---
kind: "section"
citation: "10 U.S.C. § 12531"
title: "10"
title_heading: "Armed Forces"
number: "12531"
heading: "Purchase of insurance"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/10/12531"
units:
  - "Subtitle E — Reserve Components"
  - "Part II — Personnel Generally"
  - "Chapter 1214 — Ready Reserve Mobilization Income Insurance"
---

# §12531. Purchase of insurance

- (a) **Purchase Authorized.—** The [Secretary](/usc/10/12521.md?p=4) may, instead of or in addition to underwriting the [insurance program](/usc/10/12521.md?p=1) through the [Fund](/usc/10/12521.md?p=7), purchase from one or more insurance companies a policy or policies of group insurance in order to provide the benefits required under this chapter. The [Secretary](/usc/10/12521.md?p=4) may waive any requirement for full and open competition in order to purchase an insurance policy under this subsection.
- (b) **Eligible Insurers.—** In order to be eligible to sell insurance to the [Secretary](/usc/10/12521.md?p=4) for purposes of [subsection (a)](#a), an insurance company shall—
  - (1) be licensed to issue insurance in each of the 50 [States](/usc/10/18232.md?p=1) and in the District of Columbia; and
  - (2) as of the most recent December 31 for which information is available to the [Secretary](/usc/10/12521.md?p=4), have in effect at least one percent of the total amount of insurance that all such insurance companies have in effect in the [United States](/usc/10/101.md?p=a-1).
- (c) **Administrative Provisions.—**
  - (1) An insurance company that issues a policy for purposes of [subsection (a)](#a) shall establish an administrative office at a place and under a name designated by the [Secretary](/usc/10/12521.md?p=4).
  - (2) For the purposes of carrying out this chapter, the [Secretary](/usc/10/12521.md?p=4) may use the [facilities](/usc/10/18232.md?p=2) and services of any insurance company issuing any policy for purposes of [subsection (a)](#a), may designate one such company as the representative of the other companies for such purposes, and may contract to [pay](/usc/10/101.md?p=a-15) a reasonable fee to the designated company for its services.
- (d) **Reinsurance.—** The [Secretary](/usc/10/12521.md?p=4) shall arrange with each insurance company issuing any policy for purposes of [subsection (a)](#a) to reinsure, under conditions approved by the [Secretary](/usc/10/12521.md?p=4), portions of the total amount of the insurance under such policy or policies with such other insurance companies (which meet qualifying criteria prescribed by the [Secretary](/usc/10/12521.md?p=4)) as may elect to participate in such reinsurance.
- (e) **Termination.—** The [Secretary](/usc/10/12521.md?p=4) may at any time terminate any policy purchased under this section.

## Source credit

(Added Pub. L. 104–106, div. A, title V, § 512(a)(1), Feb. 10, 1996, 110 Stat. 304.)