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Notes

5 U.S.C. §§ 8709–8712

4 sections in range

§8709. Insurance policies

5 U.S.C. § 8709

(a)
The Office of Personnel Management, without regard to section 6101(b) to (d) of title 41, may purchase from one or more life insurance companies a policy or policies of group life and accidental death and dismemberment insurance to provide the benefits specified by this chapter. A company must meet the following requirements:
(1)
It must be licensed to transact life and accidental death and dismemberment insurance under the laws of 48 of the States and the District of Columbia.
(2)
It must have in effect, on the most recent December 31 for which information is available to the Office, an amount of employee group life insurance equal to at least 1 percent of the total amount of employee group life insurance in the United States in all life insurance companies.
(b)
A company issuing a policy under subsection (a) of this section shall establish an administrative office under a name approved by the Office.
(c)
The Office at any time may discontinue a policy purchased from a company under subsection (a) of this section.
(d)
(1)
The provisions of any contract under this chapter which relate to the nature or extent of coverage or benefits (including payments with respect to benefits) shall supersede and preempt any law of any State or political subdivision thereof, or any regulation issued thereunder, which relates to group life insurance to the extent that the law or regulation is inconsistent with the contractual provisions.
(2)
For the purpose of this section, “State” means a State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and a territory or possession of the United States.
Notes, amendments, and revision history

(Pub. L. 89–554, Sept. 6, 1966, 80 Stat. 596; Pub. L. 95–454, title IX, § 906(a)(2), (3), Oct. 13, 1978, 92 Stat. 1224; Pub. L. 96–427, § 5(a), Oct. 10, 1980, 94 Stat. 1834; Pub. L. 111–350, § 5(a)(11), Jan. 4, 2011, 124 Stat. 3841.)

Historical and Revision Notes
Derivation U.S. Code Revised Statutes and
Statutes at Large
5 U.S.C. 2096 (less (c)–(e)). Aug. 17, 1954, ch. 752, § 7 (less (c)–(e)), 68 Stat. 739.

In subsection (a), the words “as determined by it” are omitted as unnecessary.

Standard changes are made to conform with the definitions applicable and the style of this title as outlined in the preface to the report.

Editorial Notes

Amendments

2011—Subsec. (a). Pub. L. 111–350 substituted “section 6101(b) to (d) of title 41” for “section 5 of title 41” in introductory provisions.

1980—Subsec. (d). Pub. L. 96–427 added subsec. (d).

1978—Subsecs. (a) to (c). Pub. L. 95–454 substituted “Office of Personnel Management” and “Office” for “Civil Service Commission” and “Commission”, respectively, wherever appearing.

Statutory Notes and Related Subsidiaries

Effective Date of 1980 Amendment

Amendment by Pub. L. 96–427 effective Oct. 10, 1980, with the amendment to have no effect in case of an employee who died, was separated, or retired before Oct. 10, 1980, see section 10(a) of Pub. L. 96–427, set out as a note under section 8701 of this title.

Effective Date of 1978 Amendment

Amendment by Pub. L. 95–454 effective 90 days after Oct. 13, 1978, see section 907 of Pub. L. 95–454, set out as a note under section 1101 of this title.

§8710. Reinsurance

5 U.S.C. § 8710

(a)
The Office of Personnel Management shall arrange with a company issuing a policy under this chapter for the reinsurance, under conditions approved by the Office, of portions of the total amount of insurance under the policy, determined under this section, with other life insurance companies which elect to participate in the reinsurance.
(b)
The Office shall determine for and in advance of a policy year which companies are eligible to participate as reinsurers and the amount of insurance under a policy which is to be allocated to the issuing company and to reinsurers. The Office shall make this determination at least every 3 years and when a participating company withdraws.
(c)
The Office shall establish a formula under which the amount of insurance retained by an issuing company after ceding reinsurance, and the amount of reinsurance ceded to each reinsurer, is in proportion to the total amount of each company’s group life insurance, excluding insurance purchased under this chapter, in force in the United States on the determination date, which is the most recent December 31 for which information is available to the Office. In determining the proportions, the portion of a company’s group life insurance in force on the determination date in excess of $100,000,000 shall be reduced by—
(1)
25 percent of the first $100,000,000 of the excess;
(2)
50 percent of the second $100,000,000 of the excess;
(3)
75 percent of the third $100,000,000 of the excess; and
(4)
95 percent of the remaining excess.

However, the amount retained by or ceded to a company may not exceed 25 percent of the amount of the company’s total life insurance in force in the United States on the determination date.

(d)
A fraternal benefit association which is—
(1)
licensed to transact life insurance under the laws of a State or the District of Columbia; and
(2)
engaged in issuing insurance certificates on the lives of employees of the United States exclusively;

is eligible to act as a reinsuring company and may be allocated an amount of reinsurance equal to 25 percent of its total life insurance in force on employees of the United States on the determination date named by subsection (c) of this section.

(e)
An issuing company or reinsurer is entitled, as a minimum, to be allocated an amount of insurance under the policy equal to any reduction from December 31, 1953, to the determination date, in the amount of the company’s group life insurance under policies issued to associations of employees of the United States. However, any increase under this subsection in the amount allocated is reduced by the amount in force on the determination date of any policy covering life insurance agreements assumed by the Office.
(f)
The Office may modify the computations under this section as necessary to carry out the intent of this section.
Notes, amendments, and revision history

(Pub. L. 89–554, Sept. 6, 1966, 80 Stat. 596; Pub. L. 95–454, title IX, § 906(a)(2), (3), Oct. 13, 1978, 92 Stat. 1224.)

Historical and Revision Notes
Derivation U.S. Code Revised Statutes and
Statutes at Large
5 U.S.C. 2096(c)–(e). Aug. 17, 1954, ch. 752, § 7(c)–(e), 68 Stat. 739.
Aug. 11, 1955, ch. 794, § 3, 69 Stat. 677.

The section is reorganized to clarify the steps in the computation of the insurance allocable to issuing and reinsuring companies.

In subsections (c) and (d), references to the first determination date, December 31, 1953, are omitted as executed.

Standard changes are made to conform with the definitions applicable and the style of this title as outlined in the preface to the report.

Editorial Notes

Amendments

1978—Subsecs. (a) to (c), (e), (f). Pub. L. 95–454 substituted “Office of Personnel Management” and “Office” for “Civil Service Commission” and “Commission”, respectively, wherever appearing.

Statutory Notes and Related Subsidiaries

Effective Date of 1978 Amendment

Amendment by Pub. L. 95–454 effective 90 days after Oct. 13, 1978, see section 907 of Pub. L. 95–454, set out as a note under section 1101 of this title.

§8711. Basic tables of premium rates

5 U.S.C. § 8711

(a)
A policy purchased under this chapter shall include, for the first policy year, basic tables of premium rates as follows:
(1)
For group life insurance, a schedule of basic premium rates by age which the Office of Personnel Management determines to be consistent with the lowest schedule of basic premium rates generally charged for new group life insurance policies issued to large employers.
(2)
For group accidental death and dismemberment insurance, a basic premium rate which the Office determines is consistent with the lowest rate generally charged for new group accidental death and dismemberment policies issued to large employers.

The schedule for group life insurance, except as otherwise provided by this section, shall be applied to the distribution by age of the amounts of group life insurance under the policy at its date of issuance to determine an average basic premium rate per $1,000 of life insurance.

(b)
The policy shall provide that the basic premium rates determined for the first policy year continue for later policy years except as readjusted for a later year based on experience under the policy. The company issuing the policy may make the readjustment on a basis that the Office determines in advance of the policy year is consistent with the general practice of life insurance companies under policies of group life and group accidental death and dismemberment insurance issued to large employers.
(c)
The policy shall provide that if the Office determines that ascertaining the actual age distribution of the amounts of group life insurance in force at the date of issue of the policy or at the end of the first or any later year of insurance thereunder would not be possible except at a disproportionately high expense, the Office may approve the determination of a tentative average group life premium rate, for the first or any later policy year, instead of using the actual age distribution. The Office, on request by the company issuing the policy, shall redetermine the tentative average premium rate during any policy year, if experience indicates that the assumptions made in determining that rate were incorrect for that year.
(d)
The policy shall stipulate the maximum expense and risk charges for the first policy year. The Office shall determine these charges on a basis consistent with the general level of charges made by life insurance companies under policies of group life and accidental death and dismemberment insurance issued to large employers. The maximum charges continue from year to year, except that the Office may redetermine them for any year either by agreement with the company issuing the policy or on written notice given to the company at least 1 year before the beginning of the year for which the redetermined maximum charges will be effective.
Notes, amendments, and revision history

(Pub. L. 89–554, Sept. 6, 1966, 80 Stat. 597; Pub. L. 95–454, title IX, § 906(a)(2), (3), Oct. 13, 1978, 92 Stat. 1224.)

Historical and Revision Notes
Derivation U.S. Code Revised Statutes and
Statutes at Large
5 U.S.C. 2097 (less (d)). Aug. 17, 1954, ch. 752, § 8 (less (d)), 68 Stat. 740.

In subsection (a), the word “policy” is substituted for “policy or policies” on authority of 1 U.S.C. 1. In subsections (b) and (c), the words “The policy” are substituted for “Each policy so purchased”. In subsections (b), (c), and (d), the word “insurance”, preceding the word “company”, is omitted as unnecessary; and the word “company” is substituted for “company or companies” on authority of 1 U.S.C. 1.

Standard changes are made to conform with the definitions applicable and the style of this title as outlined in the preface to the report.

Editorial Notes

Amendments

1978—Subsecs. (a) to (d). Pub. L. 95–454 substituted “Office of Personnel Management” and “Office” for “Civil Service Commission” and “Commission”, respectively, wherever appearing.

Statutory Notes and Related Subsidiaries

Effective Date of 1978 Amendment

Amendment by Pub. L. 95–454 effective 90 days after Oct. 13, 1978, see section 907 of Pub. L. 95–454, set out as a note under section 1101 of this title.

§8712. Annual accounting; special contingency reserve

5 U.S.C. § 8712

A policy purchased under this chapter shall provide for an accounting to the Office of Personnel Management not later than 90 days after the end of each policy year. The accounting shall set forth, in a form approved by the Office—
(1)
the amounts of premiums actually accrued under the policy from its date of issue to the end of the policy year;
(2)
the total of all mortality and other claim charges incurred for that period; and
(3)
the amounts of the insurers’ expense and risk charges for that period.
An excess of the total of paragraph (1) of this section over the sum of paragraphs (2) and (3) of this section shall be held by the company issuing the policy as a special contingency reserve to be used by the company only for charges under the policy. The reserve shall bear interest at a rate determined in advance of each policy year by the company and approved by the Office as being consistent with the rates generally used by the company for similar funds held under other group life insurance policies. When the Office determines that the special contingency reserve has attained an amount estimated by it to make satisfactory provision for adverse fluctuations in future charges under the policy, any further excess shall be deposited in the Treasury of the United States to the credit of the Employees’ Life Insurance Fund. When a policy is discontinued, any balance remaining in the special contingency reserve after all charges have been made shall be deposited in the Treasury to the credit of the Fund. The company may make the deposit in equal monthly installments over a period of not more than 2 years.
Notes, amendments, and revision history

(Pub. L. 89–554, Sept. 6, 1966, 80 Stat. 598; Pub. L. 95–454, title IX, § 906(a)(2), (3), Oct. 13, 1978, 92 Stat. 1224.)

Historical and Revision Notes
Derivation U.S. Code Revised Statutes and
Statutes at Large
5 U.S.C. 2097(d). Aug. 17, 1954, ch. 752, § 8(d), 68 Stat. 741.

The words “A policy purchased under this chapter” are substituted for “Each such policy” for clarity. The word “insurance”, preceding the word “company”, is omitted as unnecessary; and the word “company” is substituted for “company or companies” on authority of 1 U.S.C. 1.

The words “Employees’ Life Insurance Fund” are substituted for “fund”.

Standard changes are made to conform with the definitions applicable and the style of this title as outlined in the preface to the report.

Editorial Notes

Amendments

1978—Pub. L. 95–454 substituted “Office of Personnel Management” and “Office” for “Civil Service Commission” and “Commission”, respectively.

Statutory Notes and Related Subsidiaries

Effective Date of 1978 Amendment

Amendment by Pub. L. 95–454 effective 90 days after Oct. 13, 1978, see section 907 of Pub. L. 95–454, set out as a note under section 1101 of this title.