§ 2106. — Veterans' mortgage life insurance.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 38USC2106]
TITLE 38--VETERANS' BENEFITS
PART II--GENERAL BENEFITS
CHAPTER 21--SPECIALLY ADAPTED HOUSING FOR DISABLED VETERANS
Sec. 2106. Veterans' mortgage life insurance
(a) The United States shall automatically insure any eligible
veteran age 69 or younger who is or has been granted assistance in
securing a suitable housing unit under this chapter against the death of
the veteran unless the veteran (1) submits to the Secretary in writing
the veterans' election not to be insured under this section, or (2)
fails to respond in a timely manner to a request from the Secretary for
information on which the premium for such insurance can be based.
(b) The amount of insurance provided a veteran under this section
may not exceed the lesser of $90,000 or the amount of the loan
outstanding on the housing unit. The amount of such insurance shall be
reduced according to the amortization schedule of the loan and may not
at any time exceed the amount of the outstanding loan with interest. If
there is no outstanding loan on the housing unit, insurance is not
payable under this section. If an eligible veteran elects not to be
insured under this section, the veteran may thereafter be insured under
this section, but only upon submission of an application, payment of
required premiums, and compliance with such health requirements and
other terms and conditions as may be prescribed by the Secretary.
(c) The premiums charged a veteran for insurance under this section
shall be paid at such time and in such manner as the Secretary
prescribes. The rates for such premiums shall be based on such mortality
data as the Secretary considers appropriate to cover only the mortality
cost of insuring standard lives. In the case of a veteran receiving
compensation or other cash benefits paid to the veteran by the
Secretary, the Secretary shall deduct from such compensation or other
benefits the premiums charged the veteran under this section.
(d)(1) The United States shall bear the costs of insurance under
this section to the extent that such costs exceed premiums established
by the Secretary. Premiums collected on insurance under this section
shall be credited to the ``Veterans Insurance and Indemnities''
appropriation account, and all disbursements of insurance proceeds under
this section shall be made from that account.
(2) There are authorized to be appropriated to the Secretary for
such account such amounts as may be necessary to carry out this section.
(e) Any amount of insurance in force under this section on the date
of the death of an eligible veteran insured under this section shall be
paid to the holder of the mortgage loan, for payment of which the
insurance was granted, for credit on the loan indebtedness. Any
liability of the United States under such insurance shall be satisfied
when such payment is made. If the Secretary is the holder of the
mortgage loan, the insurance proceeds shall be credited to the loan
indebtedness and deposited in the Veterans Housing Benefit Program Fund
established by section 3722 of this title.
(f) The Secretary may prescribe such regulations relating to
eligibility for insurance under this section, the maximum amount of
insurance, the effective date of insurance, the maximum duration of
insurance, and other pertinent matters not specifically provided for in
this section as the Secretary determines are in the best interest of
veterans or the United States.
(g) The amount of the insurance in force at any time shall be the
amount necessary to pay the mortgage indebtedness in full, except as
otherwise limited by subsection (b) of this section or regulations
prescribed by the Secretary under this section.
(h) The Secretary shall issue to each veteran insured under this
section a certificate setting forth the benefits to which the veteran is
entitled under the insurance.
(i) Insurance under this section shall terminate upon whichever of
the following events first occurs:
(1) Satisfaction of the veteran's indebtedness under the loan
upon which the insurance is based.
(2) Termination of the veteran's ownership of the property
securing the loan.
(3) Discontinuance of payment of premiums by the veteran.
(j) Termination of life insurance under this section shall not
affect the guaranty or insurance of the loan by the Secretary.
(Added Pub. L. 92-95, Sec. 1, Aug. 11, 1971, 85 Stat. 320, Sec. 806;
amended Pub. L. 94-433, title III, Sec. 302, Sept. 30, 1976, 90 Stat.
1377; Pub. L. 99-576, title VII, Sec. 701(49), Oct. 28, 1986, 100 Stat.
3295; Pub. L. 100-322, title III, Sec. 333(a)(1), May 20, 1988, 102
Stat. 537; renumbered Sec. 2106 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. 102-568, title II, Sec. 204(a), Oct. 29, 1992, 106 Stat. 4325;
Pub. L. 103-446, title XII, Sec. 1201(h)(2), Nov. 2, 1994, 108 Stat.
4688; Pub. L. 105-368, title VI, Sec. 602(e)(2), Nov. 11, 1998, 112
Stat. 3347; Pub. L. 107-330, title III, Sec. 302, Dec. 6, 2002, 116
Stat. 2824.)
Amendments
2002--Subsec. (a). Pub. L. 107-330, Sec. 302(1), inserted ``age 69
or younger'' after ``any eligible veteran''.
Subsec. (i)(2) to (4). Pub. L. 107-330, Sec. 302(2), redesignated
pars. (3) and (4) as (2) and (3), respectively, and struck out former
par. (2) which read as follows: ``The veteran's seventieth birthday.''
1998--Subsec. (e). Pub. L. 105-368 substituted ``deposited in the
Veterans Housing Benefit Program Fund established by section 3722 of
this title'' for ``, as appropriate, deposited in either the direct loan
or loan guaranty revolving fund established by section 3723 or 3724 of
this title, respectively''.
1994--Pub. L. 103-446 substituted ``Veterans' mortgage life
insurance'' for ``Veterans' Mortgage Life Insurance'' as section
catchline.
1992--Subsec. (b). Pub. L. 102-568 struck out ``initial'' after
``The'' and substituted ``$90,000'' for ``$40,000''.
1991--Pub. L. 102-83, Sec. 5(a), renumbered section 806 of this
title as this section.
Subsecs. (a) to (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 ``3723 or
3724'' for ``1823 or 1824''.
Pub. L. 102-83, Sec. 4(b)(1), (2)(E), substituted ``Secretary'' for
``Administrator''.
Subsecs. (f) to (h), (j). Pub. L. 102-83, Sec. 4(b)(1), (2)(E),
substituted ``Secretary'' for ``Administrator'' wherever appearing.
1988--Pub. L. 100-322 amended section generally, substituting
provisions relating to veterans' mortgage life insurance for former
provisions relating to mortgage protection life insurance.
1986--Subsec. (b). Pub. L. 99-576, Sec. 701(49)(A), substituted
``the veteran's'' for ``his''.
Subsec. (c). Pub. L. 99-576, Sec. 701(49)(B), substituted ``the
veteran'' for ``he'' before ``may thereafter''.
Subsec. (d). Pub. L. 99-576, Sec. 701(49)(C), substituted ``the
veteran's'' for ``he'' in last sentence.
Subsec. (g)(2). Pub. L. 99-576, Sec. 701(49)(D)(i), substituted
``the Administrator'' for ``he'' in two places, ``the Administrator's''
for ``his'', and ``the Administrator'' for ``him'' in two places.
Subsec. (g)(3). Pub. L. 99-576, Sec. 701(49)(D)(ii), substituted
``the veteran'' for ``he''.
Subsec. (g)(5). Pub. L. 99-576, Sec. 701(49)(D)(iii), substituted
``the Administrator'' for ``him'' in two places.
Subsec. (h). Pub. L. 99-576, Sec. 701(49)(E), substituted ``the
Administrator's'' for ``his'' in first sentence and ``the veteran's''
for ``his'' in second sentence.
1976--Subsec. (c). Pub. L. 94-433 substituted $40,000 for $30,000.
Effective Date of 1998 Amendment
Pub. L. 105-368, title VI, Sec. 602(f), Nov. 11, 1998, 112 Stat.
3348, provided that: ``This title [enacting sections 3722 and 3771 to
3775 of this title, amending this section and sections 3702, 3703, 3711,
3720, 3727, 3729, 3733 to 3735, and 3763 of this title, repealing
sections 3723 to 3725 of this title, and enacting provisions set out as
a note under section 3722 of this title] and the amendments made by this
title shall take effect on October 1, 1998.''
Effective Date of 1992 Amendment
Amendment by Pub. L. 102-568 effective Dec. 1, 1992, see section 205
of Pub. L. 102-568, set out as an Effective Date note under section
1922A of this title.
Effective Date of 1988 Amendment
Section 333(b) of Pub. L. 100-322 provided that: ``The amendment
made by subsection (a) [amending this section] shall take effect on the
first day of the fourth month beginning after the date of the enactment
of this Act [May 20, 1988].''
Effective Date of 1976 Amendment
Amendment by Pub. L. 94-433 effective Oct. 1, 1976, see section 406
of Pub. L. 94-433, set out as a note under section 1101 of this title.
Savings Provision; Discontinuance of Contract Program; Definition
Section 333(c)-(e) of Pub. L. 100-322 provided that:
``(c) Savings Provision.--Mortgage protection life insurance granted
to any veteran under the former section 806 shall continue in force with
the United States as insurer, subject to the terms of subsection (d).
Nothing in that subsection shall impair any rights of any veteran or
mortgage loan holder under the former section 806 that matured before
the effective date specified in subsection (b) [see Effective Date of
1988 Amendment note above].
``(d) Discontinuance of Contract Program.--(1) Effective as of the
effective date specified in subsection (b), the Administrator shall
discontinue the policy of insurance purchased in accordance with the
former section 806.
``(2) All premiums collected or received by the insurer on or after
such effective date under a policy purchased under the former section
806 shall be promptly forwarded to the Administrator and shall be
credited to the `Veterans Insurance and Indemnities' appropriation
account. Any positive balance of the contingency reserve maintained by
the insurer under such policy remaining after all charges have been made
shall be payable to the Administrator and shall be deposited by the
Administrator in such account, except that such balance may, upon the
election of the insurer, be paid by the insurer in equal monthly
installments over a period of not more than two years beginning on the
date, after such effective date, that the Administrator specifies.
``(e) Former Section 806 Defined.--For the purpose of subsections
(c) and (d), the term `former section 806' means section 806 [this
section] of title 38, United States Code, as in effect on the day before
the effective date specified in subsection (b).''
