§1969. Deductions; payment; investment; expenses

(a)(1) During any period in which a member, on active duty or active duty for training under a call or order to such duty that does not specify a period of less than thirty-one days, is insured under Servicemembers' Group Life Insurance, there shall be deducted each month from the member's basic or other pay until separation or release from such duty an amount determined by the Secretary (which shall be the same for all such members) as the share of the cost attributable to insuring such member under such policy, less any costs traceable to the extra hazard of such duty in the uniformed service.

(2)(A) During any month in which a member is assigned to the Ready Reserve of a uniformed service under conditions which meet the qualifications of section 1965(5)(B) of this title, and is insured under a policy of insurance purchased by the Secretary, under section 1966 of this title, there shall be contributed from the appropriation made for active duty pay of the uniformed service concerned an amount determined by the Secretary (which shall be the same for all such members) as the share of the cost attributable to insuring such member under this policy, less any costs traceable to the extra hazards of such duty in the uniformed services. Any amounts so contributed on behalf of any individual shall be collected by the Secretary concerned from such individual (by deduction from pay or otherwise) and shall be credited to the appropriation from which such contribution was made.

(B) If an individual who is required pursuant to subparagraph (A) to make a direct remittance of costs to the Secretary concerned fails to make the required remittance within 60 days of the date on which such remittance is due, such individual's insurance with respect to which such remittance is required shall be terminated by the Secretary concerned. Such termination shall be made by written notice to the individual's official address and shall be effective 60 days after the date of such notice. Such termination of insurance may be vacated if, before the effective date of termination, the individual remits all amounts past due for such insurance and demonstrates to the satisfaction of the Secretary concerned that the failure to make timely remittances was justifiable.

(3) During any fiscal year, or portion thereof, that a member is on active duty or active duty for training under a call or order to such duty that specifies a period of less than thirty-one days, or is authorized or required to perform inactive duty training scheduled in advance by competent authority, and is insured under Servicemembers' Group Life Insurance, the Secretary concerned shall collect from the member (by deduction from pay or otherwise) an amount determined by the Secretary (which shall be the same for all such members) as the share of the cost attributable to insuring such member under such policy, less any costs traceable to the extra hazard of such duty in the uniformed service.

(4) Any amount not deducted from the basic or other pay of a member insured under Servicemembers' Group Life Insurance, or collected from the member by the Secretary concerned, if not otherwise paid, shall be deducted from the proceeds of any insurance thereafter payable. The initial monthly amount under paragraph (1) or (2) hereof, or fiscal year amount under paragraph (3) hereof, determined by the Secretary to be charged under this section for Servicemembers' Group Life Insurance may be continued from year to year, except that the Secretary may redetermine such monthly or fiscal year amounts from time to time in accordance with experience. No refunds will be made to any member of any amount properly deducted from the member's basic or other pay, or collected from the member by the Secretary concerned, to cover the insurance granted under Servicemembers' Group Life Insurance.

(b) For each month for which any member is so insured, there shall be contributed from the appropriation made for active duty pay of the uniformed service concerned an amount determined by the Secretary and certified to the Secretary concerned to be the cost of Servicemembers' Group Life Insurance which is traceable to the extra hazard of duty in the uniformed services. Effective January 1, 1970, such cost shall be determined by the Secretary on the basis of the excess mortality incurred by members and former members of the uniformed services insured under Servicemembers' Group Life Insurance above what their mortality would have been under peacetime conditions as such mortality is determined by the Secretary using such methods and data as the Secretary shall determine to be reasonable and practicable. The Secretary is authorized to make such adjustments regarding contributions from pay appropriations as may be indicated from actual experience.

(c) An amount equal to the first amount due on Servicemembers' Group Life Insurance may be advanced from current appropriations for active-service pay to any such member, which amount shall constitute a lien upon any service or other pay accruing to the person from whom such advance was made and shall be collected therefrom if not otherwise paid. No disbursing or certifying officer shall be responsible for any loss incurred by reason of such advance.

(d)(1) The sums withheld from the basic or other pay of members, or collected from them by the Secretary concerned, under subsection (a) of this section, and the sums contributed from appropriations under subsection (b) of this section, together with the income derived from any dividends or premium rate adjustments received from insurers shall be deposited to the credit of a revolving fund established in the Treasury of the United States. All premium payments and extra hazard costs on Servicemembers' Group Life Insurance and the administrative cost to the Department of insurance issued under this subchapter shall be paid from the revolving fund.

(2) The Secretary is authorized to set aside out of the revolving fund such amounts as may be required to meet the administrative costs to the Department of insurance issued under this subchapter and all current premium payments and extra hazard costs on any insurance policy or policies purchased under section 1966 of this title. The Secretary of the Treasury is authorized to invest in and to sell and retire special interest-bearing obligations of the United States for the account of the revolving fund. Such obligations issued for this purpose shall have maturities fixed with due regard for the needs of the fund and shall bear interest at a rate equal to the average market yield (computed by the Secretary of the Treasury on the basis of market quotations as of the end of the calendar month next preceding the date of issue) on all marketable interest-bearing obligations of the United States then forming a part of the public debt which are not due or callable until after the expiration of four years from the end of such calendar month; except that where such average market yield is not a multiple of one-eighth of 1 per centum, the rate of interest of such obligation shall be the multiple of one-eighth of 1 per centum nearest such market yield.

(3) Notwithstanding the provisions of section 1982 of this title, the Secretary shall, from time to time, determine the administrative costs to the Department which in the Secretary's judgment are properly allocable to insurance issued under this subchapter and shall transfer such cost from the revolving fund to the appropriation "General Operating Expenses, Department of Veterans Affairs".

(e) The Secretary of Defense shall prescribe regulations for the administration of the functions of the Secretaries of the military departments under this section. Such regulations shall prescribe such procedures as the Secretary of Defense, after consultation with the Secretary, may consider necessary to ensure that such functions are carried out in a timely and complete manner and in accordance with the provisions of this section, including specifically the provisions of subsection (a)(2) of this section relating to contributions from appropriations made for active duty pay.

(f)(1) No tax, fee, or other monetary payment may be imposed or collected by any State, or by any political subdivision or other governmental authority of a State, on or with respect to any premium paid under an insurance policy purchased under this subchapter.

(2) Paragraph (1) of this subsection shall not be construed to exempt any company issuing a policy of insurance under this subchapter from the imposition, payment, or collection of a tax, fee, or other monetary payment on the net income or profit accruing to or realized by that company from business conducted under this subchapter, if that tax, fee, or payment is applicable to a broad range of business activity.

(Added Pub. L. 89–214, §1(a), Sept. 29, 1965, 79 Stat. 881 , §769; amended Pub. L. 91–291, §4, June 25, 1970, 84 Stat. 329 ; Pub. L. 93–289, §§6, 10(2), May 24, 1974, 88 Stat. 168 , 172; Pub. L. 97–66, title IV, §402, Oct. 17, 1981, 95 Stat. 1031 ; Pub. L. 99–576, title VII, §701(39), Oct. 28, 1986, 100 Stat. 3293 ; Pub. L. 100–322, title III, §332(a), May 20, 1988, 102 Stat. 537 ; renumbered §1969 and amended Pub. L. 102–83, §§4(a)(3), (4), (b)(1), (2)(E), 5(a), (c)(1), Aug. 6, 1991, 105 Stat. 404–406 ; Pub. L. 103–337, div. A, title VI, §651(d), Oct. 5, 1994, 108 Stat. 2793 ; Pub. L. 103–446, title XII, §1201(e)(8), (i)(3), Nov. 2, 1994, 108 Stat. 4685 , 4688; Pub. L. 104–106, div. A, title VI, §647(a), Feb. 10, 1996, 110 Stat. 370 ; Pub. L. 104–275, title IV, §§402(d), 405(b)(1)(C), Oct. 9, 1996, 110 Stat. 3337 , 3339.)

Amendments

1996-Subsec. (a)(1). Pub. L. 104–275, §405(b)(1)(C), substituted "Servicemembers' Group" for "Servicemen's Group".

Subsec. (a)(2). Pub. L. 104–106 designated existing provisions as subpar. (A) and added subpar. (B).

Subsec. (a)(2)(A). Pub. L. 104–275, §402(d)(1), struck out "is assigned to the Reserve (other than the Retired Reserve) and meets the qualifications of section 1965(5)(C) of this title, or is assigned to the Retired Reserve and meets the qualifications of section 1965(5)(D) of this title," after "qualifications of section 1965(5)(B) of this title,".

Subsec. (a)(3), (4). Pub. L. 104–275, §405(b)(1)(C), substituted "Servicemembers' Group" for "Servicemen's Group" wherever appearing.

Subsecs. (b) to (d)(1). Pub. L. 104–275, §405(b)(1)(C), substituted "Servicemembers' Group" for "Servicemen's Group" wherever appearing.

Subsecs. (e) to (g). Pub. L. 104–275, §402(d)(2), (3), redesignated subsecs. (f) and (g) as (e) and (f), respectively, and struck out former subsec. (e) which related to premiums for Servicemen's Group Life Insurance for members assigned to the Retired Reserve of a uniformed service.

1994-Subsec. (a)(2). Pub. L. 103–337, §651(d)(1), substituted "is assigned to the Reserve" for "or is assigned to the Reserve" and inserted "or is assigned to the Retired Reserve and meets the qualifications of section 1965(5)(D) of this title," after "section 1965(5)(C) of this title,".

Subsec. (d)(3). Pub. L. 103–446, §1201(i)(3), substituted "Department of Veterans Affairs" for "Department".

Subsec. (e). Pub. L. 103–446, §1201(e)(8), substituted "subsections (a) and (c) of section 1971" for "sections 1971(a) and (c)" and "subsections (d) and (e) of section 1971" for "sections 1971(d) and (e)".

Pub. L. 103–337, §651(d)(2), substituted "subparagraph (C) or (D) of section 1965(5)" for "section 1965(5)(C)".

1991-Pub. L. 102–83, §5(a), renumbered section 769 of this title as this section.

Subsec. (a). Pub. L. 102–83, §5(c)(1), substituted "1965(5)(B)" for "765(5)(B)", "1965(5)(C)" for "765(5)(C)", and "1966" for "766" in par. (2).

Pub. L. 102–83, §4(b)(1), (2)(E), substituted "Secretary" for "Administrator" wherever appearing.

Subsec. (b). Pub. L. 102–83, §4(b)(1), (2)(E), substituted "Secretary" for "Administrator" wherever appearing.

Subsec. (d)(1). Pub. L. 102–83, §4(a)(3), (4), substituted "Department" for "Veterans' Administration".

Subsec. (d)(2). Pub. L. 102–83, §5(c)(1), substituted "1966" for "766".

Pub. L. 102–83, §4(b)(1), (2)(E), substituted "Secretary" for "Administrator".

Pub. L. 102–83, §4(a)(3), (4), substituted "Department" for "Veterans' Administration".

Subsec. (d)(3). Pub. L. 102–83, §5(c)(1), substituted "1982" for "782".

Pub. L. 102–83, §4(b)(1), (2)(E), substituted "Secretary" for "Administrator" and "Secretary's" for "Administrator's".

Pub. L. 102–83, §4(a)(3), (4), substituted "Department" for "Veterans' Administration" in two places.

Subsec. (e). Pub. L. 102–83, §5(c)(1), substituted "1965(5)(C)" for "765(5)(C)", "1971(a)" for "771(a)", "1966(b)" for "766(b)", and "1971(d)" for "771(d)".

Pub. L. 102–83, §4(b)(1), (2)(E), substituted "Secretary" for "Administrator" wherever appearing.

Subsec. (f). Pub. L. 102–83, §4(b)(1), (2)(E), substituted "Secretary" for "Administrator".

1988-Subsec. (g). Pub. L. 100–322 added subsec. (g).

1986-Subsec. (a)(1). Pub. L. 99–576, §701(39)(A), substituted "the member's" for "his".

Subsec. (a)(3). Pub. L. 99–576, §701(39)(B), substituted "the member" for "him".

Subsec. (a)(4). Pub. L. 99–576, §701(39)(C), substituted "the member" for "him" in two places and "the member's" for "his".

Subsec. (b). Pub. L. 99–576, §701(39)(D), substituted "the Administrator" for "he" before "shall determine".

Subsec. (d)(3). Pub. L. 99–576, §701(39)(E), substituted "the Administrator's" for "his".

Subsec. (e). Pub. L. 99–576, §701(39)(F), substituted "the Administrator" for "he" before "may determine".

1981-Subsec. (f). Pub. L. 97–66 added subsec. (f).

1974-Subsec. (a)(1). Pub. L. 93–289, §6(1), substituted "is insured under Servicemen's Group Life Insurance" for "is insured under a policy of insurance purchased by the Administrator, under section 766 of this title".

Subsec. (a)(2). Pub. L. 93–289, §6(2), added par. (2). Former par. (2) redesignated (3).

Subsec. (a)(3). Pub. L. 93–289, §6(1), (2), redesignated former par. (2) as (3), and substituted "is insured under Servicemen's Group Life Insurance" for "is insured under a policy of insurance purchased by the Administrator, under section 766 of this title." Former par. (3) redesignated (4).

Subsec. (a)(4). Pub. L. 93–289, §6(2), (3), redesignated former par. (3) as (4), and substituted "paragraph (1) or (2) hereof, or fiscal year amount under paragraph (3) hereof", for "subsection (1) hereof, or fiscal year amount under subsection (2) hereof", and "Servicemen's Group Life Insurance" for "this subchapter" in two places, and for "insurance under this subchapter".

Subsec. (b). Pub. L. 93–289, §6(4), substituted "Servicemen's Group Life Insurance" for "such insurance" in first sentence, and "Servicemen's Group Life Insurance" for "this subchapter" in second sentence.

Subsec. (c). Pub. L. 93–289, §6(5), substituted "Servicemen's Group Life Insurance" for "any such insurance".

Subsec. (d)(1). Pub. L. 93–289, §6(6), substituted "Servicemen's Group Life Insurance" for "any insurance policy or policies purchased under section 766 of this title".

Subsec. (d)(3). Pub. L. 93–289, §10(2), capitalized "Operating Expenses".

Subsec. (e). Pub. L. 93–289, §6(7), added subsec. (e).

1970-Subsec. (a). Pub. L. 91–291, §4(1), separated provisions covering deduction of the cost of insurance from the pay of members into provisions covering such deduction in the case of persons on active duty or active duty for training under a call or order to such duty that does not specify a period of not less than thirty-one days and provisions covering such deduction in the case of persons on active duty or active duty for training under a call or order to such duty specifying a period of less than thirty-one days or persons authorized or required to perform inactive duty training scheduled in advance by competent authority and inserted provision for the collection of sums from individuals by the Secretary concerned.

Subsec. (b). Pub. L. 91–291, §4(1), substituted the mortality which members and former members of the uniform services concerned would have been under peacetime conditions as determined by the Administrator for the mortality of the male civilian population of the United States of the same age as the median age of members of the uniformed services as shown by the records of the uniformed services, the primary insurer or insurers, and the Department of Health, Education, and Welfare as the standard against which the excess mortality suffered by members of the uniformed services would be measured to determine the extent to which the cost of insurance was traceable to the extra hazard of active duty in the uniformed services.

Subsec. (d)(1). Pub. L. 91–291, §4(2), inserted reference to collection of sums by Secretary concerned.

Effective Date of 1996 Amendment

Amendment by Pub. L. 104–106 effective Apr. 1, 1996, see section 647(c) of Pub. L. 104–106, set out as a note under section 1968 of this title.

Effective Date of 1988 Amendment

Section 332(b) of Pub. L. 100–322 provided that: "The amendment made by subsection (a) [amending this section] shall take effect with respect to premiums paid for periods beginning after June 30, 1988."

Effective Date of 1981 Amendment

Amendment by Pub. L. 97–66 effective Oct. 17, 1981, see section 701(b)(1) of Pub. L. 97–66, set out as a note under section 1114 of this title.

Effective Date of 1970 Amendment

Amendment by Pub. L. 91–291 effective June 25, 1970, see section 14(a) of Pub. L. 91–291, set out as a note under section 1317 of this title.

Section Referred to in Other Sections

This section is referred to in sections 1968, 1970, 1971, 1980 of this title.