50 U.S.C. § 3977: Premiums and interest…

Summary

The United States guarantees payment of premiums and interest (at the rate set in section 3976) for policies covered by this subchapter. If the government does not pay an amount before the policy’s protection ends, the insurer must treat that unpaid amount as a loan on the policy. If the policy’s cash surrender value is less than what is owed when protection ends, the policy ends and the United States pays the insurer the shortfall. Any payment the United States makes becomes a debt the insured must repay. The government can collect it by withholding money it owes the insured or by other legal means. That debt cannot be wiped out in bankruptcy. Money repaid goes back to the fund used to pay claims under this subchapter.

Title 50, §3977

War and National Defense, Source: USLM XML via OLRC

(a)Guarantee of premiums and interest by the United States

(1)Guarantee

Payment of premiums, and interest on premiums at the rate specified in section 3976 of this title, which become due on a policy under the protection of this subchapter is guaranteed by the United States. If the amount guaranteed is not paid to the insurer before the period of insurance protection under this subchapter expires, the amount due shall be treated by the insurer as a policy loan on the policy.

(2)Policy termination

If, at the expiration of insurance protection under this subchapter, the cash surrender value of a policy is less than the amount due to pay premiums and interest on premiums on the policy, the policy shall terminate. Upon such termination, the United States shall pay the insurer the difference between the amount due and the cash surrender value.

(b)Recovery from insured of amounts paid by the United States

(1)Debt payable to the United States

The amount paid by the United States to an insurer under this subchapter shall be a debt payable to the United States by the insured on whose policy payment was made.

(2)Collection

Such amount may be collected by the United States, either as an offset from any amount due the insured by the United States or as otherwise authorized by law.

(3)Debt not dischargeable in bankruptcy

Such debt payable to the United States is not dischargeable in bankruptcy proceedings.

(c)Crediting of amounts recovered

Any amounts received by the United States as repayment of debts incurred by an insured under this subchapter shall be credited to the appropriation for the payment of claims under this subchapter.

Notes & Related Subsidiaries

Editorial Notes

Codification Section was formerly classified to section 547 of the former Appendix to this title prior to editorial reclassification and renumbering as this section.

Prior Provisions

A prior section 407 of act Oct. 17, 1940, ch. 888, art. IV, 54 Stat. 1185; Oct. 6, 1942, ch. 581, § 13, 56 Stat. 775; Pub. L. 85–857, § 14(76), Sept. 2, 1958, 72 Stat. 1272; Pub. L. 102–12, § 9(17), Mar. 18, 1991, 105 Stat. 40, related to

Regulations

and finality of determinations, prior to the general amendment of this Act by Pub. L. 108–189. See section 3978 and 3979 of this title.

Statutory Notes and Related Subsidiaries

Effective Date

Section applicable to any case not final before Dec. 19, 2003, see section 3 of Pub. L. 108–189, set out as a note under section 3901 of this title.

§3977 Premiums and Interest Guaranteed by United States