[Federal Register Volume 67, Number 165 (Monday, August 26, 2002)]
[Rules and Regulations]
[Pages 54737-54739]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-21531]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 8

RIN 2900-AK43


National Service Life Insurance

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This document amends the Department of Veterans Affairs 
regulations regarding National Service Life Insurance (NSLI) by 
revising the texts of five sections of regulations into plain English. 
This amendment supports an Executive Memorandum that mandates plain 
language in written government communications.

DATES: Effective Date: August 26, 2002.

FOR FURTHER INFORMATION CONTACT: Gregory Hosmer, Senior Insurance 
Specialist, Department of Veterans Affairs Regional Office and 
Insurance Center, P.O. Box 8079, Philadelphia, Pennsylvania 19101, 
(215) 842-2000 ext. 4280.

SUPPLEMENTARY INFORMATION: The Insurance Service of the Veterans 
Benefits Administration (VBA) is rewriting regulatory provisions found 
in part 8 of title 38 of the Code of Federal Regulations in order to 
promote better communication with our readers.
    Sections 8.0, 8.18, 8.25, and 8.33(a) provide explanations of the 
following subjects: The definition of and criteria for good health, 
total disability with regard to speech, the definition of disease or 
injury traceable to the extra hazards of the military or naval service, 
and a definition of a guardian for purposes of National Service Life 
Insurance. This final rule rewrites and consolidates these sections 
into one section, Sec. 8.0. Language in existing Sec. 8.0 that 
underwriting standards ``will be developed and published'' is dropped 
because we have established such standards. Section 8.1 provides 
information regarding the effective date for insurance issued under 
section 1922(a) of title 38 U.S.C. (Service-Disabled Veterans 
Insurance). Existing Sec. 8.33(b) stipulates the actions that a 
guardian may undertake on behalf of either the insured or the 
beneficiary of an NSLI policy. The texts of Secs. 8.1 and

[[Page 54738]]

8.33(b) have been revised for clarity and to promote better 
understanding.
    This final rule consists of non-substantive changes and therefore 
it is not subject to the notice, comment and effective-date provisions 
of 5 U.S.C. 553.

Unfunded Mandates

    The Unfunded Mandates Reform Act requires, at 2 U.S.C. 1532, 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 section of 
$100 million or more in any given year. This rule would have no 
consequential effect on State, local, or tribal governments.

Paperwork Reduction Act

    This document contains no provisions constituting a collection of 
information under the Paperwork Reduction Act (44 U.S.C. 3501-3520).

Regulatory Flexibility Act

    The Secretary of Veterans Affairs hereby certifies that this final 
rule 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 final rule will not 
affect any entity since it does not contain any substantive provisions. 
Therefore, pursuant to 5 U.S.C. 605(b), this amendment is exempt from 
the initial and final regulatory flexibility analysis requirements of 
sections 603 and 604.

    The Catalog of Federal Domestic Assistance Program number for 
this regulation is 64.103.

List of Subjects in Part 8

    Disability benefits, Life insurance, Loan programs--veterans, 
Military personnel, Veterans.

    Approved: August 16, 2002.
Anthony J. Principi,
Secretary of Veterans Affairs.

    For the reasons set out in the preamble, 38 CFR part 8 is amended 
as follows:

PART 8--NATIONAL SERVICE LIFE INSURANCE

    1. The authority citation for part 8 continues to read as follows:

    Authority: 38 U.S.C. 501, 1901-1929, 1981-1988, unless otherwise 
noted.

    2. Section 8.0 is revised to read as follows:


Sec. 8.0  Definitions of terms used in connection with title 38 CFR, 
part 8, National Service Life Insurance.

    (a) What does the term ``good health'' mean? The term good health 
means that the applicant is, from clinical or other evidence, free from 
any condition that would tend to:
    (1) Weaken normal physical or mental functions; or
    (2) Shorten life.


    Note to Paragraph (a): Conditions that would affect ``good 
health'' are diseases or injuries or residuals of diseases or 
injuries. A ``residual'' is a disability that remains following the 
original disease or injury.


    (b) What does the term ``good health criteria'' mean? The term good 
health criteria means the underwriting standards that determine whether 
a person is in good health. ``Good health criteria'' are based whenever 
possible, as far as practicable, on general insurance usage. 
``Underwriting'' is the process that sets the terms, conditions, and 
prices for an insurance policy, by rating an applicant's mortality 
risk.
    (c) What does the term ``organic loss of speech'' mean? The term 
organic loss of speech means the loss of the ability to express 
oneself, both by voice and whisper, through the normal organs of speech 
if the loss is caused by physical changes in such organs. The fact that 
some speech can be produced through the use of artificial appliance or 
other organs of the body will not impact this definition.
    (d) What does the term ``disease or injury traceable to the extra 
hazards of the military service'' mean? The term disease or injury 
traceable to the extra hazards of the military service means a disease 
or injury that was either caused by or can be traced back to the 
performance of duty in the active military, naval, or air service.
    (e) What does the term ``guardian'' mean? The term guardian means 
any representative certified by the appropriate Veterans Service Center 
Manager, under Sec. 13.55 of this chapter, to receive benefits in a 
fiduciary capacity on behalf of the insured or the beneficiary, or to 
take the actions listed in Sec. 8.32.

    3. Section 8.1 is revised to read as follows:


Sec. 8.1  Effective date for an insurance policy issued under section 
1922(a) of title 38 U.S.C. (Service-Disabled Veterans' Insurance).

    (a) What is the effective date of the policy? The effective date is 
the date policy coverage begins. Benefits due under the policy are 
payable any time after the effective date.
    (b) How is the effective date established? The effective date is 
the date you deliver both of the following to VA:
    (1) A valid application.
    (2) A premium payment.


    Note 1 to Paragraph (b): If your valid application and premium 
are mailed to VA, the postmark date will be the date of delivery.


    Note 2 to Paragraph (b): If a postmark date is not available, 
the date of delivery will be the date your valid application and 
premium are received by VA.


    (c) Can you have a different effective date? Yes, if you would like 
an effective date other than the date of delivery as described in 
paragraph (b) of this section, you may choose one of the following 
three options as an effective date:
    (1) The first day of the month in which you deliver your valid 
application and premium payment to VA. For example, if VA receives your 
application and premium payment on August 15, you may request an 
effective date of August 1.
    (2) The first day of the month following the month in which you 
deliver your valid application and premium payment. For example, if VA 
receives your application and premium payment on August 15, you may 
request an effective date of September 1.
    (3) The first day of any month up to six months prior to the month 
in which you deliver your valid application and premium payment. For 
example, if VA receives your application and premium payment on August 
15, you may request an effective date of February 1 or the first day of 
any month following up to August 1. However, you must pay the 
following:
    (i) The insurance reserve amount for the time period for each month 
starting with the requested effective date up to the first day of the 
month prior to the month in which you delivered your application to VA; 
and
    (ii) The premium for the month in which you delivered your 
application to VA.


    Note to Paragraph (c): For example, if your postmark date is 
August 15 and you request an effective date of February 1, you must 
pay the insurance reserve amount for February 1 through July 31, and 
also pay the August premium.


    4. Section 8.18 is revised to read as follows:


Sec. 8.18  Total disability--speech.

    The organic loss of speech shall be deemed to be total disability 
under National Service Life Insurance.

[[Page 54739]]

Sec. 8.25  [Removed]

    5. Section 8.25 and the undesignated center heading immediately 
preceding the section are removed.


Secs. 8.26 through 8.33  [Redesignated as Secs. 8.25 through 8.32]

    6. Sections 8.26 through 8.33 are redesignated as Secs. 8.25 
through 8.32, respectively.

    7. Newly redesignated Sec. 8.32 is revised to read as follows:


Sec. 8.32  Authority of the Guardian.

    What actions does a guardian have the authority to take for 
insurance purposes? The guardian of an insured or beneficiary has the 
authority to take the following actions:
    (a) Apply for insurance or for conversion of a policy or change of 
plan;
    (b) Reinstate a policy;
    (c) Withdraw dividends held on deposit or credit;
    (d) Select or change a dividend option;
    (e) Obtain a policy loan;
    (f) Cash surrender a policy;
    (g) Authorize a deduction from benefits or allotment from military 
retired pay to pay premiums;
    (h) Apply for and receive payment of proceeds on a matured policy;
    (i) Select or change the premium payment option;
    (j) Apply for waiver of premiums and total disability income 
benefits;
    (k) Select or change settlement options for beneficiaries; and
    (l) Assign a beneficiary's interest as provided under section 1918 
of title 38 U.S.C.

(Authority: 38 U.S.C. 1906)


Sec. 8.37  [Redesignated as Sec. 8.33]

    8. Section 8.37 is redesignated as new Sec. 8.33.

[FR Doc. 02-21531 Filed 8-23-02; 8:45 am]
BILLING CODE 8320-01-P