[Federal Register Volume 82, Number 201 (Thursday, October 19, 2017)]
[Rules and Regulations]
[Pages 48630-48632]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-22667]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 8a

RIN 2900-AP49


Veterans' Mortgage Life Insurance--Coverage Amendment

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This document amends Department of Veterans Affairs (VA) 
regulations governing the Veterans' Mortgage Life Insurance (VMLI) 
program in order to provide VMLI-eligible individuals the option to 
lower their premiums by purchasing less than the minimum coverage 
amount required under current VA regulations. The final rule also 
amends current VA regulations to reflect that the statutory maximum 
amount of coverage available under the VMLI program was previously 
increased to $200,000, to define the term ``eligible individual,'' and 
to clarify that eligibility for VMLI coverage has been extended to 
include servicemembers as well as veterans.

DATES: Effective October 19, 2017.

FOR FURTHER INFORMATION CONTACT: Jeanne King, Department of Veterans 
Affairs Regional Office and Insurance Center (310/290B), 5000 
Wissahickon Avenue, P.O. Box 8079, Philadelphia, PA 19101, (215) 842-
2000, ext. 4839 (this is not a toll-free number).

SUPPLEMENTARY INFORMATION: The Veterans' Mortgage Life Insurance (VMLI) 
program was established in 1971, to provide mortgage protection 
insurance to service-disabled veterans who receive Specially Adapted 
Housing Grants from VA. Section 2106(g) of title 38 of the United 
States Code mandates that the amount of VMLI in force shall be the 
amount necessary to pay the covered mortgage indebtedness in full, 
except as limited by section 2106(b) or ``regulations prescribed by the 
Secretary under this section.'' Section 2106(b) currently limits the 
amount of VMLI available to $200,000. VA has prescribed a regulation to 
reduce the amount of VMLI coverage required. Until VA exercised this 
regulatory authority, program participants were required to carry an 
amount of insurance equal to the lesser of $200,000 or the unpaid 
principal of their mortgage. This requirement caused some eligible 
individuals to forego any VMLI protection. Therefore, VA amended its 
regulations to permit program participants to carry VMLI in an amount 
less than both the $200,000 statutory maximum and the amount necessary 
to pay the covered mortgage indebtedness in full.
    The comment period for the proposed rule ended on December 19, 
2016, and VA received one comment. The commenter recommended that VA 
mandate a minimum amount of coverage that insureds should be required 
to purchase, in order to decrease the likelihood that the balance of 
the mortgage still owed after death would be burdensome for the 
insured's survivors. VA believes that it is preferable for veterans to 
participate in the VMLI program to the extent they can financially, 
rather than potentially foregoing coverage entirely because they cannot 
afford the mandatory-minimum amount required by VA. If an eligible 
individual opts out of the program because the cost to carry a mandated 
minimum amount of coverage was too costly, his or her survivors could 
ultimately be forced to assume an even greater indebtedness than if the 
individual carried some VMLI coverage. Therefore, the final rule is 
being adopted as is without any changes, and provides that VMLI 
insureds may select a level of coverage that is most appropriate in 
addressing their own unique financial circumstances.
    The final rule amends the regulations to reflect that the maximum 
coverage amount is currently $200,000. It also provides a definition 
for the term ``eligible individual'' and clarifies that both 
servicemembers and veterans are entitled to apply for coverage under 
the program. Additionally, the final rule provides for one technical 
change to 38 CFR 8a.2(b)(8).

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in an expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any one year. This final rule would have no such effect 
on State, local, and tribal governments or on the private sector.

Paperwork Reduction Act

    This final rule contains no provisions constituting a collection of 
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3521).

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, when 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, and other advantages; distributive impacts; 
and equity). Executive Order 13563 (Improving Regulation and Regulatory 
Review) emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
Executive Order 12886 (Regulatory Planning and Review) defines a 
``significant regulatory action,'' which requires

[[Page 48631]]

review by the Office of Management and Budget (OMB), unless OMB waives 
such review, as ``any regulatory action that is likely to result in a 
rule that may: (1) Have an annual effect on the economy of $100 million 
or more or adversely affect in a material way the economy, a sector of 
the economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities; (2) Create a serious inconsistency or otherwise interfere 
with an action taken or planned by another agency; (3) Materially alter 
the budgetary impact of entitlements, grants, user fees, or loan 
programs or the rights and obligations of recipients thereof; or (4) 
Raise novel legal or policy issues arising out of legal mandates, the 
President's priorities, or the principles set forth in this Executive 
Order.''
    The economic, interagency, budgetary, legal, and policy 
implications of this regulatory action have been examined, and it has 
been determined not to be a significant regulatory action under 
Executive Order 12866. VA's impact analysis can be found as a 
supporting document at www.regulations.gov, usually within 48 hours 
after the rulemaking document is published. Additionally, a copy of the 
rulemaking and its impact analysis are available on VA's Web site at 
www.va.gov/orpm/, by following the link for ``VA Regulations Published 
From FY 2004 Through Fiscal Year to Date.''

Regulatory Flexibility Act

    The Secretary of Veterans Affairs hereby certifies that this final 
rule would not have a significant economic impact on a substantial 
number of small entities as they are defined in the Regulatory 
Flexibility Act, 5 U.S.C. 601-612. This final rule would directly 
affect only individuals and would not directly affect any small 
entities. Therefore, pursuant to 5 U.S.C. 605(b), this rulemaking is 
exempt from the initial and final regulatory flexibility analysis 
requirements of sections 603 and 604.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance number and title for the 
program affected by this document is 64.103, Life Insurance for 
Veterans.

List of Subjects in 38 CFR Part 8a

    Life insurance, Mortgage insurance, Veterans.

Signing Authority

    The Secretary of Veterans Affairs, or designee, approved this 
document and authorized the undersigned to sign and submit the document 
to the Office of the Federal Register for publication electronically as 
an official document of the Department of Veterans Affairs. Gina S. 
Farrisee, Deputy Chief of Staff, Department of Veterans Affairs, 
approved this document on August 24, 2017, for publication.

    Dated: October 16, 2017.
Michael Shores,
Director, Office of Regulation Policy & Management, Office of the 
Secretary, Department of Veterans Affairs.

    For the reasons stated in the preamble, VA amends 38 CFR part 8a as 
set forth below:

PART 8a--VETERANS MORTGAGE LIFE INSURANCE

0
1. The authority citation for part 8a continues to read as follows:

    Authority:  38 U.S.C. 501, and 2101 through 2106, unless 
otherwise noted.

0
2. Amend Sec.  8a.1 as follows:
0
a. In paragraph (a), remove ``veteran'' each place it appears and add 
in its place ``individual'';
0
b. In paragraph (b), remove ``veterans'' the second time it appears and 
add in its place ``individuals'';
0
c. Revise paragraph (c);
0
d. In paragraph (d) and paragraph (e) introductory text, remove 
``veteran'' and add in its place ``individual'';
0
e. Add paragraph (f); and
0
f. Add an authority citation to the end of the section.
    The revision and additions read as follows:


Sec.  8a.1  Definitions.

* * * * *
    (c) The term initial amount of insurance means the amount of 
insurance selected by the insured, which may be less than the statutory 
maximum of $200,000 and less than the amount necessary to pay the 
mortgage indebtedness in full.
* * * * *
    (f) The term eligible individual means a person who has been 
determined by the Secretary to be eligible for benefits pursuant to 38 
U.S.C. chapter 21.

(Authority: 38 U.S.C. 501, 2101, 2101A, 2106)


0
3. Amend Sec.  8a.2 as follows:
0
a. In paragraph (a), remove ``veteran'' each place it appears and add 
in its place ``individual''; add ``an initial amount of insurance'' 
between ``authorized'' and ``up''; and remove ``$90,000'' and add in 
its place ``$200,000''.
0
b. Revise paragraph (b)(1);
0
c. In paragraphs (b)(2) through (6), remove ``veteran'' each place it 
appears and add in its place ``individual'';
0
d. In paragraph (b)(7), remove ``veterans'' each place it appears and 
add in its place ``individuals'';
0
e. In paragraph (b)(8), remove ``veterans'' and add in its place 
``individuals''; remove ``(date of final publication)'' and add in its 
place ``December 24, 1987''; and remove ``veteran'' and add in its 
place ``individual''.
0
f. In paragraph (c), remove ``veteran'' and add in its place 
``individual''; and
0
g. Revise the authority citation at the end of section.
    The revision reads as follows:


Sec.  8a.2  Maximum amount of insurance.

* * * * *
    (b) * * *
    (1) $200,000.
* * * * *

(Authority: 38 U.S.C. 501, 2101, 2101A, 2106)


0
4. Amend Sec.  8a.3 as follows:
0
a. In paragraphs (a) and (b), remove ``veteran'' each place it appears 
and add in its place ``individual'';
0
b. In paragraph (c), remove ``a veteran'' and add in its place ``an 
individual'', and remove ``the veteran'' each place it appears and add 
in its place ``the individual'';
0
c. In paragraphs (d) and (e), remove ``veteran'' each place it appears 
and add in its place ``individual''; and
0
d. Add an authority citation to the end of the section.
    The addition reads as follows:


Sec.  8a.3  Effective date.

* * * * *

(Authority: 38 U.S.C. 501, 2101, 2101A, 2106)


0
5. Amend Sec.  8a.4 as follows:
0
a. In paragraph (b), remove ``$90,000'' each place it appears and add 
in its place ``$200,000''; remove ``available to'' each place it 
appears and add in its place ``selected by''; and remove ``veteran'' 
each place it appears and add in its place ``individual'';
0
b. In paragraph (c), remove ``$90,000'' and add in its place 
``$200,000''; remove ``available to'' and add in its place ``selected 
by''; remove ``eligible veteran'' each place it appears and add in its 
place ``eligible individual''; and remove ``a veteran'' and add in its 
place ``an individual''; and
0
c. Revise the authority citation at the end of section.
    The revision reads as follows:


Sec.  8a.4  Coverage.

* * * * *

[[Page 48632]]


(Authority: 38 U.S.C. 501, 2101, 2101A, 2106)


[FR Doc. 2017-22667 Filed 10-18-17; 8:45 am]
BILLING CODE 8320-01-P