A-15934, NOVEMBER 5, 1926, 6 COMP. GEN. 316

A-15934: Nov 5, 1926

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THE INSURANCE IN THE LATTER CASE IS NOT TO BE EFFECTIVE UNTIL THE FIRST PREMIUM HAS ACTUALLY BEEN DEDUCTED FROM THE PAY. ARE INCONSISTENT WITH THE PROVISIONS OF THE WORLD WAR VETERANS' ACT: SECTION 5101. - THE EFFECTIVE DATE OF THE INSURANCE APPLIED FOR AS PROVIDED BY SECTION 5100 ABOVE AND THE DATE OF THE POLICY WILL BE ESTABLISHED AS OF THE DAY ON WHICH VALID APPLICATION AND TENDER OF PREMIUM ARE MADE AND FORWARDED TO THE U.S. THAT SUCH ALLOTMENT OF PAY OR AUTHORIZATION FOR DEDUCTION FROM PAY IS EXECUTED EFFECTIVE WITH THE MONTH PRECEDING THE MONTH FOR WHICH THE SAID PREMIUM IS DUE AND PAYABLE. YOU STATE IN PART AS FOLLOWS: THE QUESTION ARISES IN VIEW OF THE LANGUAGE OF THE STATUTE AS TO WHETHER THE BUREAU IS JUSTIFIED IN DEMANDING THAT THE FIRST PREMIUM BE PAID IN CASH.

A-15934, NOVEMBER 5, 1926, 6 COMP. GEN. 316

VETERANS' BUREAU - INSURANCE - PAYMENT OF PREMIUMS REGULATIONS OF THE VETERANS-BUREAU MAY PROPERLY PROVIDE THAT THE FIRST PREMIUM ON INSURANCE GRANTED TO PERSONS IN THE MILITARY OR NAVAL SERVICE SHALL BE PAID IN CASH AND THE SUBSEQUENT PAYMENTS DEDUCTED FROM PAY, OR SUCH REGULATIONS MAY PROVIDE THAT THE FIRST PREMIUM MAY BE DEDUCTED FROM THE PAY OF THE INSURED, BUT THE INSURANCE IN THE LATTER CASE IS NOT TO BE EFFECTIVE UNTIL THE FIRST PREMIUM HAS ACTUALLY BEEN DEDUCTED FROM THE PAY.

COMPTROLLER GENERAL MCCARL TO THE DIRECTOR, UNITED STATES VETERANS' BUREAU, NOVEMBER 5, 1926:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTER OF OCTOBER 2, 1926, REQUESTING DECISION WHETHER THE FOLLOWING SECTIONS OF REGULATION NO. 122 PROMULGATED EFFECTIVE JANUARY 1, 1926, ARE INCONSISTENT WITH THE PROVISIONS OF THE WORLD WAR VETERANS' ACT:

SECTION 5101. EFFECTIVE DATE.--- THE EFFECTIVE DATE OF THE INSURANCE APPLIED FOR AS PROVIDED BY SECTION 5100 ABOVE AND THE DATE OF THE POLICY WILL BE ESTABLISHED AS OF THE DAY ON WHICH VALID APPLICATION AND TENDER OF PREMIUM ARE MADE AND FORWARDED TO THE U.S. VETERANS' BUREAU. REFERENCE: SECTION 5103.) (V.B. REGULATION NO. 122, EFFECTIVE JANUARY 1, 1926.)

SECTION 5103. PAYMENT OF PREMIUMS.--- A. AN AMOUNT SUFFICIENT TO COVER AT LEAST ONE MONTHLY PREMIUM ON THE AMOUNT AND PLAN OF INSURANCE SET FORTH IN THE APPLICATION MUST BE TENDERED WITH THE APPLICATION AND BEFORE THE EXPIRATION OF THE PERIOD OF ONE HUNDRED AND TWENTY DAYS FROM DATE OF ENLISTMENT OR ENTRANCE INTO ACTIVE SERVICE.

B. AFTER THE FIRST PREMIUM HAS BEEN PAID, SUBSEQUENT PREMIUMS MAY BE PAID (A) BY DIRECT REMITTANCE TO THE VETERANS' BUREAU, (B) BY ALLOTMENT OF PAY AS IN THE NAVY AND MARINE CORPS, OR (C) BY DEDUCTION FROM PAY AS IN THE ARMY; PROVIDED, THAT SUCH ALLOTMENT OF PAY OR AUTHORIZATION FOR DEDUCTION FROM PAY IS EXECUTED EFFECTIVE WITH THE MONTH PRECEDING THE MONTH FOR WHICH THE SAID PREMIUM IS DUE AND PAYABLE. (V.B. REGULATION NO. 122, EFFECTIVE JANUARY 1, 1926.)

YOU STATE IN PART AS FOLLOWS:

THE QUESTION ARISES IN VIEW OF THE LANGUAGE OF THE STATUTE AS TO WHETHER THE BUREAU IS JUSTIFIED IN DEMANDING THAT THE FIRST PREMIUM BE PAID IN CASH. THE POINT HAS BEEN MADE THAT IN MANY INSTANCES MEN ENTERING THE MILITARY SERVICE HAVE NOT SUFFICIENT CASH ON HAND TO PAY THE INITIAL PREMIUM, BUT THEY DESIRE THE PROTECTION OFFERED IN THIS FORM BY THE GOVERNMENT IMMEDIATELY UPON THEIR ENTRANCE INTO THE ACTIVE SERVICE. THE DIFFICULTY WHICH WOULD ARISE FROM PERMITTING THE APPLICANT TO PAY THE FIRST PREMIUM BY DEDUCTION IS THAT IN MANY CASES AT THE TIME OF APPLICATION THE INSURED HAS NOT SUFFICIENT PAY DUE TO LIQUIDATE THE AUTHORIZATION FOR DEDUCTION SHOULD HE DIE WITHIN A SHORT TIME AFTER THE APPLICATION IS MADE * * *.

IF THE BUREAU COULD ACCEPT AN APPLICATION WHERE AN AUTHORIZATION TO DEDUCT OR AN ALLOTMENT IS MADE AT THE TIME OF APPLICATION, WITH ASSURANCE THAT SHOULD THE APPLICANT DIE BEFORE SUCH TIME AS HIS PAY IS SUFFICIENT TO LIQUIDATE THE AUTHORIZATION THE CLAIM COULD BE PAID UNDER THE ACT AND THE UNPAID PREMIUM DEDUCTED FROM THE INSURANCE, THERE WOULD BE NO OBJECTION TO CHANGING THE REGULATION. IT WAS FELT, HOWEVER, THAT BEFORE ANY CHANGE IN THE REGULATION IS MADE YOUR DECISION IN THE MATTER SHOULD BE SECURED.

IT IS PROVIDED IN SECTION 300 OF THE WORLD WAR VETERANS' ACT, DATED JUNE 7, 1924, 43 STAT. 624, AND AS AMENDED BY THE ACT OF JULY 2, 1926, 44 STAT. 798, THAT THE "UNITED STATES, UPON APPLICATION TO THE BUREAU AND WITHOUT MEDICAL EXAMINATION, SHALL GRANT * * * INSURANCE * * * UPON THE PAYMENT OF THE PREMIUMS AS HEREINAFTER PROVIDED.' IT IS PROVIDED IN SECTION 301 OF THE SAME STATUTE AND AS AMENDED BY THE ACT OF JUNE 2, 1926, 44 STAT. 686, THAT---

REGULATIONS * * * SHALL PRESCRIBE THE TIME AND METHOD OF PAYMENT OF THE PREMIUMS THEREON, BUT PAYMENTS OF PREMIUMS IN ADVANCE SHALL NOT BE REQUIRED FOR PERIODS OF MORE THAN ONE MONTH EACH, AND MAY BE DEDUCTED FROM THE PAY OR DEPOSIT OF THE INSURED OR BE OTHERWISE MADE AT HIS ELECTION.

THE QUESTION IS WHETHER THE FIRST PREMIUM MUST BE PAID IN CASH TO GIVE EFFECT TO THE INSURANCE OR WHETHER THE EXECUTION OF AN ALLOTMENT OR AUTHORIZATION FOR DEDUCTION OF PAY, INCLUDING THE FIRST PAYMENT, IS EQUIVALENT TO "PAYMENT OF THE PREMIUMS" WITHIN THE MEANING OF SECTION 300 OF THE STATUTE, SO AS TO GIVE FULL FORCE AND EFFECT TO THE INSURANCE FROM THE DATE THE APPLICATION FOR INSURANCE AND THE ALLOTMENT OF PAY IS MADE AND FORWARDED TO THE VETERANS' BUREAU.

SECTION 300 OF THE STATUTE EXPRESSLY PROVIDES THAT INSURANCE SHALL BE GRANTED UPON THE "PAYMENT OF THE PREMIUMS AS HEREINAFTER PROVIDED.' WHILE IT IS "HEREINAFTER PROVIDED" IN SECTION 301 THAT THE PREMIUMS MAY BE DEDUCTED FROM THE PAY OR DEPOSIT OF THE INSURED, THERE CAN BE NO ACTUAL ,PAYMENT" BY THAT METHOD UNTIL THE FIRST DEDUCTION IS ACTUALLY MADE. REGULATIONS COULD PROPERLY PROVIDE FOR COLLECTION OF THE FIRST PREMIUM BY THE DEDUCTION METHOD IN THE SAME MANNER AS SUBSEQUENT PREMIUMS ARE AUTHORIZED TO BE COLLECTED, BUT THE INSURANCE COULD NOT BE MADE EFFECTIVE UNTIL THE FIRST PREMIUM HAD ACTUALLY BEEN DEDUCTED FROM THE PAY. THE MERE EXECUTION OF AN ALLOTMENT OF PAY OR AUTHORIZATION FOR DEDUCTION OF PREMIUMS FROM PAY IS NOT EQUIVALENT TO "PAYMENT OF THE PREMIUMS" WITHIN THE MEANING OF THE STATUTE.

THERE WOULD APPEAR TO BE NO INCONSISTENCY BETWEEN THE QUOTED PROVISIONS OF THE REGULATIONS AND THE PROVISIONS OF THE WORLD WAR VETERANS' ACT.