National Service Life Insurance: Premium payments; clarification,

[Federal Register: February 15, 2000 (Volume 65, Number 31)]

[Rules and Regulations]

[Page 7436-7437]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr15fe00-7]

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 8

RIN 2900-AJ78

National Service Life Insurance

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

SUMMARY: This document amends the Department of Veterans Affairs regulations regarding payments of premiums for National Service Life Insurance. We are revising provisions for purposes of clarity and making other non-substantive changes.

DATES: Effective date: February 15, 2000.

FOR FURTHER INFORMATION CONTACT: Ms. Jeanne Derrick, Attorney-Advisor, Department of Veterans Affairs Regional Office and Insurance Center, P.O. Box 8079, Philadelphia, Pennsylvania 19101, telephone number (215) 842-2000, ext. 4277, fax number (215) 381-3504.

SUPPLEMENTARY INFORMATION: This document revises provisions for purposes of clarity and makes other non-substantive changes. Accordingly, we are dispensing with prior notice and comment and delayed effective date provisions of 5 U.S.C. 552 and 553.

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, 5 U.S.C. 601-612. This final rule does not make substantive changes. Pursuant to 5 U.S.C. 605(b), this final rule is, therefore, exempt from the initial and final regulatory flexibility analysis requirements of 5 U.S.C. 603 and 604.

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

List of Subjects in 38 CFR Part 8

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

[[Page 7437]]

Approved: February 2, 2000. Togo D. West, Jr., Secretary of Veterans Affairs.

For the reasons explained above, the Department of Veterans Affairs amends 38 CFR part 8 as set forth below:

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 8.2 is revised to read as follows:

   Sec. 8.2 Payment of premiums.

   (a) What is a premium? A premium is a payment that a policyholder is required to make for an insurance policy.

   (b) How can policyholders pay premiums? Premiums can be paid by:

   (1) Cash, check, or money order directly to VA.

   (2) Allotment from service or retirement pay.

   (3) Automatic deduction from VA benefits (pension, compensation or insurance dividends (see Sec. 8.4)).

   (4) Pre-authorized debit from a checking account.

   (c) When should policyholders pay premiums? (1) Unless premiums are paid in advance, policyholders must pay premiums on the effective date shown on the policy and on the same date of each following month. This is called the ``due date.''

   (2) Policyholders may pay premiums quarterly, semi-annually, or annually in advance.

   (d) What happens if a policyholder does not pay a premium on time? (1) When a policyholder pays a premium within 31 days from the ``due date,'' the policy remains in force. This 31-day period is called a ``grace period.'' If the insured dies within the 31-day grace period, VA deducts the unpaid premium from the amount of insurance payable.

   (2) If a policyholder pays a premium after the 31-day grace period, VA will not accept the payment and the policy lapses effective the date the premium was due; Except that VA will accept a premium paid after the 31-day grace period as a timely payment if:

   (i) The policyholder pays the premium within 61 days of the due date; and

   (ii) The policyholder is alive at the time the payment is mailed.

   (3) When a policyholder pays the premium by mail, the postmark date is the date of payment.

   (4) When a policyholder pays a premium by check or money order which is not honored and it is shown by satisfactory evidence that:

   The bank did not pay the check or money order because of:

   Then:

   An error by the bank................... The policyholder has an additional 31 days (from the date stamped on VA's notification letter) to pay the premium and any other premiums due through the current month. An error in the check or money order... The policyholder has an additional 31 days (same as above). Lack of funds.......................... The premium is considered not paid.

   Secs. 8.3 and 8.4 [Removed]

3. Sections 8.3 and 8.4 are removed.

   Sec. 8.6 [The 1st Sec. 8.6 is Removed]

4. The first Sec. 8.6 entitled ``Sec. 8.6 Payment of premiums; insured in active service or entitled to retirement pay.'' is removed.

   Secs. 8.5 through 8.8 [Redesignated as Secs. 8.3 through 8.6]

5. Sections 8.5 through 8.8 are redesignated as Secs. 8.3 through 8.6, respectively.

   Sec. 8.9 [Removed]

6. Section 8.9 and the undesignated center heading immediately preceding the section are removed.

   Secs. 8.10 through 8.36 [Redesignated as Secs. 8.7 through 8.33]

7. Sections 8.10 through 8.36 are redesignated as Secs. 8.7 through 8.33, respectively.

   [FR Doc. 00-3456Filed2-14-00; 8:45 am]

   BILLING CODE 8320-01-P