Page:United States Statutes at Large Volume 117.djvu/2872

 PUBLIC LAW 108–189—DEC. 19, 2003

117 STAT. 2853

concerning the policy to the Secretary of Veterans Affairs as required by regulations prescribed by the Secretary. ‘‘(d) POLICY MODIFICATION.—Upon application for protection under this title, the insured and the insurer shall have constructively agreed to any policy modification necessary to give this title full force and effect. ‘‘SEC. 404. POLICIES ENTITLED TO PROTECTION AND LAPSE OF POLICIES.

50 USC app. 544.

‘‘(a) DETERMINATION.—The Secretary of Veterans Affairs shall determine whether a policy is entitled to protection under this title and shall notify the insured and the insurer of that determination. ‘‘(b) LAPSE PROTECTION.—A policy that the Secretary determines is entitled to protection under this title shall not lapse or otherwise terminate or be forfeited for the nonpayment of a premium, or interest or indebtedness on a premium, after the date on which the application for protection is received by the Secretary. ‘‘(c) TIME APPLICATION.—The protection provided by this title applies during the insured’s period of military service and for a period of two years thereafter. ‘‘SEC. 405. POLICY RESTRICTIONS.

50 USC app. 545.

‘‘(a) DIVIDENDS.—While a policy is protected under this title, a dividend or other monetary benefit under a policy may not be paid to an insured or used to purchase dividend additions without the approval of the Secretary of Veterans Affairs. If such approval is not obtained, the dividends or benefits shall be added to the value of the policy to be used as a credit when final settlement is made with the insurer. ‘‘(b) SPECIFIC RESTRICTIONS.—While a policy is protected under this title, cash value, loan value, withdrawal of dividend accumulation, unearned premiums, or other value of similar character may not be available to the insured without the approval of the Secretary. The right of the insured to change a beneficiary designation or select an optional settlement for a beneficiary shall not be affected by the provisions of this title. ‘‘SEC. 406. DEDUCTION OF UNPAID PREMIUMS.

50 USC app. 546.

‘‘(a) SETTLEMENT OF PROCEEDS.—If a policy matures as a result of a servicemember’s death or otherwise during the period of protection of the policy under this title, the insurer in making settlement shall deduct from the insurance proceeds the amount of the unpaid premiums guaranteed under this title, together with interest due at the rate fixed in the policy for policy loans. ‘‘(b) INTEREST RATE.—If the interest rate is not specifically fixed in the policy, the rate shall be the same as for policy loans in other policies issued by the insurer at the time the insured’s policy was issued. ‘‘(c) REPORTING REQUIREMENT.—The amount deducted under this section, if any, shall be reported by the insurer to the Secretary of Veterans Affairs. ‘‘SEC. 407. PREMIUMS AND INTEREST GUARANTEED BY UNITED STATES.

‘‘(a) GUARANTEE STATES.—

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50 USC app. 547.

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