A-12487, JANUARY 20, 1926, 5 COMP. GEN. 503

A-12487: Jan 20, 1926

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IS EFFECTED WHEN THE VETERANS' BUREAU HAS DETERMINED THAT ALL THE CONDITIONS PRECEDENT FIXED BY THE STATUTE HAVE BEEN MET. A LETTER MAILED LESS THAN SIX MONTHS SUBSEQUENT TO SAID DATE TO THE APPLICANT ADVISING HIM THAT THE APPLICATION FOR REINSTATEMENT IS NOT ACCEPTABLE BECAUSE HE IS SUFFERING FROM A NONSERVICE CONNECTED DISEASE. IS A SUFFICIENT CONTEST WITHIN THE MEANING OF SECTION 307 OF SAID ACT TO PREVENT THE POLICY FROM BECOMING INCONTESTABLE. AN APPLICANT FOR REINSTATEMENT OF A LAPSED WAR-RISK INSURANCE POLICY WHO IS SUFFERING FROM A DISEASE NOT SERVICE CONNECTED OF SUFFICIENT DEGREE TO NEGATIVE ACCEPTING HIM AS AN INSURABLE RISK IS NOT ENTITLED TO REINSTATEMENT OF THE POLICY UNDER THE PROVISIONS OF SECTION 304 OF THE WORLD WAR VETERANS' ACT OF JUNE 7.

A-12487, JANUARY 20, 1926, 5 COMP. GEN. 503

VETERANS' BUREAU, INSURANCE - REINSTATEMENT REINSTATEMENT OF A WAR-RISK INSURANCE POLICY UNDER THE PROVISIONS OF SECTION 304 OF THE WORLD WAR VETERANS' ACT OF JUNE 7, 1924, AS AMENDED BY SECTION 15 OF THE ACT OF MARCH 4, 1925, 43 STAT. 1310, IS EFFECTED WHEN THE VETERANS' BUREAU HAS DETERMINED THAT ALL THE CONDITIONS PRECEDENT FIXED BY THE STATUTE HAVE BEEN MET, AND A LETTER MAILED LESS THAN SIX MONTHS SUBSEQUENT TO SAID DATE TO THE APPLICANT ADVISING HIM THAT THE APPLICATION FOR REINSTATEMENT IS NOT ACCEPTABLE BECAUSE HE IS SUFFERING FROM A NONSERVICE CONNECTED DISEASE, IS A SUFFICIENT CONTEST WITHIN THE MEANING OF SECTION 307 OF SAID ACT TO PREVENT THE POLICY FROM BECOMING INCONTESTABLE. AN APPLICANT FOR REINSTATEMENT OF A LAPSED WAR-RISK INSURANCE POLICY WHO IS SUFFERING FROM A DISEASE NOT SERVICE CONNECTED OF SUFFICIENT DEGREE TO NEGATIVE ACCEPTING HIM AS AN INSURABLE RISK IS NOT ENTITLED TO REINSTATEMENT OF THE POLICY UNDER THE PROVISIONS OF SECTION 304 OF THE WORLD WAR VETERANS' ACT OF JUNE 7, 1924, AS AMENDED BY SECTION 15 OF THE ACT OF MARCH 4, 1925, 43 STAT. 1310, AND PAYMENTS UNDER THE LAPSED POLICY ARE NOT AUTHORIZED.

COMPTROLLER GENERAL MCCARL TO THE DIRECTOR, UNITED STATES VETERANS' BUREAU, JANUARY 20, 1926:

I HAVE YOUR LETTER OF DECEMBER 24, 1925, AS FOLLOWS:

THERE IS SUBMITTED HEREWITH FOR YOUR CONSIDERATION THE CASE OF MR. FRANK M. DOHERTY, C-1,091,542, UPON THE FOLLOWING STATEMENT OF FACTS: MR. DOHERTY WAS GRANTED $10,000 YEARLY RENEWABLE TERM INSURANCE EFFECTIVE FEBRUARY 1, 1918, UNDER CERTIFICATE NO. T-1,361,233, WHICH INSURANCE WAS PERMITTED TO LAPSE BECAUSE OF FAILURE TO PAY PREMIUM DUE JUNE 1, 1919. MR. DOHERTY WAS DISCHARGED APRIL 3, 1919.

ON MAY 4, 1925, APPLICATION FOR REINSTATEMENT WAS MADE UNDER THE PROVISIONS OF SECTION 304 OF THE WORLD WAR VETERANS' ACT. THIS APPLICATION WAS ACCOMPANIED BY A REMITTANCE OF $600.00, WHICH AMOUNT WAS NOT SUFFICIENT TO COVER PREMIUMS WITH INTEREST TO INCLUDE THE MONTH OF MAY, 1925. A SECOND REMITTANCE OF $64.00 WAS MADE ON JUNE 4, 1925, WHICH WAS SUFFICIENT TO COVER PREMIUMS WITH INTEREST TO INCLUDE THE MONTH OF JUNE, 1925. THE APPLICANT'S PHYSICAL CONDITION WAS THEN CONSIDERED, AND THE APPLICATION WAS ON JULY 14, 1925, FOUND TO BE ACCEPTABLE. THE INSURED WAS ADVISED OF THIS ACTION, AND INFORMED THAT HE SHOULD FORWARD THE PREMIUM FOR THE CURRENT MONTH OF JULY IN ORDER TO PREVENT FURTHER LAPSE.

PREMIUMS WERE FORWARDED REGULARLY BY THE INSURED. UPON FURTHER AND MORE CAREFUL REVIEW OF THE MEDICAL EVIDENCE SUBMITTED IN CONNECTION WITH THE APPLICATION FOR REINSTATEMENT IT WAS DISCOVERED THAT THE ENTIRE DISABILITY FROM WHICH THE CLAIMANT WAS SUFFERING WAS NOT SERVICE CONNECTED BUT THAT HE WAS ALSO SUFFERING FROM AN INTERCURRENT DISABILITY, NAMELY, CANCER.

ON OCTOBER 28, 1925, THE APPLICANT WAS ADVISED BY A LETTER, MAILED BY THE BUREAU TO HIS LAST-KNOWN ADDRESS, THAT UNDER SECTION 304 OF THE WORLD WAR VETERANS' ACT, AS AMENDED, HIS APPLICATION WAS NOT PROPERLY ACCEPTABLE FOR THE REASON THAT THE INTERCURRENT DISABILITY WAS NOT SERVICE CONNECTED.

SECTION 307 OF THE WORLD WAR VETERANS' ACT PROVIDES, AS FOLLOWS:

"ALL SUCH POLICIES OF INSURANCE HERETOFORE OR HEREAFTER ISSUED SHALL BE INCONTESTABLE AFTER THE INSURANCE HAS BEEN IN FORCE SIX MONTHS FROM THE DATE OF ISSUANCE OR REINSTATEMENT, EXCEPT FOR FRAUD OR NONPAYMENT OF PREMIUMS AND SUBJECT TO THE PROVISIONS OF SECTION 23: PROVIDED, THAT A LETTER MAILED BY THE BUREAU TO THE INSURED AT HIS LAST-KNOWN ADDRESS INFORMING HIM OF THE INVALIDITY OF HIS INSURANCE SHALL BE DEEMED A CONTEST WITHIN THE MEANING OF THIS SECTION: PROVIDED FURTHER, THAT THIS SECTION SHALL BE DEEMED TO BE IN EFFECT AS OF APRIL 6, 1917.'

IN VIEW OF THIS IT WOULD APPEAR THAT THE LETTER REFERRED TO WAS A CONTEST UNDER THE PROVISIONS OF THE ACT, AND HAVING BEEN MAILED PRIOR TO THE EXPIRATION OF SIX MONTHS AFTER THE ATTEMPTED REINSTATEMENT THAT THE INSURANCE WAS PROPERLY CONTESTABLE AND COULD NOT BE FURTHER CONTINUED. HOWEVER, THIS POSITION HAS BEEN QUESTIONED AND THE OPINION OF YOUR OFFICE IS SOUGHT AS TO WHETHER THE SIX MONTHS' PERIOD REFERRED TO IN SECTION 307 QUOTED SHOULD BE COMPUTED FROM THE DATE THAT THE APPLICATION FOR REINSTATEMENT IS ACTED UPON OR WHETHER, IN VIEW OF THE FACT THAT THE APPLICANT IS COMPELLED TO PAY ALL THE BACK PREMIUMS WITH INTEREST WHERE HE IS SUFFERING FROM A SERVICE CONNECTED DISABILITY, THAT THE SIX MONTHS' PERIOD SHOULD NOT BE COMPUTED FROM THE DATE THAT HE IS COMPELLED TO PAY THE PREMIUMS ON THE POLICY TO EFFECT A REINSTATEMENT. IN OTHER WORDS, IN THIS CASE, SHOULD THE SIX MONTHS' PERIOD PROVIDED FOR IN SECTION 207 RUN FROM JULY 14, 1925, THE DATE THAT THE APPLICATION FOR REINSTATEMENT WAS FIRST CONSIDERED, OR SHOULD THE PERIOD BE COMPUTED FROM JUNE, 1919, THE MONTH IN WHICH HE PERMITTED HIS INSURANCE TO LAPSE BECAUSE OF HIS FAILURE TO PAY PREMIUMS THEN DUE?

THE QUESTION ALSO ARISES AS TO WHETHER THE BUREAU IS AUTHORIZED TO PERMIT REINSTATEMENTS OF INSURANCE UNDER SECTION 304 OF THE WORLD WAR VETERANS' ACT, AS AMENDED, WHERE THERE IS AN EXISTING INTERCURRENT NONSERVICE CONNECTED DISABILITY, IN THIS CASE THE CANCER PREVIOUSLY REFERRED TO.

SECTION 304 OF THE WORLD WAR VETERANS' ACT OF JUNE 7, 1924, AS AMENDED BY SECTION 14 OF THE ACT OF MARCH 4, 1925, 43 STAT. 1310,PROVIDES FOR REINSTATEMENTS OF INSURANCE POLICIES ONLY WHERE THE INSURED, BECAUSE OF HEALTH CONDITIONS, IS NOT ENTITLED TO REINSTATEMENT UNDER THE REGULATIONS OF THE VETERANS' BUREAU. THE STATUTE FIXES AS THE PRIME CONDITION TO THE REINSTATEMENT THAT THE APPLICANT'S DISABILITY IS THE RESULT OF INJURY OR DISEASE, OR OF AN AGGRAVATION THEREOF, SUFFERED OR CONTRACTED IN THE ACTIVE MILITARY OR NAVAL SERVICE DURING THE WORLD WAR AND THAT THE APPLICANT SUBMITS DURING HIS LIFETIME SATISFACTORY PROOF THAT HE IS NOT TOTALLY AND PERMANENTLY DISABLED. AS A CONDITION TO ACCEPTANCE OF AN APPLICATION FOR REINSTATEMENT UNDER THIS SECTION THE APPLICANT IS REQUIRED TO PAY ALL THE BACK MONTHLY PREMIUMS WHICH WOULD HAVE BEEN PAYABLE IF SUCH INSURANCE HAD NOT LAPSED TOGETHER WITH INTEREST AT THE RATE OF 5 PERCENT PER ANNUM COMPOUNDED ANNUALLY ON EACH PREMIUM FROM THE DATE SAID PREMIUM IS DUE BY THE TERMS OF THE POLICY. BECAUSE OF THESE CONDITIONS PRECEDENT, A REINSTATEMENT UNDER THIS SECTION OF THE STATUTE MAY NOT BE CONSIDERED AS BECOMING EFFECTIVE UNTIL THE VETERANS' BUREAU HAS DETERMINED THAT SUCH CONDITIONS PRECEDENT HAVE BEEN MET--- THAT IS TO SAY, UNTIL IT HAS BEEN ESTABLISHED TO THE SATISFACTION OF THE DIRECTOR THAT THE APPLICANT IS NOT THEN TOTALLY AND PERMANENTLY DISABLED, THAT THE DISABILITY FROM WHICH HE IS THEN SUFFERING IS SERVICE CONNECTED; AND THAT THE AMOUNT OF THE BACK PREMIUMS WITH INTEREST HAS BEEN TENDERED.

IN THIS CASE THE APPLICANT, FRANK M. DOHERTY, COMPLETED PAYMENTS OF THE BACK PREMIUMS WITH INTEREST AND, APPARENTLY, HAD SUBMITTED EVIDENCE AS TO HEALTH CONDITIONS ON JULY 14, 1925, WHEN THE VETERANS' BUREAU FOUND THE APPLICATION FOR REINSTATEMENT TO BE ACCEPTABLE. JULY 14, 1925, MUST BE CONSIDERED AS THE "DATE OF * * * REINSTATEMENT" WITHIN THE MEANING OF SECTION 307 OF THE WORLD WAR VETERANS' ACT, JUNE 7, 1924, 43 STAT. 627, QUOTED IN YOUR SUBMISSION, PROVIDING THAT POLICIES "SHALL BE INCONTESTABLE AFTER THE INSURANCE HAS BEEN IN FORCE SIX MONTHS FROM THE DATE OF ISSUANCE OR REINSTATEMENT.' ACCORDINGLY, THE LETTER OF OCTOBER 28, 1925, MAILED BY THE VETERANS' BUREAU TO THE APPLICANT ADVISING HIM THAT THE APPLICATION WAS NOT PROPERLY ACCEPTABLE FOR THE REASONS THEREIN STATED WAS A CONTEST WITHIN SIX MONTHS FROM THE DATE OF REINSTATEMENT WITHIN THE MEANING OF THE PROVISIONS OF THE SAID SECTION 307. THE FIRST QUESTION IS ANSWERED ACCORDINGLY.

WITH REFERENCE TO YOUR SECOND QUESTION, IT IS CLEAR THAT SECTION 304 OF THE WORLD WAR VETERANS' ACT CONTEMPLATES THAT THE HEALTH CONDITION OF THE APPLICANT FOR REINSTATEMENT BE SUCH AS TO JUSTIFY THE GOVERNMENT ACCEPTING THE APPLICANT AS AN INSURABLE RISK WITH THE ONE EXCEPTION OF SERVICE CONNECTED DISEASE OR DISABILITY LESS THAN PERMANENT AND TOTAL. IF THE APPLICANT IS SUFFERING FROM ANOTHER DISEASE OR DISABILITY NOT SERVICE CONNECTED OF SUFFICIENT DEGREE TO NEGATIVE ACCEPTING HIM AS AN INSURABLE RISK, THE REINSTATEMENT IS NOT AUTHORIZED.