A-23386, JUNE 26, 1928, 7 COMP. GEN. 814

A-23386: Jun 26, 1928

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VETERANS' BUREAU - INSURANCE PREMIUMS WHERE AN APPLICATION FOR INSURANCE IS PROPERLY EXECUTED AND FILED IN THE VETERANS' BUREAU BY A NAVAL OFFICER WITHIN 120 DAYS AFTER THE RECEIPT OF HIS COMMISSION AS AN ENSIGN BUT THE PREMIUM THEREON WAS NOT TENDERED UNTIL AFTER THE EXPIRATION OF THE 120-DAY PERIOD BUT BEFORE THE REJECTION OF HIS APPLICATION AND IT WAS ACCEPTED AND THE POLICY OF INSURANCE ISSUED. THE QUESTION CONSIDERED WAS WHETHER A POLICY APPLIED FOR WITHIN THE TIME FIXED BY THE STATUTES AND REGULATIONS LEGALLY MAY BE ISSUED WHERE THE FIRST PREMIUM IS NOT PAID UNTIL AFTER THE EXPIRATION OF THAT PERIOD. IN DISCUSSING THIS QUESTION YOU HELD IN SUBSTANCE THAT THE LIMITATION IN THE STATUTE REFERS TO THE TIME WHEN THE APPLICATION FOR INSURANCE OVER THE SIGNATURE OF THE INSURED IS FILED WITH THE PROPER OFFICIAL.

A-23386, JUNE 26, 1928, 7 COMP. GEN. 814

VETERANS' BUREAU - INSURANCE PREMIUMS WHERE AN APPLICATION FOR INSURANCE IS PROPERLY EXECUTED AND FILED IN THE VETERANS' BUREAU BY A NAVAL OFFICER WITHIN 120 DAYS AFTER THE RECEIPT OF HIS COMMISSION AS AN ENSIGN BUT THE PREMIUM THEREON WAS NOT TENDERED UNTIL AFTER THE EXPIRATION OF THE 120-DAY PERIOD BUT BEFORE THE REJECTION OF HIS APPLICATION AND IT WAS ACCEPTED AND THE POLICY OF INSURANCE ISSUED, THE VALIDITY OF THE POLICY MAY NOT THEREAFTER BE QUESTIONED BY REASON OF THE FAILURE TO TENDER THE PREMIUM WITHIN THE 120-DAY PERIOD REQUIRED BY THE REGULATIONS OF THE VETERANS' BUREAU.

COMPTROLLER GENERAL MCCARL TO THE DIRECTOR, UNITED STATES VETERANS' BUREAU, JUNE 26, 1928:

THERE HAS BEEN RECEIVED YOUR LETTER OF JUNE 15, 1928, AS FOLLOWS:

IN YOUR DECISION OF MARCH 18, 1927, IN THE CASE OF CURTIS SWEENEY STILL, THE QUESTION CONSIDERED WAS WHETHER A POLICY APPLIED FOR WITHIN THE TIME FIXED BY THE STATUTES AND REGULATIONS LEGALLY MAY BE ISSUED WHERE THE FIRST PREMIUM IS NOT PAID UNTIL AFTER THE EXPIRATION OF THAT PERIOD.

IN DISCUSSING THIS QUESTION YOU HELD IN SUBSTANCE THAT THE LIMITATION IN THE STATUTE REFERS TO THE TIME WHEN THE APPLICATION FOR INSURANCE OVER THE SIGNATURE OF THE INSURED IS FILED WITH THE PROPER OFFICIAL. YOU SUGGESTED THAT THERE WAS NO LIMITATION IN THE STATUTE AS TO WHEN THE FIRST PREMIUM MUST BE PAID WITH THE UNDERSTANDING THAT INSURANCE MIGHT NOT BE MADE EFFECTIVE UNTIL THE FIRST PREMIUM WAS PAID. YOU FURTHER HELD IN CONNECTION WITH BUREAU REGULATION NO. 122 AS FAR AS THE CURTIS SWEENEY STILL CASE WAS CONCERNED THAT AN ALLOTMENT OF PAY OR ALLOWANCE FOR DEDUCTION FROM PAY MADE AT THE TIME OF FILING APPLICATION FOR INSURANCE CONSTITUTED A TENDER OF PREMIUM WITHIN THE MEANING OF THE REGULATION EVEN THOUGH THE ACTUAL PAYMENT WAS NOT MADE UNTIL THE FIRST DEDUCTION WAS ACCOMPLISHED, AT WHICH LATTER TIME THE INSURANCE BECAME EFFECTIVE. WHILE YOU THEN CONSIDERED BUREAU REGULATION NO. 122, IT MAY BE STATED THAT THIS REGULATION HAS SUPERSEDED BY BUREAU REGULATION NO. 147, WHICH, HOWEVER, IT IS NOT NECESSARY TO QUOTE AT THIS TIME BECAUSE IT HAS MADE NO CHANGE IN THE REQUIREMENT OF BUREAU REGULATION NO. 122, THAT THE FIRST PREMIUM MUST BE TENDERED WITH THE APPLICATION.

IN CONNECTION WITH YOUR DECISION IN THE CURTIS SWEENEY STILL CASE, YOUR DECISION IS REQUESTED AS TO A CASE NOW PENDING BEFORE THE VETERANS' BUREAU, VIZ., THAT OF FREDERICK CHARLES MARGGRAFF, JR., K 848974, WHO WAS COMMISSIONED ON JUNE 2, 1927. ONE HUNDRED AND TWENTY DAYS FROM THIS DATE, THE PERIOD IN WHICH HE WAS ENTITLED TO APPLY FOR CONVERTED INSURANCE DIRECT, WOULD HAVE EXPIRED ON SEPTEMBER 30, 1927. WITHIN THIS TIME LIMIT, THAT IS TO SAY, ON AUGUST 22, 1927, HE APPLIED FOR $5,000 CONVERTED INSURANCE WITH A MONTHLY PREMIUM OF $10.35. ACCOMPANYING THE APPLICATION WAS A LETTER FROM HIM STATING THAT HE WOULD LIKE TO ARRANGE TO PAY PREMIUMS EACH MONTH AND ASKING FOR THE NECESSARY INSTRUCTIONS SO THAT THE AMOUNT MIGHT BE DEDUCTED FROM HIS PAY. NO ACTUAL ALLOTMENT, HOWEVER, WAS MADE AS WAS DONE IN THE CASE OF CURTIS SWEENEY STILL.

ON OCTOBER 17, 1927, AFTER THE ONE HUNDRED AND TWENTY DAY PERIOD, THE BUREAU ADVISED THE APPLICANT TO FORWARD AN INITIAL PREMIUM IN ORDER THAT A POLICY MIGHT BE ISSUED AND SUGGESTED FURTHER THAT HE TAKE UP ARRANGEMENTS FOR PAYMENT OF FUTURE PREMIUMS WITH HIS PAYMASTER. AS FAR AS THE FILE SHOWS NO REPLY WAS RECEIVED TO THIS LETTER FOR SOME TIME. A FOLLOW-UP LETTER WAS SENT ON FEBRUARY 13, 1928. JUST PRIOR TO THE MAILING OF THE FOLLOW-UP LETTER, THE APPLICANT ON FEBRUARY 1, 1928, FORWARDED $10.35 AND AGAIN REQUESTED ADVICE AS TO THE METHOD OF MAKING FUTURE PAYMENTS. THIS LETTER FROM THE APPLICANT WAS WRITTEN FROM THE NAVY YARD AT BOSTON, MASSACHUSETTS. ON FEBRUARY 28, 1928, A POLICY WAS ISSUED AND MAILED TO ENSIGN MARGGRAFF, U.S.S. CLEVELAND, IN CARE OF POSTMASTER, NEW YORK, NEW YORK, THE POLICY BEING DATED AS OF AUGUST 22, 1927. THE VALIDITY OF THIS POLICY IS NOW QUESTIONED UNDER YOUR DECISION IN THE CURTIS SWEENEY STILL CASE BECAUSE OF THE FACT THAT NO PREMIUM IN CASH WAS RECEIVED WITHIN ONE HUNDRED AND TWENTY DAYS FROM THE DATE THE ENSIGN WAS COMMISSIONED, AND BECAUSE THE APPLICANT, WITHIN THAT TIME, HAD NOT AUTHORIZED SPECIFICALLY THE DEDUCTION OF PREMIUMS.

THE VETERANS' BUREAU, THEREFORE, REQUESTS YOUR DECISION UPON THE FOREGOING FACTS, WHETHER THE ISSUANCE OF THIS POLICY WAS VALID, AND AS SUPPLEMENTAL TO YOUR CONSIDERATION OF THIS QUESTION, THE BUREAU ALSO REQUESTS YOUR DECISION WHETHER, BEARING IN MIND THAT THE ONLY SPECIFIC PROVISION OF THE LAW IS THAT AN APPLICATION MUST BE MADE WITHIN ONE HUNDRED AND TWENTY DAYS AFTER ENLISTMENT OR AFTER ENTRANCE INTO OR EMPLOYMENT IN THE ACTIVE SERVICE, THERE MAY BE MADE A DISTINCTION AS TO THE EFFECTIVE DATE OF THE POLICY AND THE DATE OF THE APPLICATION IN A CASE WHERE THE APPLICATION ITSELF WAS MADE WITHIN THE TIME LIMIT, BUT WHERE NO PREMIUM WAS TENDERED AND NO AUTHORITY FOR CHECK AGE ACCOMPLISHED WITHIN THE ONE HUNDRED AND TWENTY DAY PERIOD.

SECTION 300 OF THE WORLD WAR VETERANS' ACT OF JUNE 7, 1924, 43 STAT. 624, AS AMENDED BY THE ACT OF JULY 2, 1926, 44 STAT. 798, PROVIDES THAT---

* * * THE UNITED STATES UPON APPLICATION TO THE BUREAU AND WITHOUT MEDICAL EXAMINATION, SHALL GRANT UNITED STATES GOVERNMENT LIFE INSURANCE * * * UPON THE PAYMENT OF THE PREMIUMS AS HEREINAFTER PROVIDED. SUCH INSURANCE MUST BE APPLIED FOR WITHIN ONE HUNDRED AND TWENTY DAYS AFTER ENLISTMENT OR AFTER ENTRANCE INTO OR EMPLOYMENT IN THE ACTIVE SERVICE AND BEFORE DISCHARGE OR RESIGNATION. * * *

VETERANS' BUREAU REGULATION NO. 147, FORMERLY REGULATION NO. 122, REQUIRES THAT THE FIRST MONTHLY PREMIUM MUST BE TENDERED WITH THE APPLICATION OR BEFORE THE EXPIRATION OF THE 120-DAY PERIOD. BY DECISION OF MARCH 18, 1927, A-17595, IT WAS HELD THAT AUTHORITY ACCOMPANYING THE APPLICATION TO MAKE DEDUCTIONS FROM THE APPLICANT'S SERVICE PAY CONSTITUTED A SUFFICIENT TENDER TO BRING THE APPLICATION WITHIN THE VETERANS' BUREAU REGULATION NO. 122. THE REGULATION IS, HOWEVER, SILENT AS TO ANY PENALTY FOR FAILURE TO TENDER THE FIRST MONTH'S PREMIUM WITHIN THE 120-DAY PERIOD AND NO PENALTY IS PRESCRIBED IN THE STATUTE FOR SUCH FAILURE OTHER THAN THAT THE INSURANCE PRESUMABLY MAY NOT BE GRANTED EXCEPT "UPON PAYMENT OF THE PREMIUMS.' THE APPLICATION IN THE PRESENT CASE WAS FILED WITHIN THE 120-DAY PERIOD SPECIFIED IN THE STATUTE, AND WHILE THE PREMIUM WAS NOT TENDERED WITHIN THAT TIME IT WAS TENDERED AND ACCEPTED BEFORE THE APPLICATION HAD BEEN REJECTED BY YOUR BUREAU, AND HAVING BEEN ACCEPTED AND THE POLICY ISSUED, A VALID CONTRACT OF INSURANCE RESULTED WHICH IS NOT NOW OPEN TO OBJECTION SOLELY BECAUSE THE PREMIUM WAS NOT TENDERED WITH THE APPLICATION OR WITHIN THE 120-DAY PERIOD.

IT IS NOTED THAT YOU STATE THAT THE POLICY WAS ISSUED FEBRUARY 28, 1928, BUT WAS DATED AUGUST 22, 1927, THE DATE THE APPLICATION WAS ORIGINALLY FILED, RATHER THAN THE DATE THE PREMIUM WAS FIRST PAID, FEBRUARY 1, 1928. WHILE IT WOULD NOT APPEAR NECESSARY TO TAKE ANY ACTION ON THIS POINT AT THE PRESENT TIME, YOUR ATTENTION IS INVITED TO THE FACT THAT THE INSURANCE IS, UNDER THE STATUTE, TO BE GRANTED "UPON PAYMENT OF THE PREMIUMS" AND THERE WOULD BE NO AUTHORITY, THEREFORE, FOR DATING A POLICY, OR PLACING IT IN FORCE, PRIOR TO THE ACTUAL RECEIPT OF THE FIRST PREMIUM. 6 COMP. GEN. 316.