National Life Insurance Premium Payment and Loan Modification – InsuranceNewsNet
DATES: This rule is effective
FOR MORE INFORMATION, CONTACT:
ADDITIONAL INFORMATION: The
The first commenter said that
We explained in our regulatory proposal that very few veteran policyholders choose to pay premiums on a semi-annual or quarterly basis. As part of recent
The first commenter also said that an article we cited in our regulatory proposal regarding lapse rates (
In the proposed rule, we stated that “research shows that lapse rates tend to increase with the number of premium payments made each year, with the notable exception of monthly payment methods”. Identifier. We cited this research because the study results support our efforts to minimize lapsed life insurance coverage by providing fewer and simpler payment options. We also cited this research because some of the commercial insurers we reviewed relied on this research as well as an earlier study from 2005 to limit premium payment options to reduce costs and minimize the expiration of coverage for their policyholders. See
Executive Orders 12866 and 13563
Executive Orders 12866 and 13563 direct agencies to evaluate the costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential effects on the economy). , environment, public health and safety, and other benefits; impacts and equity). Executive Order 13563 (Regulatory Improvement and Scrutiny) emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility.
Regulatory Flexibility Act
The Secretary hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities as defined in the Regulatory Flexibility Act, 5 USC 601-612. This final rule will only directly affect individuals and will not directly affect any small entities. Therefore, pursuant to 5 USC 605(b), the initial and final regulatory flexibility analysis requirements of 5 USC 603 and 604 do not apply.
The Unfunded Warrants Reform Act of 1995 requires, at 2 U.S.C. together, or by the private sector,
PAPER REDUCTION Act
This Final Rule does not contain any provision that constitutes information collection under the Red Tape Reduction Act of 1995 (44 USC 3501-3521).
Congressional Review Act
In accordance with the Congressional Review Act (5 USC
The Federal Domestic Assistance catalog numbers and titles for the programs covered by this document are 64.030, Life Insurance for Veterans – Nominal Amount of New Life Insurance Policies Issued, and 64.031, Life Insurance for Veterans. Veterans – Direct Payments for Insurance.
List of topics in 38 CFR Part 8 Disability Benefits, Life Insurance, Loan Programs – Veterans, Military Personnel, Veterans.
Rules Development Coordinator,
For the reasons set out in the preamble,
PART 8 – NATIONAL LIFE INSURANCE
1. The citation of authority for Part 8 continues to read as follows:
Authority: 38 USC 501, 1901-1929, 1981-1988, except where noted.
(vs) * * *
(2) Insureds may pay premiums in advance on an annual basis.
(3) Insured persons insured at
a. In paragraph (a), by deleting “which shall not exceed 94 percent” and adding “policy” before “reservation” in the first sentence.
b. By revising paragraph (d).
The revision reads as follows:
(d) Notwithstanding any other provision of this Section, the Variable Loan Rate shall not exceed 12% nor be less than 5% per annum. For policyholders with an existing fixed rate loan who subsequently request an additional loan on the same contract, the existing fixed rate loan will be refinanced into the new variable rate loan at the variable rate in effect at the time of the new loan request.
CFR Part: “38 CFR Part 8”
RIN number: “RIN 2900-AR29”
Quote: “87 FR 35419”
Federal Register page number: “35419”
“Rules and Regulations”