI accounts are fully open and honest about its 
     practices for these policies on which so many servicemembers 
     rely to ensure financial security for their families.
       H.R. 5993, the Securing America's Veterans Insurance Needs 
     and Goals (SAVINGS) Act of 2010, introduced by Representative 
     Debbie Halvorson, would mandate that the Secretary of 
     Veterans Affairs require insurance companies that provide 
     coverage through the Sevicemembers' Group Life Insurance 
     (SGLI) program, to offer financial counseling and improved 
     disclosure information to family members and survivors of 
     fallen soldiers. It would also require an annual report to 
     Congress by VA to ensure that insurance companies are being 
     responsive to military families and survivors and that the 
     Office of Survivors Assistance will be a greater resource in 
     this effort.
       It is critical that the options and information available 
     for survivors offered under the SGLI program involve more 
     disclosure and greater transparency. H.R. 5993 would do that 
     by guaranteeing that survivors of our fallen heroes have 
     access to oral and written financial counseling. This greater 
     disclosure requirements and counseling would better help 
     survivors to understand their options so that they can make 
     sound decisions during a stressful and sorrowful time.
       Gold Star Wives of America, Inc supports H.R. 5993 so that 
     we can do everything in our power to protect the families and 
     survivors of our fallen soldiers. Their loved ones have 
     answered the call and their survivors deserve these 
     protections.
           Respectfully,

                                             Martha M. Didamo,

     Board Chair,
                                  ____

                                          National Military Family


                                                  Association,

                               Alexandria, VA, September 23, 2010.
     Hon. Deborah L. Halvorson,
     House of Representatives,
     Washington, DC.
       Dear Representative Halvorson: The National Military Family 
     Association has long been an advocate for improving the 
     quality of life of our military family members, who have 
     sacrificed greatly in support of our Nation. We are writing 
     today in support of H.R. 5993 which seeks to ensure that 
     insurance companies provide appropriate information and 
     financial counseling to survivors who receive payments from 
     the Servicemembers Group Life Insurance (SGLI).
       H.R. 5993, the Securing America's Veterans Insurance Needs 
     and Goals (SAVINGS) Act, which you have introduced, would 
     mandate that the Secretary of Veterans' Affairs (VA) require 
     insurance companies providing coverage through the SGLI 
     program to provide financial counseling and disclosure 
     information to family members of fallen soldiers. It would 
     also require an annual report to Congress by the VA to make 
     certain insurance companies are being responsive to military 
     families.
       It is critical that these insurance policies provide more 
     transparency, more disclosure, and more information for 
     military families. H.R. 5993 does that by guaranteeing the 
     families of our fallen heroes access to oral and written 
     financial counseling. This counseling would assist family 
     members in understanding their options so that they can make 
     sound fiscal decisions during a most stressful time.
       Thank you again for your support of our service members, 
     retirees, veterans, their families, and survivors. Our 
     contact, should you have any questions, is Kathleen Moakler, 
     Government Relations Director.
       The National Military Family Association is the leading 
     non-profit organization committed to improving the lives of 
     military families. Our over 40 years of service and 
     accomplishments have made us a trusted resource for families 
     and the Nation's leaders. As the only non-profit organization 
     that represents the families of the Army, Navy, Air Force, 
     Marine Corps, Coast Guard, and the Commissioned Corps of the 
     Public Health Service and the National Oceanic and 
     Atmospheric Administration, the Association protects benefits 
     vital to all families, including those of the deployed, 
     wounded, and fallen.
           Sincerely,
                                                       Mary Scott,
                                     Chairman, Board of Governors.

  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from California (Mr. Filner) that the House suspend the rules 
and pass the bill, H.R. 5993, as amended.

[[Page H7027]]

  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. BUYER. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.

                          ____________________