A-24129, SEPTEMBER 7, 1928, 8 COMP. GEN. 107

A-24129: Sep 7, 1928

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

1928: THERE IS FOR CONSIDERATION BY THIS OFFICE THE PROPER DISPOSITION TO BE MADE OF THE PROCEEDS OF THE POLICY OF WAR-RISK CONVERTED INSURANCE ISSUED TO JOSEPH ANTHONY SMITH. 000 WAS ISSUED EFFECTIVE JULY 1. IN WHICH THE BENEFICIARY WAS DESIGNATED AS EVA JONES. PAYMENT WAS TO BE MADE IN 36 MONTHLY INSTALLMENTS. INVESTIGATION IT DEVELOPED THAT EVA JONES WAS NOT THE SISTER OF. NO PAYMENT WAS MADE BY THE VETERANS' BUREAU EITHER TO THE DESIGNATED BENEFICIARY OR TO ANY ONE ELSE. THERE IS PRESENTED FOR CONSIDERATION AND ANSWER TWO QUESTIONS (1) WHETHER THE ACT OF MAY 29. THE SAME IS RETROACTIVELY EFFECTIVE IN CASES WHERE THE POLICY MATURED BY DEATH OF THE INSURED PRIOR TO THE DATE OF THE STATUTE.

A-24129, SEPTEMBER 7, 1928, 8 COMP. GEN. 107

VETERANS' BUREAU - INSURANCE UNDER THE PROVISIONS OF SECTION 300 OF THE WORLD WAR VETERANS' ACT OF JUNE 7, 1924, AS AMENDED BY THE ACT OF MAY 29, 1928, 45 STAT. 968, RETROACTIVELY EFFECTIVE FROM JUNE 7, 1924, ANY PERSON OR PERSONS MAY BE DESIGNATED AS BENEFICIARY OF CONVERTED WAR-RISK INSURANCE WITHOUT REGARD TO A PERMITTED CLASS. UNDER CONVERTED POLICIES MATURING BY DEATH OF THE INSURED ON AND AFTER JUNE 7, 1924, THERE MAY BE RECOGNIZED ANY PERSON AS A DESIGNATED BENEFICIARY WITHIN OR WITHOUT THE PERMITTED CLASS.

DECISION BY COMPTROLLER GENERAL MCCARL, SEPTEMBER 7, 1928:

THERE IS FOR CONSIDERATION BY THIS OFFICE THE PROPER DISPOSITION TO BE MADE OF THE PROCEEDS OF THE POLICY OF WAR-RISK CONVERTED INSURANCE ISSUED TO JOSEPH ANTHONY SMITH, C-692143, K-649562.

THE CONVERTED POLICY IN THE AMOUNT OF $5,000 WAS ISSUED EFFECTIVE JULY 1, 1927, IN WHICH THE BENEFICIARY WAS DESIGNATED AS EVA JONES, DESCRIBED AS SISTER OF INSURED, AND PAYMENT WAS TO BE MADE IN 36 MONTHLY INSTALLMENTS. THE INSURED DIED AS THE RESULT OF AN ACCIDENT AUGUST 4, 1927. INVESTIGATION IT DEVELOPED THAT EVA JONES WAS NOT THE SISTER OF, NOR RELATED TO, THE INSURED. NO PAYMENT WAS MADE BY THE VETERANS' BUREAU EITHER TO THE DESIGNATED BENEFICIARY OR TO ANY ONE ELSE, FOR THE REASON THAT NO PERSON WITHIN THE PERMITTED CLASS HAD BEEN DESIGNATED AS BENEFICIARY. THE BUREAU NOW PROPOSES TO MAKE PAYMENT OF ACCRUED INSTALLMENTS TO EVA JONES, THE DESIGNATED BENEFICIARY, UNDER THE PROVISIONS OF THE ACT OF MAY 29, 1928, 45 STAT. 964, 968, AMENDING THE PROVISIONS OF THE WORLD WAR VETERANS' ACT, ON THE BASIS THAT SAID AMENDATORY STATUTE REMOVED ALL RESTRICTIONS ON THE DESIGNATION OF BENEFICIARIES OF CONVERTED INSURANCE. ACCORDINGLY, THERE IS PRESENTED FOR CONSIDERATION AND ANSWER TWO QUESTIONS (1) WHETHER THE ACT OF MAY 29, 1928, DOES PERMIT DESIGNATION OF ANY PERSON AS BENEFICIARY OF CONVERTED INSURANCE WITHOUT REGARD TO A PERMITTED CLASS; AND (2) WHETHER, OR TO WHAT EXTENT, THE SAME IS RETROACTIVELY EFFECTIVE IN CASES WHERE THE POLICY MATURED BY DEATH OF THE INSURED PRIOR TO THE DATE OF THE STATUTE, MAY 29, 1928.

SECTION 300 OF THE WORLD WAR VETERANS' ACT OF JUNE 7, 1924, AND AS AMENDED BY THE ACT OF JULY 2, 1926, 44 STAT. 798, PROVIDED:

THE INSURANCE SHALL BE PAYABLE ONLY TO A SPOUSE, CHILD, GRANDCHILD, PARENT, BROTHER, SISTER, UNCLE, AUNT, NEPHEW, NIECE, BROTHER-IN-LAW, OR SISTER-IN-LAW, OR TO ANY OR ALL OF THEM, AND ALSO DURING TOTAL AND PERMANENT DISABILITY TO THE INSURED PERSON.

THIS PROVISION RELATED TO BOTH TERM AND CONVERTED INSURANCE AND WAS IN FORCE AT THE DATE OF DEATH OF THE INSURED IN THIS CASE.

THE ACT OF MAY 29, 1928, AMENDED THE FIRST PART OF THE ABOVE-QUOTED PROVISION TO READ: "YEARLY RENEWABLE TERM INSURANCE SHALL BE PAYABLE," ETC. THE INTENT OF THIS CHANGE IS EXPRESSED IN HOUSE AND SENATE REPORTS ON H.R. 13039, WHICH BECAME THE LAW, AS FOLLOWS (QUOTING FROM THE HOUSE REPORT):

SECTION 12 AMENDS SECTION 300 OF THE ACT BY REMOVING THE RESTRICTION ON THE DESIGNATION OF A BENEFICIARY FOR CONVERTED INSURANCE TO A PERMITTED CLASS. THE PERMITTED CLASS OF BENEFICIARIES WILL STILL REMAIN IN THE THE STATUTE IN SO FAR AS YEARLY RENEWABLE TERM INSURANCE IS CONCERNED. THE COMMITTEE IS OF THE OPINION THAT IN VIEW OF THE FACT THAT THE INSURED UNDER CONVERTED INSURANCE IS PAYING AN AMPLE PREMIUM FOR THE PROTECTION AFFORDED, HE SHOULD BE GIVEN THE SAME RIGHT WITH REGARD TO DESIGNATING A BENEFICIARY, OR CHANGING A BENEFICIARY, AS HE WOULD HAVE UNDER A COMMERCIAL INSURANCE POLICY. * * *

ACCORDINGLY, QUESTION 1 IS ANSWERED IN THE AFFIRMATIVE.

THE LAST SENTENCE OF SECTION 300 OF THE ACT AS AMENDED BY THE ACT OF MAY 29, 1928, PROVIDES AS FOLLOWS:

* * * THIS SECTION, AS AMENDED, SHALL BE DEEMED TO BE IN EFFECT AS OF JUNE 7, 1924.

THE CONVERTED POLICY CONTAINS THE FOLLOWING:

THIS INSURANCE IS GRANTED UNDER AND SUBJECT TO THE PROVISIONS OF THE WAR RISK INSURANCE ACT AND AMENDMENTS AND SUPPLEMENTS THERETO. * * *

THEREFORE, UNDER ANY CONVERTED POLICY CONTAINING SUCH A PROVISION, MATURING BY DEATH OF THE INSURED ON AND AFTER JUNE 7, 1924, THERE MAY BE RECOGNIZED ANY PERSON AS A DESIGNATED BENEFICIARY WITHIN OR WITHOUT THE PERMITTED CLASS. WHITE V. UNITED STATES, 270 U.S. 175; 2 COMP. GEN. 102, 104; 6 ID. 89, 91. QUESTION 2 IS ANSWERED ACCORDINGLY.

AS THE DEATH OF JOSEPH A. SMITH OCCURRED AUGUST 4, 1927, SUBSEQUENT TO JUNE 7, 1924, THE DESIGNATED BENEFICIARY MAY BE RECOGNIZED AND THE VOUCHER IN HER FAVOR OF THE AMOUNT OF ACCRUED INSTALLMENTS WILL BE CERTIFIED FOR PAYMENT IN THE ABSENCE OF OTHER OBJECTION.