10 U.S.C. § 12531 — Purchase of insurance

(a) Purchase Authorized. Instead of, or along with, funding benefits through the Fund, the Secretary may buy one or more group insurance policies from insurance companies to provide this chapter's benefits, and may skip normal full-and-open-competition requirements to do so. (b) Eligible Insurers. To sell insurance to the Secretary this way, a company must: (1) be licensed to sell insurance in all 50 States and D.C.; and (2) as of the most recent year-end data available, have at least 1 percent of the total insurance in effect among all such companies in the United States. (c) Administrative Provisions. (1) An insurer that issues one of these policies must set up an administrative office at a place and under a name the Secretary picks. (2) The Secretary may use any such insurer's facilities and services, may name one company to represent the others, and may pay that company a reasonable fee for doing so. (d) Reinsurance. The Secretary must arrange for each insurer issuing one of these policies to reinsure — share the risk of — parts of the total coverage with other qualifying insurance companies that choose to take part, under conditions the Secretary approves. (e) Termination. The Secretary may cancel any policy purchased under this section at any time.