38 U.S.C. § 1925 — Limited period for acquiring insurance

Page 515 TITLE 38—VETERANS’ BENEFITS § 1925 § 1925. Limited period for acquiring insurance (a) Any person (other than a person referred to in subsection (f) of this section) heretofore eligi- ble to apply for National Service Life Insurance after October 7, 1940, and before January 1, 1957, who is found by the Secretary to be suffering (1) from a service-connected disability or disabil- ities for which compensation would be payable if 10 percent or more in degree and except for which such person would be insurable according to the standards of good health established by the Secretary; or (2) from a non-service-con- nected disability which renders such person un- insurable according to the standards of good health established by the Secretary and such person establishes to the satisfaction of the Sec- retary that such person is unable to obtain com- mercial life insurance at a substandard rate, shall, upon application in writing made before May 2, 1966, compliance with the health require- ments of this section and payment of the re- quired premiums, be granted insurance under this section. (b) If, notwithstanding the applicant’s service- connected disability, such person is insurable according to the standards of good health estab- lished by the Secretary, the insurance granted under this section shall be issued upon the same terms and conditions as are contained in the standard policies of National Service Life Insur- ance except (1) five-year level premium term in- surance may not be issued; (2) the net premium rates shall be based on the 1958 Commissioners Standard Ordinary Basic Mortality Table, in- creased at the time of issue by such an amount as the Secretary determines to be necessary for sound actuarial operations, and thereafter such premiums may be adjusted as the Secretary de- termines to be so necessary but at intervals of not less than two years; (3) an additional pre- mium to cover administrative costs to the Gov- ernment as determined by the Secretary at times of issue shall be charged for insurance issued under this subsection and for any total disability income provision attached thereto, and thereafter such costs may be adjusted as the Secretary determines to be necessary but at in- tervals of not less than five years; (4) all cash, loan, extended and paid-up insurance values shall be based on the 1958 Commissioners Stand- ard Ordinary Basic Mortality Table; (5) all set- tlements on policies involving annuities shall be calculated on the basis of The Annuity Table for 1949; (6) all calculations in connection with in- surance issued under this subsection shall be based on interest at the rate of 31⁄2 percent per annum; and (7) the insurance shall include such other changes in terms and conditions as the Secretary determines to be reasonable and prac- ticable. (c) If the applicant’s service-connected dis- ability or disabilities render the applicant unin- surable according to the standards of good health established by the Secretary, or if the ap- plicant has a non-service-connected disability which renders the applicant uninsurable accord- ing to the standards of good health established by the Secretary and such person establishes to the satisfaction of the Secretary that such per- son is unable to obtain commercial life insur- ance at a substandard rate and such uninsurability existed as of the date of approval of this section, the insurance granted under this section shall be issued upon the same terms and conditions as are contained in standard policies of National Service Life Insurance, except (1) five-year level premium term insurance may not be issued; (2) the premiums charged for the in- surance issued under this subsection shall be in- creased at the time of issue by such an amount as the Secretary determines to be necessary for sound actuarial operations and thereafter such premiums may be adjusted from time to time as the Secretary determines to be necessary; for the purpose of any increase at time of issue or later adjustment the service-connected group and the non-service-connected group may be separately classified; (3) an additional premium to cover administrative costs to the Govern- ment as determined by the Secretary at the time of issue shall be charged for insurance issued under this subsection and for any total disability income provision attached thereto (for which the insured may subsequently become eligible) and thereafter such costs may be ad- justed as the Secretary determines to be nec- essary but at intervals of not less than five years and for this purpose the service-connected and non-service-connected can be separately classified; (4) all settlements on policies involv- ing annuities shall be calculated on the basis of The Annuity Table for 1949; (5) all calculations in connection with insurance issued under this subsection shall be based on interest at the rate of 31⁄2 percent per annum; and (6) the insurance shall include such other changes in terms and conditions as the Secretary determines to be reasonable and practicable. (d)(1) All premiums and collections on insur- ance issued pursuant to this section and any total disability income provision attached thereto shall be credited to the Veterans Re- opened Insurance Fund, a revolving fund estab- lished in the Treasury of the United States, and all payments on such insurance and any total disability provision attached thereto, including payments of dividends and refunds of unearned premiums, shall be made from that fund and the interest earned on the assets of that fund. For actuarial and accounting purposes, the assets and liabilities (including liabilities for repay- ment of advances hereinafter authorized, and adjustment of premiums) attributable to the in- sured groups established under this section shall be separately determined. Such amounts in the Veterans Special Term Insurance Fund in the Treasury, not exceeding $1,650,000 in the aggre- gate, as may hereafter be determined by the Secretary to be in excess of the actuarial liabil- ities of that fund, including contingency re- serves, shall be available for transfer to the Vet- erans Reopened Insurance Fund as needed to provide initial capital. Any amounts so trans- ferred shall be repaid to the Treasury over a rea- sonable period of time with interest as deter- mined by the Secretary of the Treasury taking into consideration the average yield on all mar- ketable interest-bearing obligations of the United States of comparable maturities then forming a part of the public debt. (2) The Secretary is authorized to set aside out of the revolving fund established under this sec- Page 516 TITLE 38—VETERANS’ BENEFITS § 1925 tion such reserve amounts as may be required under accepted actuarial principles to meet all liabilities on insurance issued under this section and any total disability income provision at- tached thereto. The Secretary of the Treasury is authorized to invest in and to sell and retire special interest-bearing obligations of the United States for the account of the revolving fund. Such obligations issued for this purpose shall have maturities fixed with due regard for the needs of the fund and shall bear interest at a rate equal to the average market yield (com- puted by the Secretary of the Treasury on the basis of market quotations as of the end of the calendar month next preceding the date of issue) on all marketable interest-bearing obligations of the United States then forming a part of the public debt which are not due or callable until after the expiration of four years from the end of such calendar month; except that where such average market yield is not a multiple of one- eighth of 1 percent, the rate of interest of such obligation shall be the multiple of one-eighth of 1 percent nearest such market yield. (3) Notwithstanding the provisions of section 1982 of this title, the Secretary shall, from time to time, determine the administrative costs to the Government which in the Secretary’s judg- ment are properly allocable to insurance issued under this section and any total disability in- come provision attached thereto, and shall transfer from the revolving fund, the amount of such cost allocable to the Department to the ap- propriations for ‘‘General Operating Expenses and Information Technology Systems, Depart- ment of Veterans Affairs’’, and the remainder of such cost to the general fund receipts in the Treasury. The initial administrative costs of issuing insurance under this section and any total disability income provision attached thereto shall be so transferred over such period of time as the Secretary determines to be rea- sonable and practicable. (e) Notwithstanding the provisions of section 1982 of this title, a medical examination (includ- ing any supplemental examination or tests) when required of an applicant for issuance of in- surance under this section or any total dis- ability income provisions attached thereto shall be at the applicant’s own expense by a duly li- censed physician. (f) No insurance shall be granted under this section to any person referred to in section 107 of this title or to any person while on active duty or active duty for training under a call or order to such duty for a period of thirty-one days or more. (Added Pub. L. 88–664, § 12(a), Oct. 13, 1964, 78 Stat. 1096, § 725; amended Pub. L. 89–40, June 14, 1965, 79 Stat. 130; Pub. L. 96–128, title III, § 301, Nov. 28, 1979, 93 Stat. 985; Pub. L. 97–295, § 4(25), Oct. 12, 1982, 96 Stat. 1306; Pub. L. 99–576, title VII, § 701(28), Oct. 28, 1986, 100 Stat. 3292; renum- bered § 1925 and amended Pub. L. 102–83, §§ 4(a)(2)(B)(ii), (3), (4), (b)(1), (2)(E), 5(a), (c)(1), Aug. 6, 1991, 105 Stat. 403–406; Pub. L. 111–117, div. E, title II, § 225, Dec. 16, 2009, 123 Stat. 3307.) Editorial Notes AMENDMENTS 2009—Subsec. (d)(3). Pub. L. 111–117 substituted ‘‘ap- propriations for ‘General Operating Expenses and Infor- mation Technology Systems, Department of Veterans Affairs’ ’’ for ‘‘appropriation ‘General Operating Ex- penses, Department of Veterans Affairs’ ’’. 1991—Pub. L. 102–83, § 5(a), renumbered section 725 of this title as this section. Subsecs. (a) to (c). Pub. L. 102–83, § 4(b)(1), (2)(E), sub- stituted ‘‘Secretary’’ for ‘‘Administrator’’ wherever ap- pearing. Subsec. (d). Pub. L. 102–83, § 5(c)(1), substituted ‘‘1982’’ for ‘‘782’’ in par. (3). Pub. L. 102–83, § 4(b)(1), (2)(E), substituted ‘‘Sec- retary’’ for ‘‘Administrator’’ and ‘‘Secretary’s’’ for ‘‘Administrator’s’’ wherever appearing in pars. (1) to (3). Pub. L. 102–83, § 4(a)(3), (4), substituted ‘‘Department’’ for first reference to ‘‘Veterans’ Administration’’ in par. (3). Pub. L. 102–83, § 4(a)(2)(B)(ii), substituted ‘‘Depart- ment of Veterans Affairs’’ for second reference to ‘‘Vet- erans’ Administration’’ in par. (3). Subsec. (e). Pub. L. 102–83, § 5(c)(1), substituted ‘‘1982’’ for ‘‘782’’. 1986—Subsecs. (a), (b). Pub. L. 99–576, § 701(28)(A), sub- stituted ‘‘such person’’ for ‘‘he’’. Subsec. (c). Pub. L. 99–576, § 701(28)(A), (B), sub- stituted ‘‘the applicant’’ for ‘‘him’’ in two places, and ‘‘such person’’ for ‘‘he’’. Subsec. (d)(3). Pub. L. 99–576, § 701(28)(C), substituted ‘‘the Administrator’s’’ for ‘‘his’’. 1982—Subsec. (a). Pub. L. 97–295, § 4(25), substituted ‘‘percent’’ for ‘‘per centum’’, and substituted ‘‘before May 2, 1966’’ for ‘‘within one year after the effective date of this section’’. Subsecs. (b), (c), (d)(2). Pub. L. 97–295, § 4(25)(A), sub- stituted ‘‘percent’’ for ‘‘per centum’’ wherever appear- ing. 1979—Subsec. (b). Pub. L. 96–128, § 301(a), struck out cl. (8) which required the insurance and any attached total disability income provision to be on a nonparticipatory basis. Subsec. (c). Pub. L. 96–128, § 301(b), struck out cl. (4) which required the insurance and any attached total disability income provision to be on a nonparticipatory basis, and redesignated former cls. (5) to (7) as (4) to (6), respectively. Subsec. (d)(1). Pub. L. 96–128, § 301(c), inserted provi- sions respecting payments of dividends and refunds of unearned premiums from the fund, and interest earned on the assets of the fund. 1965—Subsec. (b). Pub. L. 89–40, § 1(1), struck out pro- vision from cl. (8) which called for all premiums and other collections for insurance granted under this sec- tion to be credited to a revolving fund established in the Treasury of the United States and for payment on such insurance or total disability income provisions to be made directly from that fund. Subsec. (c). Pub. L. 89–40, § 1(2), struck out cl. (8) which provided that all premiums and other collections on the insurance and any total disability income provi- sion attached thereto should be credited to the Na- tional Service Life Insurance appropriation, and the payments on such insurance and total disability in- come provisions should be made directly from such ap- propriations, and struck out sentence which authorized necessary appropriations. Subsec. (d)(1). Pub. L. 89–40, § 1(3), struck out provi- sions authorizing appropriations to carry out the pur- poses of subsec. (b) of this section by adding to the re- volving fund as needed at interest to be determined by the Secretary of the Treasury, and substituted therefor provisions requiring credit to Veterans Reopened Insur- ance Fund of all premiums and collections on insurance issued pursuant to this section and disbursements from that fund of all payments on insurance and total dis- ability provisions attached thereto, separate deter- Page 517 TITLE 38—VETERANS’ BENEFITS § 1928 mination for actuarial purposes of the various insured groups under this section, transfer to fund from Vet- erans Special Term Insurance Fund to provide initial capital of excess funds not exceeding $1,650,000, and re- payment over a reasonable time at interest to be deter- mined by the Secretary of the Treasury. Subsec. (d)(2). Pub. L. 89–40, § 1(4), struck out ref- erence to subsec. (b) of this section. Subsec. (d)(3). Pub. L. 89–40, § 1(5), struck out ref- erence to National Service Life Insurance appropria- tion. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1979 AMENDMENT Amendment by Pub. L. 96–128 effective Nov. 28, 1979, see section 601(b) of Pub. L. 96–128, set out as a note under section 1114 of this title. EFFECTIVE DATE OF 1965 AMENDMENT Pub. L. 89–40 provided that the amendment made by Pub. L. 89–40 is effective May 1, 1965. EFFECTIVE DATE Pub. L. 88–664, § 12(d), Oct. 13, 1964, 78 Stat. 1099, pro- vided that: ‘‘The amendments made by this section [en- acting this section and amending section 704 [now 1904] of this title] shall take effect as of the first day of the first calendar month which begins more than six cal- endar months after the date of enactment of this Act [Oct. 13, 1964].’’ § 1926. Authority for higher interest rates for amounts payable to beneficiaries Notwithstanding sections 1902, 1923, and 1925 of this title, if the beneficiary of an insurance pol- icy receives the proceeds of such policy under a settlement option under which such proceeds are paid in equal monthly installments over a limited period of months, the interest that may be added to each such installment may be at a rate that is higher than the interest rate pre- scribed in the appropriate section of this sub- chapter. The Secretary may from time to time establish a higher interest rate under the pre- ceding sentence only in accordance with a deter- mination that such higher rate is administra- tively and actuarially sound for the program of insurance concerned. Any such higher interest rate shall be paid on the unpaid balance of such monthly installments. (Added Pub. L. 96–128, title III, § 302(a), Nov. 28, 1979, 93 Stat. 986, § 726; renumbered § 1926 and amended Pub. L. 102–83, §§ 4(b)(1), (2)(E), 5(a), (c)(1), Aug. 6, 1991, 105 Stat. 404–406.) Editorial Notes AMENDMENTS 1991—Pub. L. 102–83, § 5(a), renumbered section 726 of this title as this section. Pub. L. 102–83, § 5(c)(1), substituted ‘‘1902, 1923, and 1925’’ for ‘‘702, 723, and 725’’. Pub. L. 102–83, § 4(b)(1), (2)(E), substituted ‘‘Sec- retary’’ for ‘‘Administrator’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective Nov. 28, 1979, see section 601(b) of Pub. L. 96–128, set out as an Effective Date of 1979 Amendment note under section 1114 of this title. § 1927. Authority for higher monthly installments payable to certain annuitants (a) Subject to subsections (b) and (c) of this section, the Secretary may from time to time adjust the dollar amount of the monthly install- ments payable to a beneficiary of National Serv- ice Life Insurance, Veterans Special Life Insur- ance, or Veterans Reopened Insurance who is re- ceiving the proceeds of such insurance under a life annuity settlement option. The Secretary may make such an adjustment only if the Sec- retary determines that the adjustment is admin- istratively and actuarially sound for the pro- gram of insurance concerned. The Secretary may make such an adjustment without regard to the provisions of sections 1902, 1923, and 1925 of this title with respect to interest rates and the use of mortality tables. (b) The Secretary shall determine the amount in the trust funds in the Treasury held for pay- ment of proceeds to National Service Life Insur- ance, Veterans Special Life Insurance, and Vet- erans Reopened Insurance beneficiaries attrib- utable to interest and mortality gains on the re- serves held for annuity accounts. Such amount shall be available for distribution to the life an- nuitants referred to in subsection (a) of this sec- tion as a fixed percentage of, and in addition to, the monthly installment amount to which the annuitants are entitled under this subchapter. For the purposes of this section, gains on the re- serves are defined as funds attributable solely to annuity accounts that are in excess of actuarial liabilities. (c) The monthly amount of an annuity author- ized in sections 1902, 1923, and 1925 of this title, as adjusted under this section, may not be less than the monthly amount of such annuity that would otherwise be applicable without regard to this section. (Added Pub. L. 100–322, title III, § 331(a)(1), May 20, 1988, 102 Stat. 536, § 727; renumbered § 1927 and amended Pub. L. 102–83, §§ 4(b)(1), (2)(E), 5(a), (c)(1), Aug. 6, 1991, 105 Stat. 404–406.) Editorial Notes AMENDMENTS 1991—Pub. L. 102–83, § 5(a), renumbered section 727 of this title as this section. Subsec. (a). Pub. L. 102–83, § 5(c)(1), substituted ‘‘1902, 1923, and 1925’’ for ‘‘702, 723, and 725’’. Pub. L. 102–83, § 4(b)(1), (2)(E), substituted ‘‘Sec- retary’’ for ‘‘Administrator’’ wherever appearing. Subsec. (b). Pub. L. 102–83, § 4(b)(1), (2)(E), substituted ‘‘Secretary’’ for ‘‘Administrator’’. Subsec. (c). Pub. L. 102–83, § 5(c)(1), substituted ‘‘1902, 1923, and 1925’’ for ‘‘702, 723, and 725’’. § 1928. Authority for payment of interest on set- tlements (a) Subject to subsection (b) of this section, the Secretary may pay interest on the proceeds of a participating National Service Life Insur- ance, Veterans’ Special Life Insurance, and Vet- erans Reopened Insurance policy from the date the policy matures to the date of payment of the proceeds to the beneficiary or, in the case of an endowment policy, to the policyholder. (b)(1) The Secretary may pay interest under subsection (a) of this section only if the Sec-