To amend title 38, United States Code, to make improvements to certain life insurance programs, administered by the Secretary of Veterans Affairs for veterans with service-connected disabilities, and for other purposes.

April 28, 2004

Mr. FILNER introduced the following bill; which was referred to the Committee on Veterans' Affairs

To amend title 38, United States Code, to make improvements to certain life insurance programs, administered by the Secretary of Veterans Affairs for veterans with service-connected disabilities, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Fair Insurance Premiums for Disabled Veterans Act'.

SEC. 2. REDUCTION IN SERVICE-DISABLED VETERANS INSURANCE PREMIUMS.

(a) In General- Section 1922(a) of title 38, United States Code, is amended--

(1) by inserting `(1)' after `(a)'; and

(2) by striking the fourth sentence and all that follows and inserting the following:

`(2) 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 Insurance, except that--

`(A) the premium rates for such insurance--

`(i) for premiums for months beginning before the date of the enactment of the Fair Insurance Premiums for Disabled Veterans Act shall be based on the Commissioners 1941 Standard Ordinary Table of Mortality and interest at the rate of 2 1/4 percent per year; and

`(ii) for premiums for months beginning on or after that date shall be based upon the 2001 Commissioners Standard Ordinary Table of Mortality and interest at the rate of 4.5 percent per year;

`(B) all cash, loan, paid-up, and extended values--

`(i) for a policy issued under this section before the date of the enactment of the Fair Insurance Premiums for Disabled Veterans Act shall be based upon the Commissioners 1941 Standard Ordinary Table of Mortality and interest at the rate of 2 1/4 percent per year; and

`(ii) for a policy issued under this section on or after that date shall be based upon the 2001 Commissioners Standard Ordinary Table of Mortality and interest at the rate of 4.5 percent per year;

`(C) all settlements on policies involving annuities shall be calculated on the basis of the Annuity Table for 1949, and interest at the rate of 2 1/4 percent per year;

`(D) insurance granted under this section shall be on a nonparticipating basis;

`(E) all premiums and other collections for insurance under this section shall be credited directly to a revolving fund in the Treasury of the United States; and

`(F) any payments on such insurance shall be made directly from such fund.

`(3) Appropriations to the fund referred to in subparagraphs (E) and (F) of paragraph (2) are hereby authorized.

`(4) As to insurance issued under this section, waiver of premiums pursuant to section 602(n) of the National Service Life Insurance Act of 1940 and section 1912 of this title shall not be denied on the ground that the service-connected disability became total before the effective date of such insurance.

`(5) Administrative costs to the Government for the costs of the program of insurance under this section shall be paid from amounts credited to the fund under subparagraph (E) of paragraph (2), and payments for claims against the fund for amounts in excess of amounts credited to the fund under that subparagraph (after such administrative costs have been paid) shall be paid from appropriations to the fund.'.

(b) Conforming Amendment- Section 1982 of such title is amended by inserting `1922(a)(5),' after `1920(c),'.

SEC. 3. INCREASE IN MAXIMUM COVERAGE UNDER VETERANS' MORTGAGE LIFE INSURANCE PROGRAM TO $200,000.

(a) Increase- Subsection (b) of section 2106 of title 38, United States Code, is amended--

(1) by inserting `(1)' after `(b)';

(2) by designating the second, third, and fourth sentences as paragraphs (2), (3), and (4), respectively;

(3) in paragraph (1), as designated by paragraph (1) of this subsection, by striking `may not exceed' and all that follows through `on the housing unit.' and inserting `shall be the amount of the loan outstanding on the housing unit, except that--

`(A) coverage may not exceed $200,000; and

`(B) a veteran may elect, in writing, to be covered for less than the maximum coverage available.'; and

(4) in paragraph (2), as designated by paragraph (2) of this subsection, by striking `of such insurance' and inserting `of insurance provided a veteran under this section'.

(b) Conforming Amendment- Subsection (g) of such section is amended by striking `of this section or' and inserting `or an election under that subsection or by'.

(c) Effective Date- The amendments made by subsection (a) shall take effect at the end of the 120-day period beginning on the date of the enactment of this Act.

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