[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).
---------------------------------------------------------------------------
    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)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                By fiscal year, millions of dollars--
                                           -------------------------------------------------------------------------------------------------------------
                                             2022    2023    2024    2025    2026    2027    2028    2029    2030    2031    2032   2022-2027  2022-2032
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       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
--------------------------------------------------------------------------------------------------------------------------------------------------------

    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.

           *       *       *       *       *       *       *


                                  [all]