
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 38USC1971]

 
                      TITLE 38--VETERANS' BENEFITS
 
                        PART II--GENERAL BENEFITS
 
                          CHAPTER 19--INSURANCE
 
          SUBCHAPTER III--SERVICEMEMBERS' GROUP LIFE INSURANCE
 
Sec. 1971. Basic tables of premiums; readjustment of rates

    (a) Each policy or policies purchased under section 1966 of this 
title shall include for the first policy year a schedule of basic 
premium rates by age which the Secretary shall have determined on a 
basis consistent with the lowest schedule of basic premium rates 
generally charged for new group life insurance policies issued to large 
employers, this schedule of basic premium rates by age to be applied, 
except as otherwise provided in this section, to the distribution by age 
of the amount of group life insurance under the policy at its date of 
issue to determine an average basic premium per $1,000 of insurance. 
Each policy so purchased shall also include provisions whereby the basic 
rates of premium determined for the first policy year shall be continued 
for subsequent policy years, except that they may be readjusted for any 
subsequent year, based on the experience under the policy, such 
readjustment to be made by the insurance company or companies issuing 
the policy on a basis determined by the Secretary in advance of such 
year to be consistent with the general practice of life insurance 
companies under policies of group life insurance issued to large 
employers.
    (b) The total premiums for Servicemembers' Group Life Insurance 
shall be the sum of the amounts computed according to the provisions of 
subsection (a) above and the estimated cost traceable to the extra 
hazard of active duty in the uniformed services as determined by the 
Secretary, subject to the provision that such estimated costs traceable 
to the extra hazard shall be retroactively readjusted annually in 
accordance with section 1969(b).
    (c) Each policy so purchased shall include a provision that, in the 
event the Secretary determines that ascertaining the actual age 
distribution of the amounts of group life insurance in force at the date 
of issue of the policy or at the end of the first or any subsequent year 
of insurance thereunder would not be possible except at a 
disproportionately high expense, the Secretary may approve the 
determination of a tentative average group life premium, for the first 
or any subsequent policy year, in lieu of using the actual age 
distribution. Such tentative average premium rate shall be redetermined 
by the Secretary during any policy year upon request by the insurance 
company or companies issuing the policy, if experience indicates that 
the assumptions made in determining the tentative average premium rate 
for that policy year were incorrect.
    (d) Each policy so purchased shall contain a provision stipulating 
the maximum expense and risk charges for the first policy year, which 
charges shall have been determined by the Secretary on a basis 
consistent with the general level of such charges made by life insurance 
companies under policies of group life insurance issued to large 
employers. Such maximum charges shall be continued from year to year, 
except that the Secretary may redetermine such maximum charges for any 
year either by agreement with the insurance company or companies issuing 
the policy or upon written notice given by the Secretary to such 
companies at least one year in advance of the beginning of the year for 
which such redetermined maximum charges will be effective.
    (e) Each such policy shall provide for an accounting to the 
Secretary not later than ninety days after the end of each policy year, 
which shall set forth, in a form approved by the Secretary, (1) the 
amounts of premiums actually accrued under the policy from its date of 
issue to the end of such policy year, (2) the total of all mortality and 
other claim charges incurred for that period, and (3) the amounts of the 
insurers' expense and risk charge for that period. Any excess of the 
total of item (1) over the sum of items (2) and (3) shall be held by the 
insurance company or companies issuing the policy as a special 
contingency reserve to be used by such insurance company or companies 
for charges under such policy only, such reserve to bear interest at a 
rate to be determined in advance of each policy year by the insurance 
company or companies issuing the policy, which rate shall be approved by 
the Secretary as being consistent with the rates generally used by such 
company or companies for similar funds held under other group life 
insurance policies. If and when the Secretary determines that such 
special contingency reserve has attained an amount estimated by the 
Secretary to make satisfactory provision for adverse fluctuations in 
future charges under the policy, any further excess shall be deposited 
to the credit of the revolving fund established under section 1969(d)(1) 
of this title. If and when such policy is discontinued, and if after all 
charges have been made, there is any positive balance remaining in such 
special contingency reserve, such balance shall be deposited to the 
credit of the revolving fund, subject to the right of the insurance 
company or companies issuing the policy to make such deposit in equal 
monthly installments over a period of not more than two years.

(Added Pub. L. 89-214, Sec. 1(a), Sept. 29, 1965, 79 Stat. 884, 
Sec. 771; amended Pub. L. 93-289, Sec. 8, May 24, 1974, 88 Stat. 169; 
renumbered Sec. 1971 and amended Pub. L. 102-83, Secs. 4(b)(1), (2)(E), 
5(a), (c)(1), Aug. 6, 1991, 105 Stat. 404-406; Pub. L. 104-275, title 
IV, Sec. 405(b)(1)(E), Oct. 9, 1996, 110 Stat. 3339.)


                               Amendments

    1996--Subsec. (b). Pub. L. 104-275 substituted ``Servicemembers' 
Group'' for ``Servicemen's Group''.
    1991--Pub. L. 102-83, Sec. 5(a), renumbered section 771 of this 
title as this section.
    Subsec. (a). Pub. L. 102-83, Sec. 5(c)(1), substituted ``1966'' for 
``766''.
    Pub. L. 102-83, Sec. 4(b)(1), (2)(E), substituted ``Secretary'' for 
``Administrator'' in two places.
    Subsec. (b). Pub. L. 102-83, Sec. 5(c)(1), substituted ``1969(b)'' 
for ``769(b)''.
    Pub. L. 102-83, Sec. 4(b)(1), (2)(E), substituted ``Secretary'' for 
``Administrator''.
    Subsecs. (c), (d). Pub. L. 102-83, Sec. 4(b)(1), (2)(E), substituted 
``Secretary'' for ``Administrator'' wherever appearing.
    Subsec. (e). Pub. L. 102-83, Sec. 5(c)(1), substituted 
``1969(d)(1)'' for ``769(d)(1)''.
    Pub. L. 102-83, Sec. 4(b)(1), (2)(E), substituted ``Secretary'' for 
``Administrator'' wherever appearing.
    1974--Subsec. (b). Pub. L. 93-289, Sec. 8(1), substituted ``premiums 
for Servicemen's Group Life Insurance'' for ``premiums for the policy or 
policies''.
    Subsec. (e). Pub. L. 93-289, Sec. 8(2), substituted ``section 
769(d)(1) of this title'' for ``section 766 of this title''.

                  Section Referred to in Other Sections

    This section is referred to in section 1977 of this title.
