[House Report 117-463]
[From the U.S. Government Publishing Office]
117th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 117-463
======================================================================
FASTER PAYMENTS TO VETERANS' SURVIVORS ACT OF 2022
_______
September 13, 2022.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Takano, from the Committee on Veterans' Affairs, submitted the
following
R E P O R T
[To accompany H.R. 8260]
The Committee on Veterans' Affairs, to whom was referred
the bill (H.R. 8260) to amend title 38, United States Code, to
shorten the timeframe for designation of benefits under
Department of Veterans Affairs life insurance programs, to
improve the treatment of undisbursed life insurance benefits by
the Department of Veterans Affairs, and for other purposes,
having considered the same, reports favorably thereon without
amendment and recommends that the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for Legislation.............................. 2
Hearings......................................................... 2
Subcommittee Consideration....................................... 3
Committee Consideration.......................................... 3
Committee Votes.................................................. 3
Section-by-Section Description................................... 3
Congressional Budget Office Cost Estimate........................ 4
Committee Oversight Findings..................................... 5
Constitutional Authority Statement............................... 5
Earmark Statement................................................ 5
Federal Mandates Statement....................................... 5
Advisory Committee Statement..................................... 5
Performance Goals................................................ 5
Applicability to Legislative Branch.............................. 5
Statement on Duplication of Federal Programs..................... 5
Ramseyer Submission.............................................. 6
Purpose and Summary
This legislation, will improve processes at the Department
of Veterans Affairs (VA) for identifying, locating, and paying
hard-to-find survivors of recently deceased veterans the life
insurance benefits they are owed.
The bill directs the Department to improve and better
publicize an online tool veterans' families can use to search
for past-due benefits, expands internal and external data
sources VA uses to track down hard-to-find beneficiaries, and
ensures the Department is adequately staffed to perform these
searches. It also authorizes a shorter timeframe in which VA
may designate alternate beneficiaries for two specific VA life
insurance programs and ensures that the procedures for paying
alternate beneficiaries are consistent across VA life insurance
programs. Lastly, the bill requires a report to Congress on its
progress in carrying out all required improvements within 180
days of enactment.
Background and Need for Legislation
When a veteran dies, the surviving spouse, child, family
member, or other next of kin is often owed certain life
insurance benefits. VA struggles to identify, locate, and pay
some of these beneficiaries in a timely fashion. According to
VA, as of September 30, 2022, the Department owed more than
$155 million in undisbursed life insurance proceeds to nearly
15,000 individuals. Nearly 10% of this money had been owed for
more than 5 years.\1\
---------------------------------------------------------------------------
\1\Email from Office of Congressional and Legislative Affairs,
Department of Veterans Affairs, to Committee on Veterans' Affairs Staff
(March 25, 2022).
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This legislation ensures VA will make necessary
improvements to expedite life insurance payments to veterans'
beneficiaries. The survivors and families of deceased veterans
often face financial hardship, and timely payment are,
therefore, critical.
Hearings
On March 30, 2022, the Subcommittee on Oversight and
Investigations conducted a legislative hearing on various bills
introduced during the 117th Congress, including a discussion
draft of H.R. 8260. The following witnesses testified: Mr.
Edward Murray, Principal Deputy Assistant Secretary, Office of
Management, U.S. Department of Veterans Affairs; Ms. Maryanne
Donaghy, Assistant Secretary, Office of Accountability and
Whistleblower Protection, U.S. Department of Veterans Affairs;
Mr. Harvey Johnson, Deputy Assistant Secretary, Office of
Resolution Management, Diversity & Inclusion, U.S. Department
of Veterans Affairs; Mr. Dan Keenaghan, Executive Director, VA
Insurance Service, Veterans Benefits Administration, U.S.
Department of Veterans Affairs; Ms. Jennifer Adams, Executive
Director, Network Management, Office of Community Care,
Veterans Health Administration, U.S. Department of Veterans
Affairs; Mr. Christopher Wilber, Acting Assistant Inspector
General for Management and Administration, Office of Inspector
General, U.S. Department of Veterans Affairs; Mr. Seto
Bagdoyan, Director of Forensic Audits and Investigative
Service, Government Accountability Office; Ms. Tiffany Ellett,
Health Policy Coordinator, The American Legion, Mr. Patrick
Murray, Legislative Director, Veterans of Foreign Wars; Ms.
Jennifer Dane, Chief Executive Officer and Executive Director,
Modern Military Association of America; and Lindsay Church,
Executive Director and Co-Founder, Minority Veterans of
America.
Subcommittee Consideration
H.R. 8260 was not considered before the Subcommittee on
Oversight and Investigations.
Committee Consideration
On July 19, 2022, the full Committee met in open session, a
quorum being present, to consider H.R. 8260. The Committee
ordered that H.R. 8260 be favorably reported to the House of
Representatives. The measure was agreed to by voice vote.
Committee Votes
In compliance with clause 3(b) of rule XIII of the House of
Representatives, H.R. 8260 was reported by voice vote with a
majority quorum present. There was no request for a recorded
vote.
Section-by-Section Description
Section 1--Short title
This Act may be cited as the ``Faster Payments to Veterans'
Survivors Act of 2022.''
Section 2--Timeframe for designation of alternate beneficiaries and
payment of benefits under Department of Veterans Affairs life
insurance programs
The timeframes in which VA is authorized to designate and
pay appropriate alternate insurance beneficiaries is shortened
from 2 years to 1 year and to pay a person the Secretary has
determined is equitably entitled thereto such payment from 4
years to 2 years for two VA life insurance programs, National
Service Life Insurance and United States Government Life
Insurance. These changes, which conform to timeframes found
elsewhere in title 38, are effective for survivors of veterans
whose death occurred within the date that is two years before
enactment.
Section 3--Beneficiary designation process under Department of Veterans
Affairs life insurance programs
The beneficiary designation process and order of payment to
by-law beneficiaries are revised for two VA life insurance
programs, National Service Life Insurance and United States
Government Life Insurance, to conform with the beneficiary
designation process and order of payment to by-law
beneficiaries found elsewhere in title 38. These modifications
will ensure procedures for paying contingent or alternate
beneficiaries are uniformly applied and consistent between VA
life insurance programs.
Section 4--Department of Veterans Affairs improvements of treatment of
undisbursed life insurance benefits
(a) Improvement of Processes--The Secretary of Veterans
Affairs is directed to improve VA processes for identifying,
locating, and paying hard-to-find beneficiaries of VA life
insurance policies. Required process improvements include
improving and better publicizing an online tool veterans'
families can use to search for money they may be owed;
expanding internal and external data sources VA uses to
identify and locate hard-to-find beneficiaries; and ensuring
the Department has adequate staff to conduct this research,
with a goal of disbursing all unpaid life insurance benefits
within two years of enactment.
(b) Sense of Congress--Congress conveys that the Secretary
of Veterans Affairs should work with interagency partners to
determine the types of records, reports, and other materials
that may be needed to better identify, locate, and pay hard-to-
find beneficiaries the VA life insurance benefits they are
owed.
(c) Report--A report on VA's progress in carrying out the
provisions of the legislation is required within 180 days of
enactment.
(d) Undisbursed Funds Defined--The term ``undisbursed life
insurance benefits'' is defined.
Congressional Budget Office Cost Estimate
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
for H.R. 8260 provided by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974:
According to the Congressional Budget Office estimate,
enacting H.R. 8260 would not significantly increase on-budget
deficits over the 2022-2032 period or in any of the four
consecutive 10-year periods beginning in 2033.
CBO'S ESTIMATE OF THE STATUTORY PAY-AS-YOU-GO EFFECTS OF H.R. 8260, THE FASTER PAYMENTS TO VETERANS' SURVIVORS ACT OF 2022, AS POSTED TO THE WEBSITE OF
THE CLERK OF THE HOUSE ON SEPTEMBER 9, 2022
(https://docs.house.gov/billsthisweek/20220912/BILLS-117hr8260-SUS.pdf)
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By fiscal year, millions of dollars--
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2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2022-2027 2022-2032
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Net Increase or Decrease (-) in the Deficit
Pay-As-You-Go Effect...................... 0 85 -28 -19 -14 -9 -9 -4 -1 -1 0 15 0
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The Statutory Pay-As-You-Go Act of 2010 establishes budget-
reporting and enforcement procedures for legislation affecting
direct spending or revenues. The net changes in outlays that
are subject to those procedures are shown here. Enacting H.R.
8260 would not significantly increase on-budget deficits in any
of the four consecutive 10-year periods beginning in 2033.
H.R. 8260 would make changes to life insurance policies for
World War I and World War II veterans. The bill would shorten
the time frame in which the Department of Veterans Affairs (VA)
is required to contact and pay alternative beneficiaries of
such life insurance policies.
On September 9, 2022, CBO transmitted a table with
estimates for legislation that will be considered under
suspension of the Rules of the House of Representatives during
the week of September 12, 2022. See https://www.cbo.gov/
publication/58451. That table included an estimate that H.R.
8260 would increase direct spending by more than $500,000 over
the 2022-2023 period. The estimate has been revised on the
basis of information received from VA after the previous table
was posted.
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII and clause
(2)(b)(1) of rule X of the Rules of the House of
Representatives, the Committee's oversight findings and
recommendations are reflected in the descriptive portions of
this report.
Constitutional Authority Statement
Pursuant to Article I, section 8 of the United States
Constitution, H.R. 8260 is authorized by Congress' power to
``provide for the common Defense and general Welfare of the
United States.''
Earmark Statement
H.R. 8260 does not contain any Congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI of the Rules of the House of
Representatives.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates regarding H.R. 8260 prepared by the Director of the
Congressional Budget Office pursuant to section 423 of the
Unfunded Mandates Reform Act.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act would be created by H.R.
8260.
Performance Goals
In accordance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the Committee's performance
goals and objectives are to shorten the timeframe for
designation of benefits under Department of Veterans Affairs
life insurance programs and to improve the treatment of
undisbursed life insurance benefits by the Department of
Veterans Affairs.
Applicability to Legislative Branch
The Committee finds that H.R. 8260 does not relate to the
terms and condition of employment or access to public services
or accommodations within the meaning of section 102(b)(3) of
the Congressional Accountability Act.
Statement on Duplication of Federal Programs
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, the Committee finds that no provision
of H.R. 8260 establishes or reauthorizes a program of the
Federal Government known to be duplicative of another Federal
program, a program that was included in any report from the
Government Accountability Office to Congress pursuant to
section 21 of Public Law 111-139, or a program related to a
program identified in the most recent Catalog of Federal
Domestic Assistance.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) 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, and existing law in which no
change is proposed is shown in roman):
TITLE 38, UNITED STATES CODE
* * * * * * *
PART II--GENERAL BENEFITS
* * * * * * *
CHAPTER 19--INSURANCE
SUBCHAPTER I--NATIONAL SERVICE LIFE INSURANCE
Sec.
1901. Definitions.
* * * * * * *
SUBCHAPTER II--UNITED STATES GOVERNMENT LIFE INSURANCE
* * * * * * *
[1949. Change of beneficiary.]
1949. Beneficiaries.
* * * * * * *
SUBCHAPTER I--NATIONAL SERVICE LIFE INSURANCE
* * * * * * *
Sec. 1917. Insurance maturing on or after August 1, 1946
[(a) The insured shall have the right to designate the
beneficiary or beneficiaries of insurance maturing on or after
August 1, 1946, and shall, subject to regulations, at all times
have the right to change the beneficiary or beneficiaries of
such insurance without the consent of such beneficiary or
beneficiaries.]
(a)(1) A person who enrolls in insurance maturing on or after
August 1, 1946, may designate a beneficiary of the insurance
policy. The insured shall, subject to regulations, at all times
have the right to change the beneficiary or beneficiaries of
such insurance without the consent of such beneficiary or
beneficiaries.
(2) If a person enrolled in insurance maturing on or after
August 1, 1946, does not designate a beneficiary under
paragraph (1) before the veteran dies, or if a designated
beneficiary predeceases the veteran, the Secretary shall
determine the beneficiary in the following order:
(A) The surviving spouse of the insured person.
(B) The children of the insured person and
descendants of deceased children by representation.
(C) The parents of the insured person or the
survivors of the parents.
(D) The duly appointed executor or administrator of
the estate of the insured person.
(E) Other next of kin of the insured person entitled
under the laws of domicile of the insured person at the
time of the death of the insured person.
(b) Insurance maturing on or after August 1, 1946, shall be
payable in accordance with the following optional modes of
settlement:
(1) In one sum.
(2) In equal monthly installments of from thirty-six
to two hundred and forty in number, in multiples of
twelve.
(3) In equal monthly installments for one hundred and
twenty months certain with such payments continuing
during the remaining lifetime of the first beneficiary.
(4) As a refund life income in monthly installments
payable for such period certain as may be required in
order that the sum of the installments certain,
including a last installment of such reduced amount as
may be necessary, shall equal the face value of the
contract, less any indebtedness, with such payments
continuing throughout the lifetime of the first
beneficiary; however, such optional settlement shall
not be available in any case in which such settlement
would result in payments of installments over a shorter
period than one hundred and twenty months.
(c) Except as provided in the second and third sentences of
this subsection, unless the insured elects some other mode of
settlement, such insurance shall be payable to the designated
beneficiary or beneficiaries in thirty-six equal monthly
installments. The first beneficiary may elect to receive
payment under any option which provides for payment over a
longer period of time than the option elected by the insured,
or if no option has been elected by the insured, in excess of
thirty-six months. In the case of insurance maturing after
September 30, 1981, and for which no option has been elected by
the insured, the first beneficiary may elect to receive payment
in one sum. If the option selected requires payment to any one
beneficiary of monthly installments of less than $10, the
amount payable to such beneficiary shall be paid in such
maximum number of monthly installments as are a multiple of
twelve as will provide a monthly installment of not less than
$10. If the present value of the amount payable at the time any
person initially becomes entitled to payment thereof is not
sufficient to pay at least twelve monthly installments of not
less than $10 each, such amount shall be payable in one sum.
Options (3) and (4) shall not be available if any firm,
corporation, legal entity (including the estate of the
insured), or trustee is beneficiary.
(d) If the beneficiary of such insurance is entitled to a
lump-sum settlement but elects some other mode of settlement
and dies before receiving all the benefits due and payable
under such mode of settlement, the present value of the
remaining unpaid amount shall be payable to the estate of the
beneficiary. If no beneficiary is designated by the insured, or
if the designated beneficiary does not survive the insured, or
if a designated beneficiary not entitled to a lump-sum
settlement survives the insured, and dies before receiving all
the benefits due and payable, then the commuted value of the
remaining unpaid insurance (whether accrued or not) shall be
paid in one sum to the estate of the insured. In no event shall
there be any payment to the estate of the insured or of the
beneficiary of any sums unless it is shown that any sums paid
will not escheat.
(e) Under such regulations as the Secretary may promulgate,
the cash surrender value of any policy of insurance or the
proceeds of an endowment contract which matures by reason of
completion of the endowment period may be paid to the insured
under option (2) or (4) of this section. All settlements under
option (4), however, shall be calculated on the basis of The
Annuity Table for 1949. If the option selected requires payment
of monthly installments of less than $10, the amount payable
shall be paid in such maximum number of monthly installments as
are a multiple of twelve as will provide a monthly installment
of not less than $10.
(f)(1) Following the death of the insured and in a case not
covered by subsection (d)--
(A) if the first beneficiary otherwise entitled to
payment of the insurance does not make a claim for such
payment within [two years] one year after the death of
the insured, payment may be made to another beneficiary
designated by the insured, in the order of precedence
as designated by the insured, as if the first
beneficiary had predeceased the insured; and
(B) if, within [four] two years after the death of
the insured, no claim has been filed by a person
designated by the insured as a beneficiary and the
Secretary has not received any notice in writing that
any such claim will be made, payment may
(notwithstanding any other provision of law) be made to
such person as may in the judgment of the Secretary be
equitably entitled thereto.
(2) Payment of insurance under paragraph (1) shall be a bar
to recovery by any other person.
* * * * * * *
SUBCHAPTER II--UNITED STATES GOVERNMENT LIFE INSURANCE
* * * * * * *
[Sec. 1949. Change of beneficiary
[Subject to regulations, the insured shall at all times have
the right to change the beneficiary or beneficiaries of a
United States Government life insurance policy without the
consent of such beneficiary or beneficiaries.]
Sec. 1949. Beneficiaries
(a) Designation.--A person who enrolls in United States
Government life insurance may designate a beneficiary of the
insurance policy. Subject to regulations, the insured person
shall at all times have the right to change the beneficiary or
beneficiaries of a United States Government life insurance
policy without the consent of such beneficiary or
beneficiaries.
(b) Determination in Cases of Non-designation.--If a person
enrolled in United States Government life insurance does not
designate a beneficiary under subsection (a) before the insured
person dies, or if a designated beneficiary predeceases the
insured person, the Secretary shall determine the beneficiary
in the following order:
(1) The surviving spouse of the insured person.
(2) The children of the insured person and
descendants of deceased children by representation.
(3) The parents of the insured person or the
survivors of the parents.
(4) The duly appointed executor or administrator of
the estate of the insured person.
(5) Other next of kin of the insured person entitled
under the laws of domicile of the insured person at the
time of the death of the insured person.
* * * * * * *
Sec. 1952. Optional settlement
(a) The Secretary may provide in insurance contracts for
optional settlements, to be selected by the insured, whereby
such insurance may be made payable either in one sum or in
installments for thirty-six months or more. A provision may
also be included in such contracts authorizing the beneficiary
to elect to receive payment of the insurance in installments
for thirty-six months or more, but only if the insured has not
exercised the right of election as provided in this subchapter.
Even though the insured may have exercised the right of
election the beneficiary may elect to receive such insurance in
installments spread over a greater period of time than that
selected by the insured. Notwithstanding any provision to the
contrary in any insurance contract, the beneficiary may, in the
case of insurance maturing after September 30, 1981, and for
which the insured has not exercised the right of election of
the insured as provided in this subchapter, elect to receive
payment of the insurance in one sum.
(b) Under such regulations as the Secretary may promulgate,
the cash surrender value of any policy of insurance or the
proceeds of an endowment contract which matures by reason of
completion of the endowment period may be paid to the insured
(1) in equal monthly installments of from thirty-six to two
hundred and forty in number, in multiples of twelve; or (2) as
a refund life income in monthly installments payable for such
periods certain as may be required in order that the sum of the
installments certain, including a last installment of such
reduced amount as may be necessary, shall equal the cash value
of the contract, less any indebtedness, with such payments
continuing throughout the lifetime of the insured. However, all
settlements under option (2) above shall be calculated on the
basis of The Annuity Table for 1949. If the option selected
requires payment of monthly installments of less than $10, the
amount payable shall be paid in such maximum number of monthly
installments as are a multiple of twelve as will provide a
monthly installment of not less than $10.
(c)(1) Following the death of the insured and in a case not
covered by section 1950 of this title--
(A) if the first beneficiary otherwise entitled to
payment of the insurance does not make a claim for such
payment within [two years] one year after the death of
the insured, payment may be made to another beneficiary
designated by the insured, in the order of precedence
as designated by the insured, as if the first
beneficiary had predeceased the insured; and
(B) if, within [four] two years after the death of
the insured, no claim has been filed by a person
designated by the insured as a beneficiary and the
Secretary has not received any notice in writing that
any such claim will be made, payment may
(notwithstanding any other provision of law) be made to
such person as may in the judgment of the Secretary be
equitably entitled thereto.
(2) Payment of insurance under paragraph (1) shall be a bar
to recovery by any other person.
* * * * * * *
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