|Soldiers & Sailors Civil Relief Act (SSCRA)|
|Chapter 5, Insurance|
Purpose and Scope
The purpose of this chapter is to discuss Article IV, section 400 through 407 [50 U.S.C. App. §§'' 540-547], of the Soldiers' and Sailors' Civil Relief Act. These sections provide a means by which a service member may have the U.S. Office of Veterans Affairs guarantee payment of premiums on certain types of commercial life insurance contracts. Relatively few service members have applied for benefits under these sections, probably because the law merely provides a moratorium on premiums and does not relieve the service member from liability for repayment of the premiums. The 1991 amendments concerning professional liability insurance, Article VII §' 702 [50 U.S.C. App. §' 592] and reinstatement of health insurance, Article VII §' 703 [50 U.C.C. App. §' 593] also will be discussed.
Article IV, Sections 400-407
General. The sections in Article IV are designed to provide a means by which any person entering the armed services may apply for continued protection by commercial life insurance. Upon proper application, a service member may have the premiums and interest for certain types of commercial life insurance guaranteed for his/her period of military service and for two years thereafter.
The Secretary of Veterans Affairs is charged with supervising the implementation of these sections. Section 407 authorizes and directs the Secretary of Veterans Affairs to promulgate regulations and procedures necessary to implement the provisions of sections 400 through 407. Pursuant to this authority, the administrator has prescribed regulations that may be found in volume 38 of the Code of Federal Regulations, Part 7.
Application. The provisions of the sections apply to commercial life insurance policies taken out by any person in the military service of the United States whose life is insured under and who is the owner of such policy The policy must be in force on a premium paying basis at the time the service member applies for benefits. The service member must have taken out the policy and paid one premium not less than 180 days before the date the insured entered military service. Also, the maximum amount of life insurance guaranteed for any one individual is $10,000.
Attorneys should examine policy provisions to determine eligibility. A policy containing a provision that limits or eliminates liability for death arising from or in connection with military service, or any activity that the insured may be called upon to perform in connection with his military service, is not eligible for protection under the Act. A policy that requires the insured service member to pay an additional premium because of military service is also outside the purview of the Act
Nature and extent of relief. An individual entitled to the benefits of the Act may request governmental guarantee of premiums by filing Veterans Affairs Form 9-380 with his/her insurance company and forwarding a copy of the application to the U.S. Department of Veterans Affairs. The U.S. Department of Veterans Affairs will then determine whether the policy is covered by the sections in Article IV or not. The U.S. Department of Veterans Affairs determination is final and is not subject to review by any other official, agency, or court.
Unlike several other sections, such as sections 201 and 301, which require the court to find that the service member was materially affected by military service, these sections do not require a specific finding of material effect. Hence, any person in military service could apply for relief in accordance with these sections. Relief may be granted regardless of the impact of military service on the individual's ability to pay the premiums.
Once the U.S. Department of Veterans Affairs deems a policy to be covered by Article IV, the policy will not lapse, terminate, or be forfeited because of the service member's failure to make premium payments or pay any indebtedness or interest due during this period of military service or for 2 years after the expiration of such service. During this period, the government does not pay the premiums for the service member but simply guarantees that the premiums will be paid at the end of the period.
The insured service member must repay the unpaid premiums and interest no later than 2 years after the expiration of his/her term of military service. If he/she fails to pay these amounts by the end of this 2-year period, the amount then due is treated by the insurance company as a loan on the policy. This assumes that the policy has a sufficient cash surrender value to cover the amount of the unpaid premiums and interest. If the cash surrender value of the policy is less than the amount owed, the insurance company may terminate the policy and the United States will pay the insurance company the difference between the cash surrender value and the amount of the then outstanding debt. Also, if the policy matures as a result of death or by any other means during the protected period, the insurance company is required to deduct from the amount of the settlement the unpaid premiums and interest that were guaranteed by the U.S. Department of Veterans Affairs.
If the United States is required to pay any amount to an insurance company under the provisions of Article IV, the amount paid becomes a debt due the United States by the insured. This amount may be deducted from any other amounts due the insured by the United States. If there is no other sum of money due the insured by the United States, a civil action may be brought to recover the sum due.
(50 U.S.C. App. §' 540)
Persons entitled to benefits
(50 U.S.C. App. §' 541)
Form of application
(50 U.S.C. App. §' 542)
Above Information Courtesy of United States Army JAG Corps