[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.
____________________