[Federal Register Volume 67, Number 155 (Monday, August 12, 2002)]
[Rules and Regulations]
[Pages 52413-52414]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-20278]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 9

RIN 2900-AJ80


Accelerated Benefits Option for Servicemembers' Group Life 
Insurance and Veterans' Group Life Insurance

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: The Veterans Programs Enhancement Act of 1998 authorized the 
payment of accelerated benefits to terminally ill persons insured under 
Servicemembers' Group Life Insurance (SGLI) or Veterans' Group Life 
Insurance (VGLI). This document amends the Department of Veterans 
Affairs (VA) regulations to establish a mechanism for implementing 
these statutory provisions.

DATES: Effective Date. August 12, 2002.

FOR FURTHER INFORMATION CONTACT: Greg Hosmer, Senior Attorney/Insurance 
Specialist, Insurance Program Administration and Oversight, Department 
of Veterans Affairs Regional Office and Insurance Center, PO Box 8079, 
Philadelphia, Pennsylvania 19101, (215) 842-2000, ext. 4280 (this is 
not a toll-free number).

SUPPLEMENTARY INFORMATION: In a document published in the Federal 
Register on July 20, 2000 (65 FR 44999), the Department of Veterans 
Affairs proposed to establish a mechanism for the payment of 
accelerated death benefits to terminally ill Servicemembers' Group Life 
Insurance (SGLI) and Veterans' Group Life Insurance (VGLI) 
policyholders. We requested comments for a 60-day period that ended 
September 18, 2000. We received no comments. Based on the rationale set 
forth in the proposed rule, we are adopting the proposed rule as a 
final rule with minor nonsubstantive changes.
    At the time of the publication of the proposed rule, the 
accelerated benefit provisions were only authorized for servicemembers 
and veterans. Recently, Public Law 107-14 amended 38 U.S.C. 1965 and 
1967 to expand the provisions to SGLI family coverage. Accordingly, the 
final rule would apply also to SGLI family coverage. SGLI family 
coverage is provided as a rider to an insured member's SGLI coverage 
and therefore only the insured member may apply for SGLI family 
coverage accelerated benefits.
    The final rule also reflects a change in the address for submitting 
an application for accelerated benefits. For consistency, this change 
also revises Sec. 9.1(b). In, addition, changes are made for purposes 
of clarification.

Paperwork Reduction Act

    This document contains provisions constituting collections of 
information under the Paperwork Reduction Act (44 U.S.C. 3501-3520) 
approved by OMB under Control No. 2900-0618.

Unfunded Mandates

    The Unfunded Mandates Reform Act requires (in section 202) that 
agencies prepare an assessment of anticipated costs and benefits before 
developing any rule that may result in an expenditure by State, local, 
or tribal governments, in the aggregate, or by the private sector of 
$100 million or more in any given year. This rule would have no 
consequential effect on State, local, or tribal governments.

Executive Order 12866

    This document has been reviewed by the Office of Management and 
Budget under Executive Order 12866.

Regulatory Flexibility Act

    The Secretary hereby certifies that this regulatory amendment will 
not have a significant economic impact on a substantial number of small 
entities as they are defined in the Regulatory Flexibility Act (RFA), 5 
U.S.C. 601-612. This amendment would not directly affect any small 
entities. Only persons insured under the government's SGLI and VGLI 
programs could be directly affected. Therefore, pursuant to 5 U.S.C. 
605(b), this regulatory amendment is exempt from the initial and final 
regulatory flexibility analysis requirements of sections 603 and 604.

Catalog of Federal Domestic Assistance Number

    The Catalog of Federal Domestic Assistance number for the program 
affected by this document is 64.103.

List of Subjects in 38 CFR Part 9

    Life insurance, Military personnel, Veterans.

    Approved: June 6, 2002.
Anthony J. Principi,
Secretary of Veterans Affairs.

    For the reasons set out in the preamble, 38 CFR part 9 is amended 
as set forth below:

PART 9--SERVICEMEMBERS' GROUP LIFE INSURANCE AND VETERANS' GROUP 
LIFE INSURANCE

    1. The authority citation for part 9 is revised to read as follows:

    Authority: 38 U.S.C. 501, 1965-1980, unless otherwise noted.


    2. Section 9.1(b) is revised to read as follows:


Sec. 9.1  Definitions.

* * * * *
    (b) The term administrative office means the Office of 
Servicemembers' Group Life Insurance located at 290 W. Mt. Pleasant 
Avenue, Livingston, New Jersey 07039.
* * * * *

    3. Section 9.14 is added to read as follows:


Sec. 9.14  Accelerated Benefits.

    (a) What is an Accelerated Benefit? An Accelerated Benefit is a 
payment of a portion of your Servicemembers' Group Life Insurance or 
Veterans' Group Life Insurance to you before you die.
    (b) Who is eligible to receive an Accelerated Benefit? You are 
eligible to receive an Accelerated Benefit if you have a valid written 
medical prognosis from a physician of 9 months or less to live, and 
otherwise comply with the provisions of this section.
    (c) Who can apply for an Accelerated Benefit? Only you, the insured 
member, can apply for an Accelerated Benefit. No one can apply on your 
behalf.
    (d) How much can you request as an Accelerated Benefit? (1) You can 
request as an Accelerated Benefit an amount up to a maximum of 50% of 
the face value of your insurance coverage.
    (2) Your request for an Accelerated Benefit must be $5,000 or a 
multiple of $5000 (for example, $10,000, $15,000).
    (e) How much can you receive as an Accelerated Benefit? You can 
receive as an Accelerated Benefit the amount you request up to a 
maximum of 50% of the face value of your insurance coverage, minus the 
interest reduction. The interest reduction is the amount the Office of 
Servicemembers' Group Life Insurance actuarially determines to be the 
amount of interest that would be lost because of the early payment of 
part of your insurance coverage. This means that if you have $100,000 
in coverage and you request the maximum amount that you are eligible to 
request as an Accelerated Benefit, you will be paid $50,000 minus the 
interest reduction.
    (f) How do you apply for an Accelerated Benefit? (1) You can obtain 
an application form entitled ``Claim for Accelerated Benefits'' by 
writing the

[[Page 52414]]

Office of Servicemembers' Group Life Insurance, 290 W. Mt. Pleasant 
Avenue, Livingston, New Jersey 07039; calling the Office of 
Servicemembers' Group Life Insurance toll-free at 1-800-219-1473; or 
downloading the form from the Internet at www.insurance.va.gov. You 
must submit the completed application form to the Office of 
Servicemembers' Group Life Insurance, 290 W. Mt. Pleasant Avenue, 
Livingston, New Jersey 07039.
    (2) As stated on the application form, you will be required to 
complete part of the application form and your physician will be 
required to complete part of the application form. If you are an active 
duty servicemember, your branch of service will also be required to 
complete part of the form.

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To Be Completed by Insured

Claim for Accelerated Benefits

Your name:-------------------------------------------------------------
Social Security Number:------------------------------------------------
Your home address:-----------------------------------------------------
Date of birth:---------------------------------------------------------
Branch of Service (if covered underSGLI):------------------------------
Your mailing address (if different from above):------------------------
Amount of SGLI coverage: $---------------------------------------------
Amount of claim (can be no more than one-half of coverage in increments 
of $5,000):------------------------------------------------------------
Type of coverage (check one):
    SGLI (circle one of the following): Active Duty  Ready Reserve  
Army or Air  National Guard  Separated or Discharged
    VGLI

    Note: If you checked SGLI, you must also have your military unit 
complete the attached form.

    I acknowledge that I have read all of the attached information 
about the accelerated benefit. I understand that I can get this 
benefit only once during my lifetime and that I can use it for any 
purpose I choose. I further understand that the face amount of my 
coverage will reduce by the amount of accelerated benefit I choose 
to receive now.

Your signature:--------------------------------------------------------
Date:------------------------------------------------------------------

Authorization To Release Medical Records

    To all physicians, hospitals, medical service providers, 
pharmacists, employers, other insurance companies, and all other 
agencies and organizations:
    You are authorized to release a copy of all my medical records, 
including examinations, treatments, history, and prescriptions, to 
the Office of Servicemembers' Group Life Insurance (OSGLI) or its 
representatives.

Printed name:----------------------------------------------------------
Signature:-------------------------------------------------------------
Date:------------------------------------------------------------------
    A photocopy of this authorization will be considered as 
effective and valid as the original.
    Valid for one year from date signed.

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To Be Completed by Physician

Attending Physician's Certification

Patient's name:--------------------------------------------------------
Patient's Social Security Number:--------------------------------------
Diagnosis:-------------------------------------------------------------
ICD-9-CM Disease Code *:-----------------------------------------------
Description of present medical condition (please attach results of x-
rays, E.K.G. or other tests):------------------------------------------

    Is the patient capable of handling his/her own affairs? ________ 
Yes____ No____
    The patient applied for an accelerated benefit under his/her 
government life insurance coverage. To qualify, the patient must 
have a life expectancy of nine (9) months or less.
    Does your patient meet this requirement? ________ Yes____ No____

Attending Physician's name (please print):-----------------------------
State in which you are licensed to practice:---------------------------
Specialty:-------------------------------------------------------------
Mailing address:-------------------------------------------------------
Telephone number:------------------------------------------------------
Fax Number:------------------------------------------------------------
Signature:-------------------------------------------------------------
Date:------------------------------------------------------------------

    *ICD-9-CM is an acronym for International Classification of 
Diseases, 9th revision, Clinical Modification.

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To Be Completed by Personnel Office of Servicemember's Unit

(Complete this form only if the applicant for Accelerated Benefits 
is covered under SGLI.)

Branch of Service Statement

Servicemember's name:--------------------------------------------------
Social Security Number:------------------------------------------------
Branch of Service:-----------------------------------------------------
Amount of SGLI coverage: $---------------------------------------------
Monthly premium amount: $----------------------------------------------
Name of person completing this form:-----------------------------------
Telephone Number:------------------------------------------------------
Fax Number:------------------------------------------------------------
Title of person completing this form:----------------------------------
Duty Station and address:----------------------------------------------
Signature of person completing this form:------------------------------
Date:------------------------------------------------------------------

    Notice: It is fraudulent to complete these forms with 
information you know to be false or to omit important facts. 
Criminal and/or civil penalties can result from such acts.

    (g) Who decides whether or not an Accelerated Benefit will be paid 
to you? The Office of Servicemembers' Group Life Insurance will review 
your application and determine whether you meet the requirements of 
this section for receiving an Accelerated Benefit.
    (1) They will approve your application if the requirements of this 
section are met.
    (2) If the Office of Servicemembers' Group Life Insurance 
determines that your application form does not fully and legibly 
provide the information requested by the application form, they will 
contact you and request that you or your physician submit the missing 
information to them. They will not take action on your application 
until the information is provided.
    (h) How will an Accelerated Benefit be paid to you? An Accelerated 
Benefit will be paid to you in a lump sum.
    (i) What happens if you change your mind about an application you 
filed for Accelerated Benefits? (1) An election to receive the 
Accelerated Benefit is made at the time you have cashed or deposited 
the Accelerated Benefit. After that time, you cannot cancel your 
request for an Accelerated Benefit. Until that time, you may cancel 
your request for benefits by informing the Office of Servicemembers' 
Group Life Insurance in writing that you are canceling your request and 
by returning the check if you have received one. If you want to change 
the amount of benefits you requested or decide to reapply after 
canceling a request, you may file another application in which you 
request either the same or a different amount of benefits.
    (2) If you die before cashing or depositing an Accelerated Benefit 
payment, the payment must be returned to the Office of Servicemembers' 
Group Life Insurance. Their mailing address is 290 W. Mt. Pleasant 
Avenue, Livingston, New Jersey 07039.
    (j) If you have cashed or deposited an Accelerated Benefit, are you 
eligible for additional Accelerated Benefits? No.

(Approved by the Office of Management and Budget under control number 
2900-0618)

(Authority: 38 U.S.C. 1965, 1966, 1967, 1980)

[FR Doc. 02-20278 Filed 8-9-02; 8:45 am]
BILLING CODE 8320-01-P