A-24148, SEPTEMBER 4, 1928, 8 COMP. GEN. 101

A-24148: Sep 4, 1928

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WHERE THE EFFECTIVE DATE OF SUCH A RATING AS DETERMINED IS PRIOR TO APPLICATION FOR TERM INSURANCE LAWFULLY FILED DURING MILITARY OR NAVAL SERVICE. PERMANENT TOTAL BENEFITS MAY BE AWARDED FROM AND AFTER THE DATE OF APPLICATION FOR INSURANCE OR FROM SUCH SUBSEQUENT DATE AS THE DISABILITY IS DISCLOSED BY THE MILITARY OR NAVAL RECORD TO HAVE ARISEN. (2) FROM WHAT DATE MAY THE BUREAU LEGALLY AWARD PERMANENT AND TOTAL DISABILITY BENEFITS ARISING UNDER A CONTRACT OF TERM INSURANCE WHERE A PERMANENT AND TOTAL DISABILITY IS DETERMINED BY THE BUREAU TO HAVE EXISTED PRIOR TO THE DATE OF APPLICATION FOR INSURANCE DURING MILITARY OR NAVAL SERVICE OF THE INSURED. THE VETERAN WAS DISCHARGED ON MAY 17. THE BUREAU HAS FOUND THAT THE INSURED WAS PERMANENTLY AND TOTALLY DISABLED FROM DECEMBER 18.

A-24148, SEPTEMBER 4, 1928, 8 COMP. GEN. 101

VETERANS' BUREAU - INSURANCE A RETROACTIVE RATING OF PERMANENT TOTAL DISABILITY BY THE VETERANS' BUREAU MAY BE RECOGNIZED AS MATURING TERM INSURANCE PRIOR TO DISCHARGE OR RESIGNATION FROM THE MILITARY OR NAVAL SERVICE OF THE INSURED ONLY WHERE THE MILITARY OR NAVAL RECORD DISCLOSES A DISABILITY DURING THE PERIOD COVERED BY SUCH RETROACTIVE RATING. WHERE THE EFFECTIVE DATE OF SUCH A RATING AS DETERMINED IS PRIOR TO APPLICATION FOR TERM INSURANCE LAWFULLY FILED DURING MILITARY OR NAVAL SERVICE, PERMANENT TOTAL BENEFITS MAY BE AWARDED FROM AND AFTER THE DATE OF APPLICATION FOR INSURANCE OR FROM SUCH SUBSEQUENT DATE AS THE DISABILITY IS DISCLOSED BY THE MILITARY OR NAVAL RECORD TO HAVE ARISEN.

COMPTROLLER GENERAL MCCARL TO THE DIRECTOR, UNITED STATES VETERANS' BUREAU, SEPTEMBER 4, 1928:

THERE HAS BEEN RECEIVED YOUR LETTER OF AUGUST 15, 1928, REQUESTING DECISION OF THE QUESTIONS (1) WHETHER A RETROACTIVE RATING OF PERMANENT TOTAL DISABILITY MAY MATURE TERM INSURANCE PRIOR TO DISCHARGE OR RESIGNATION FROM THE MILITARY OR NAVAL SERVICE OF THE INSURED, AND, IF SO, (2) FROM WHAT DATE MAY THE BUREAU LEGALLY AWARD PERMANENT AND TOTAL DISABILITY BENEFITS ARISING UNDER A CONTRACT OF TERM INSURANCE WHERE A PERMANENT AND TOTAL DISABILITY IS DETERMINED BY THE BUREAU TO HAVE EXISTED PRIOR TO THE DATE OF APPLICATION FOR INSURANCE DURING MILITARY OR NAVAL SERVICE OF THE INSURED.

AS ILLUSTRATIVE OF THE QUESTION SUBMITTED YOU PRESENT THE FACTS IN THE CASE OF ALEXANDER M. SINCLAIR, XC-213333, AS FOLLOWS:

IN THE CASE OF ALEXANDER M. SINCLAIR, XC-213333, THE VETERAN ENTERED THE SERVICE IN DECEMBER, 1917, AND APPLIED ON DECEMBER 12, 1917, FOR WAR-RISK TERM INSURANCE IN THE AMOUNT OF $2,000. ON FEBRUARY 7, 1918, BY ANOTHER APPLICATION MADE WITHIN THE TIME LIMIT THE VETERAN INCREASED THE AMOUNT OF HIS INSURANCE TO A TOTAL SUM OF $5,000. THE VETERAN WAS DISCHARGED ON MAY 17, 1919. THE BUREAU HAS FOUND THAT THE INSURED WAS PERMANENTLY AND TOTALLY DISABLED FROM DECEMBER 18, 1917, UNDER A VALID REGULATION. THE ONSET OF THE PERMANENT AND TOTAL DISABILITY WAS SUBSEQUENT TO THE INITIAL APPLICATION FOR $2,000 MADE ON DECEMBER 12, 1917, BUT WAS PRIOR TO THE SUPPLEMENTAL APPLICATION OF FEBRUARY 7, 1918, WHICH INCREASED THE TOTAL AMOUNT OF THE TERM INSURANCE CARRIED BY THE VETERAN TO $5,000.

THE DECISION OF FEBRUARY 27, 1928, 7 COMP. GEN. 526, IN THE CASE OF HALLEM SINGER, C-6836, TO WHICH YOU REFER, HELD, PRIMARILY, THAT A RETROACTIVE RATING OF PERMANENT TOTAL DISABILITY COULD NOT DEFEAT AN APPLICATION FOR TERM INSURANCE LAWFULLY MADE AND ACCEPTED DURING MILITARY OR NAVAL SERVICE UNDER THE CONDITIONS SET FORTH IN SECTION 400 OF THE WAR RISK INSURANCE ACT; AND, SECONDARILY, THAT INSURANCE BENEFITS SHOULD DATE FROM DISCHARGE. YOU STATE THAT THE VETERANS' BUREAU IS IN AGREEMENT WITH THE PRIMARY HOLDING, BUT THAT THE PRESENT SUBMISSION HAS BEEN MADE BECAUSE OF THE SECONDARY HOLDING.

NO CONSIDERATION WAS GIVEN IN SAID DECISION TO THE GENERAL QUESTIONS NOW SUBMITTED. WHILE PERMANENT TOTAL DISABILITY IS INCONSISTENT WITH ACTUAL MILITARY OR NAVAL SERVICE AND A RETROACTIVE FINDING OF PERMANENT TOTAL DISABILITY COULD NOT BE RECOGNIZED AS MATURING A POLICY AS OF A DATE PRIOR TO DISCHARGE WHERE THE MILITARY OR NAVAL RECORD OF THE INSURED DISCLOSED NO DISABILITY AT TIME OF DISCHARGE, SINCE THERE EXISTS NO STATUTORY PROHIBITION AGAINST THE MATURING OF TERM INSURANCE BY A RETROACTIVE RATING OF PERMANENT TOTAL DISABILITY AS OF A DATE DURING MILITARY OR NAVAL SERVICE OF THE INSURED, SUCH A RATING MAY BE RECOGNIZED WHERE THE MILITARY OR NAVAL RECORD DISCLOSES A DISABILITY DURING THE PERIOD COVERED BY SUCH RETROACTIVE RATING. YOUR FIRST QUESTION IS ANSWERED ACCORDINGLY.

AS THE FORMER DECISION HELD, A RETROACTIVE RATING OF PERMANENT TOTAL DISABILITY COULD NOT DEFEAT AN APPLICATION FOR INSURANCE PROPERLY MADE AND ACCEPTED DURING MILITARY OR NAVAL SERVICE UNDER THE TERMS OF THE CONTROLLING STATUTE. THEREFORE THE MATURING OF THE INSURANCE ON THE BASIS OF SUCH A RATING MUST BE CONSIDERED AS HAPPENING ON OR SUBSEQUENT TO THE DATE OF APPLICATION. IF THE MILITARY OR NAVAL RECORD OF THE INSURED DISCLOSES A DISABILITY ON OR SUBSEQUENT TO DATE OF APPLICATION FOR TERM INSURANCE LAWFULLY MADE DURING SERVICE AND THAT SUCH DISABILITY CONTINUED TO DATE OF DISCHARGE, PERMANENT TOTAL DISABILITY BENEFITS MAY BE AWARDED, UNDER A RETROACTIVE FINDING OF PERMANENT TOTAL DISABILITY, FROM AND AFTER THE DATE OF APPLICATION FOR INSURANCE OR FROM SUCH SUBSEQUENT DATE AS THE DISABILITY IS DISCLOSED BY THE MILITARY OR NAVAL RECORD TO HAVE ARISEN. BUT WHERE THE MILITARY OR NAVAL RECORD OF THE INSURED DISCLOSES NO DISABILITY AT TIME OF DISCHARGE A RETROACTIVE FINDING BY THE VETERANS' BUREAU OF PERMANENT TOTAL DISABILITY PRIOR TO DATE OF DISCHARGED CAN NOT BE ACCEPTED AS AUTHORITY FOR PAYMENT OF INSURANCE BENEFITS AS FOR PERMANENT TOTAL DISABILITY EFFECTIVE FROM A DATE PRIOR TO DISCHARGE. QUESTION 2 IS ANSWERED ACCORDINGLY.

THE CASE OF ALEXANDER M. SINCLAIR SHOULD BE DISPOSED OF IN ACCORDANCE WITH THIS DECISION. AWARDS HERETOFORE MADE AND IN COURSE OF PAYMENT CONTRARY TO THIS DECISION NEED NOT NOW BE DISTURBED.