[House Report 105-134]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    105-134
_______________________________________________________________________


 
                    FEGLI DOMESTIC RELATIONS ORDERS

                                _______
                                

 June 18, 1997.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

_______________________________________________________________________


  Mr. Burton of Indiana, from the Committee on Government Reform and 
                   Oversight, submitted the following

                              R E P O R T

                        [To accompany H.R. 1316]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Government Reform and Oversight, to whom 
was referred the bill (H.R. 1316) to amend chapter 87 of title 
5, United States Code, with respect to the order of precedence 
to be applied in the payment of life insurance benefits, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.

                                CONTENTS

  I. Background and need for The Legislation..........................2
 II. Legislative Hearings and Committee Actions.......................3
III. Committee Hearings and Written Testimony.........................3
 IV. Explanation of the Bill..........................................3
  V. Compliance with Rule XI..........................................3
 VI. Budget Analysis and Projections..................................3
VII. Cost Estimate of the Congressional Budget Office.................4
VIII.Specific Constitutional Authority................................4

 IX. Changes in Existing Law..........................................4
  X. Committee Recommendation.........................................6
 XI. Congressional Accountability Act; Public Law 104-1...............6
XII. Federal Advisory Committee Act (5 U.S.C. App.) Section 5(b)......6
XIII.Unfunded Mandates Reform Act; Public Law 104-4, Section 423......6

      The amendment is as follows:
      Strike out all after the enacting clause and insert in 
lieu thereof the following:

SECTION 1. DOMESTIC RELATIONS ORDERS.

    Section 8705 of title 5, United States Code, is amended--
          (1) in subsection (a) by striking ``(a) The'' and inserting 
        ``(a) Except as provided in subsection (e), the''; and
          (2) by adding at the end the following:
  ``(e)(1) Any amount which would otherwise be paid to a person 
determined under the order of precedence named by subsection (a) shall 
be paid (in whole or in part) by the Office to another person if and to 
the extent expressly provided for in the terms of any court decree of 
divorce, annulment, or legal separation, or the terms of any court 
order or court-approved property settlement agreement incident to any 
court decree of divorce, annulment, or legal separation.
  ``(2) For purposes of this subsection, a decree, order, or agreement 
referred to in paragraph (1) shall not be effective unless it is 
received, before the date of the covered employee's death, by the 
employing agency or, if the employee has separated from service, by the 
Office.
  ``(3) A designation under this subsection with respect to any person 
may not be changed except--
          ``(A) with the written consent of such person, if received as 
        described in paragraph (2); or
          ``(B) by modification of the decree, order, or agreement, as 
        the case may be, if received as described in paragraph (2).
  ``(4) The Office shall prescribe any regulations necessary to carry 
out this subsection, including regulations for the application of this 
subsection in the event that 2 or more decrees, orders, or agreements, 
are received with respect to the same amount.''.

SEC. 2. DIRECTED ASSIGNMENT.

  Section 8706(e) of title 5, United States Code, is amended--
          (1) by striking ``(e)'' and inserting ``(e)(1)''; and
          (2) by adding at the end the following:
  ``(2) A court decree of divorce, annulment, or legal separation, or 
the terms of a court-approved property settlement agreement incident to 
any court decree of divorce, annulment, or legal separation, may direct 
that an insured employee or former employee make an irrevocable 
assignment of the employee's or former employee's incidents of 
ownership in insurance under this chapter (if there is no previous 
assignment) to the person specified in the court order or court-
approved property settlement agreement.''.

                      Short Summary of Legislation

    H.R. 1316, as amended by the Committee, amends 5 U.S.C. 
Sec. Sec. 8705 and 8706. It directs the Office of Personnel 
Management (OPM) to obey certain domestic relations orders when 
paying the proceeds of life insurance policies under the 
Federal Employees Group Life Insurance program (FEGLI) and 
permits courts to direct the assignment of such policies to 
individuals specified in domestic relations orders.

               I. Background and Need for the Legislation

    H.R. 1316 was introduced by Mr. Collins of Georgia to 
address an inequity in the Federal Employees Group Life 
Insurance program (FEGLI). Under current law, domestic 
relations orders, such as divorce decrees, or property 
settlement agreements do not affect the payment of life 
insurance proceeds. Instead, when the policyholder dies, the 
proceeds are paid to the beneficiary designated by the 
policyholder, if any, or to other individuals as specified by 
statute. This is required by 5 U.S.C. Sec. 8705.
    H.R. 1316 requires OPM to pay the proceeds in accordance 
with certain domestic relations orders or property settlements. 
This is similar to the law's treatment of retirement annuities, 
which OPM must allocate in accordance with divorce decrees.
    Because an employee could still frustrate the court order 
by terminating the policy, the bill was amended in committee to 
allow courts to direct the employee to assign the policy to a 
specific individual.

             II. Legislative Hearings and Committee Actions

    H.R. 1316 was introduced on April 14, 1997 by the Honorable 
Mac Collins (R-GA). The bill was referred to the Committee on 
Government Reform and Oversight on April 14, 1997, and it was 
referred to the Subcommittee on Civil Service on April 15, 
1997. The Subcommittee held a mark up on June 10, 1997. No 
amendments were offered, and the measure was ordered favorably 
reported to the full Committee by a voice vote. On June 11, 
1997, the Committee on Government Reform and Oversight met to 
consider the bill. Representative Mica offered an amendment, 
which was approved by voice vote. Under this amendment, 
employees may be required to irrevocably assign FEGLI policies 
to an individual specified in a domestic relations order or 
court-approved property settlement agreement. The policy cannot 
be terminated by the employee. The Committee favorably reported 
the bill, as amended, to the full House by voice vote.

             III. Committee Hearings and Written Testimony

    The committee held no hearings and received no written 
testimony.

  IV. Explanation of the Bill as Reported: Section-by-Section Analysis

    Section 1. This section amends 5 U.S.C. Sec. 8705 to direct 
OPM to pay the proceeds of group life and group accidental 
death insurance under the Federal Employees Group Life 
Insurance (FEGLI) program in accordance with divorce decrees, 
other domestic relations orders, and court-approved property 
settlement agreements. To be effective, the order or agreement 
must be received before the death of the employee or former by 
the employing agency or, in the case of a former employee, the 
Office of Personnel Management.
    Section 2. This section amends 5 U.S.C. Sec. 8706 to permit 
courts to order employees or former employees to irrevocably 
assign a FEGLI policy to a person specified in a domestic 
relations order or court-approved property settlement 
agreement.

                       V. Compliance With Rule XI

    Pursuant to rule XI, clause 2(l)(3) of the Rules of the 
House of Representatives, under the authority of rule X, clause 
2(b)(1) and clause 3(f), the results and findings from 
committee oversight activities are incorporated in the bill and 
this report.

                  VI. Budget Analysis and Projections

    H.R. 1316, as amended, provides for no new authorization, 
budget authority, or tax expenditures. Consequently, the 
provisions of section 308(a) of the Congressional Budget Act 
are not applicable.

         VII. Cost Estimate of the Congressional Budget Office

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 18, 1997.
Hon. Dan Burton,
Chairman, Committee on Government Reform and Oversight,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget office has 
prepared the enclosed cost estimate for H.R. 1316, a bill to 
modify the procedures for determining the beneficiary of 
federal life insurance payments.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Paul 
Cullinan.
            Sincerely,
                                           Paul Van deWater
                                             (For June E. O'Neill).

H.R. 1316--A bill to amend chapter 87 of title 5, United States Code, 
        with respect to the order of precedence to be applied in the 
        payment of life insurance benefits

    CBO estimates that enacting this bill would have no effect 
on the federal budget. Because the bill would not affect direct 
spending or receipts, pay-as-you-go procedures would not apply. 
H.R. 1316 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act of 1995 
and would not affect the budgets of state, local, or tribal 
governments.
    The bill would modify the order of precedence used in the 
Federal Employee Government Life Insurance program in 
determining who should receive benefit payments. Under current 
law, the designated beneficiary of the employee's policy has 
the first opportunity for receiving the payments, regardless of 
that individual's relationship to the insured party at the time 
of the employee's death. H.R. 1316 would change the precedence 
if there existed a court decree of divorce, annulment, or legal 
separation or a court order or court-approved property 
settlement agreement incident to any court decree of divorce, 
annulment, or separation that expressly provides for another 
individual to receive the payments. Such decrees or agreements 
would effect a change in precedence only if filed with the 
employee's agency or the Office of Personnel Management before 
the insured's death.
    The CBO staff contact for this estimate is Paul Cullinan, 
who can be reached at 226-2820. This estimate was approved by 
Paul N. Van de Water, Assistant Director for Budget Analysis.

      VIII. Specific Constitutional Authority for This Legislation

    Clauses 1 and 18 of Article 1, Sec. 8 of the Constitution 
grant Congress the power to enact this law.

       IX. Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3 of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, existing law in which no change 
is proposed is shown in roman):

               CHAPTER 87 OF TITLE 5, UNITED STATES CODE

                       CHAPTER 87--LIFE INSURANCE

          * * * * * * *

Sec. 8705. Death claims; order of precedence; escheat

  [(a) The] (a) Except as provided in subsection (e), the 
amount of group life insurance and group accidental death 
insurance in force on an employee at the date of his death 
shall be paid, on the establishment of a valid claim, to the 
person or persons surviving at the date of his death, in the 
following order of precedence:
          * * * * * * *
  (e)(1) Any amount which would otherwise be paid to a person 
determined under the order of precedence named by subsection 
(a) shall be paid (in whole or in part) by the Office to 
another person if and to the extent expressly provided for in 
the terms of any court decree of divorce, annulment, or legal 
separation, or the terms of any court order or court-approved 
property settlement agreement incident to any court decree of 
divorce, annulment, or legal separation.
  (2) For purposes of this subsection, a decree, order, or 
agreement referred to in paragraph (1) shall not be effective 
unless it is received, before the date of the covered 
employee's death, by the employing agency or, if the employee 
has separated from service, by the Office.
  (3) A designation under this subsection with respect to any 
person may not be changed except--
          (A) with the written consent of such person, if 
        received as described in paragraph (2); or
          (B) by modification of the decree, order, or 
        agreement, as the case may be, if received as described 
        in paragraph (2).
  (4) The Office shall prescribe any regulations necessary to 
carry out this subsection, including regulations for the 
application of this subsection in the event that 2 or more 
decrees, orders, or agreements, are received with respect to 
the same amount.

Sec. 8706. Termination of insurance; assignment of ownership

  (a) * * *
          * * * * * * *
  (e)(1) Under regulations prescribed by the Office, each 
policy purchased under this chapter shall provide that an 
insured employee or former employee may make an irrevocable 
assignment of the employee's or former employee's incidents of 
ownership in the policy.
  (2) A court decree of divorce, annulment, or legal 
separation, or the terms of a court-approved property 
settlement agreement incident to any court decree of divorce, 
annulment, or legal separation, may direct that an insured 
employee or former employee make an irrevocable assignment of 
the employee's or former employee's incidents of ownership in 
insurance under this chapter (if there is no previous 
assignment) to the person specified in the court order or 
court-approved property settlement agreement.
          * * * * * * *

                      X. Committee Recommendation

    On June 11, 1997, a quorum being present, the Committee 
ordered the bill, as amended, favorably reported.

Committee on Government Reform and Oversight--104th Congress Rollcall

    Date: June 11, 1997.
    Final Passage of H.R. 1316, as amended.
    Offered by: Hon. John L. Mica (R-FL).
    Voice Vote: yea.

    XI. Congressional Accountability Act; Public Law 104-1; Section 
                               102(B)(3)

    The amendments made by H.R. 1316 will apply to employees 
and former employees of the legislative branch who participate 
in the Federal Employees Group Life Insurance program to the 
same extent as it applies to other participating employees.

   XII. Federal Advisory Committee Act (5 U.S.C. App.), Section 5(b)

    The Committee finds that section 5(b) of Title 5 App., 
United States Code, is not applicable because this legislation 
does not authorize the establishment of any advisory committee.

   XIII. Unfunded Mandates Reform Act; Public Law 104-4, Section 423

    The Committee finds that the legislation does not impose 
any Federal mandates within the meaning of section 423 of the 
Unfunded Mandates Reform Act (PL 104-4).

                                
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