B-122121, MAY 10, 1955

B-122121: May 10, 1955

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PRECIS-UNAVAILABLE SECRETARY OF DEFENSE: REFERENCE IS MADE TO LETTER DATED NOVEMBER 16. ARE REQUIRED TO BE RETURNED TO APPROPRIATIONS OF THE DEPARTMENT CONCERNED IN CASES OF PERSONS WITHIN PURVIEW OF THE MISSING PERSONS ACT OF 1942. THE LETTER IS ACCOMPANIED BY COMMITTEE ACTION #108 OF THE MILITARY PAY AND ALLOWANCE COMMITTEE OF THE DEPARTMENT OF DEFENSE. IN THE COMMITTEE ACTION RECONSIDERATION ON THE DECISION OF JULY 6 IS REQUESTED AND CERTAIN SPECIFIC QUESTIONS ARE PRESENTED FOR OUR CONSIDERATION. WHICH ARE UNEARNED BY REASON OF HAVING BEEN PAID FOR A PERIOD SUBSEQUENT TO THE DEATH OF THE INSURED AS DETERMINED BY THE VETERANS ADMINISTRATION FOR INSURANCE PURPOSES - SUCH DATE BEING PRIOR TO THAT ESTABLISHED BY MILITARY DEPARTMENTS UNDER SECTION 5 OF THE ACT - ARE TO BE RETURNED TO THE APPROPRIATION ORIGINALLY CHARGED THEREWITH OR TO "REPAYMENTS.

B-122121, MAY 10, 1955

PRECIS-UNAVAILABLE

SECRETARY OF DEFENSE:

REFERENCE IS MADE TO LETTER DATED NOVEMBER 16, 1954, FROM THE ASSISTANT SECRETARY OF DEFENSE (COMPTROLLER) REQUESTING A DECISION AS TO WHETHER OR NOT UNEARNED PREMIUMS ON COMMERCIAL LIFE INSURANCE POLICIES OF MEMBERS OF THE ARMED FORCES, PAID BY ALLOTMENT TO COMMERCIAL INSURANCE COMPANIES, ARE REQUIRED TO BE RETURNED TO APPROPRIATIONS OF THE DEPARTMENT CONCERNED IN CASES OF PERSONS WITHIN PURVIEW OF THE MISSING PERSONS ACT OF 1942, RATHER THAN REFUNDED TO THE INDIVIDUAL ENTITLED TO ARREARS OF PAY.

THE LETTER IS ACCOMPANIED BY COMMITTEE ACTION #108 OF THE MILITARY PAY AND ALLOWANCE COMMITTEE OF THE DEPARTMENT OF DEFENSE, WHICH CONTAINS A DETAILED DISCUSSION OF THE MATTER AND REFERS TO OUR DECISION OF JULY 6, 1954, B-114088. THE DECISION CONCERNED THE DISPOSITION OF UNEARNED PREMINUMS PAID BY ALLOTMENT ON NATIONAL SERVICE LIFE INSURANCE. IN THE COMMITTEE ACTION RECONSIDERATION ON THE DECISION OF JULY 6 IS REQUESTED AND CERTAIN SPECIFIC QUESTIONS ARE PRESENTED FOR OUR CONSIDERATION.

THE DECISION OF JULY 6, HELD THAT NATIONAL SERVICE LIFE INSURANCE PREMIUMS PAID BY ALLOTMENT UNDER SECTION 3 OF THE MISSING PERSONS ACT, 56 STAT. 144, AS AMENDED, 50 U.S.C. APP. 1003, WHICH ARE UNEARNED BY REASON OF HAVING BEEN PAID FOR A PERIOD SUBSEQUENT TO THE DEATH OF THE INSURED AS DETERMINED BY THE VETERANS ADMINISTRATION FOR INSURANCE PURPOSES - SUCH DATE BEING PRIOR TO THAT ESTABLISHED BY MILITARY DEPARTMENTS UNDER SECTION 5 OF THE ACT - ARE TO BE RETURNED TO THE APPROPRIATION ORIGINALLY CHARGED THEREWITH OR TO "REPAYMENTS, LAPSED APPROPRIATIONS," WHICHEVER IS APPROPRIATE, AND THAT SUCH PREMIUMS ARE NOT FOR REFUND TO THE INDIVIDUAL ENTITLED TO ARREARS OF PAY.

THE QUESTIONS PRESENTED INVOLVE SECTIONS 2, 3, 5 AND 9 OF THE MISSING PERSONS ACT, AS AMENDED, WHICH PROVIDE, IN PERTINENT PART, AS FOLLOWS:

SECTION 2.

"ANY PERSON WHO IS IN ACTIVE SERVICE AND WHO IS OFFICIALLY DETERMINED TO BE ABSENT IN A STATUS OF MISSING, MISSING IN ACTION, *** SHALL, FOR THE PERIOD HE IS OFFICIALLY CARRIED OR DETERMINED TO BE IN ANY SUCH STATUS, BE ENTITLED TO RECEIVE OR TO HAVE CREDITED TO HIS ACCOUNT THE SAME PAY AND ALLOWANCES TO WHICH HE WAS ENTITLED AT THE BEGINNING OF SUCH PERIOD OF ABSENCE OR MAY BECOME ENTITLED THEREAFTER, AND ENTITLEMENT TO PAY AND ALLOWANCES SHALL TERMINATE UPON THE DATE OF RECEIPT BY THE DEPARTMENT CONCERNED OF EVIDENCE THAT THE PERSON IS DEAD OR UPON THE DATE OF DEATH PRESCRIBED OR DETERMINED UNDER PROVISIONS OF SECTION 5 OF THIS ACT ***"

SECTION 3.

"FOR THE PERIOD THAT ANY PERSON IS ENTITLED UNDER SECTION 2 OF THIS ACT TO RECEIVE OR BE CREDITED WITH PAY AND ALLOWANCES, SUCH ALLOTMENTS AS MAY HAVE BEEN EXECUTED PRIOR TO THE BEGINNING OF HIS ABSENCE, *** MAY BE CONTINUED, *** PROVIDED FURTHER, THAT ANY PREMIUM PAID BY THE GOVERNMENT ON INSURANCE ISSUED ON THE LIFE OF A PERSON, WHICH IS UNEARNED BY REASON OF BEING FOR A PERIOD SUBSEQUENT TO THE DATE OF DEATH OF SUCH PERSON, SHALL REVERT TO THE APPROPRIATION OF THE DEPARTMENT CONCERNED."

SECTION 5.

"*** WHEN A FINDING OF DEATH IS MADE IT SHALL INCLUDE THE DATE UPON WHICH DEATH SHALL BE PRESUMED TO HAVE OCCURRED FOR THE PURPOSES OF TERMINATION OF CREDITING PAY AND ALLOWANCES, SETTLEMENT OF ACCOUNTS, *** AND SUCH DATE SHALL BE THE DAY FOLLOWING THE DAY OF EXPIRATION OF AN ABSENCE OF TWELVE MONTHS, OR IN CASES IN WHICH THE MISSING STATUS SHALL HAVE BEEN CONTINUED AS HEREINBEFORE AUTHORIZED, A DAY TO BE DETERMINED BY THE HEAD OF THE DEPARTMENT."

SECTION 9.

"THE HEAD OF THE DEPARTMENT CONCERNED, *** SHALL HAVE AUTHORITY TO MAKE ALL DETERMINATIONS NECESSARY IN THE ADMINISTRATION OF THIS ACT, AND FOR THE PURPOSES OF THIS ACT DETERMINATIONS SO MADE SHALL BE CONCLUSIVE AS TO DEATH OR FINDING OF DEATH ***. EXCEPTING ALLOTMENTS FOR UNEARNED INSURANCE PREMIUMS, ANY ALLOTMENTS PAID FROM PAY AND ALLOWANCES OF ANY PERSON FOR THE PERIOD OF THE PERSON'S ENTITLEMENT UNDER THE PROVISIONS OF SECTION 2 OF THIS ACT TO RECEIVE OR HAVE CREDITED SUCH PAY AND ALLOWANCES SHALL NOT BE SUBJECT TO COLLECTION FROM THE ALLOTTEE AS OVERPAYMENTS WHEN PAYMENT THEREOF HAS BEEN OCCASIONED BY DELAY IN RECEIPT OF EVIDENCE OF DEATH, AND ANY ALLOTMENT PAYMENTS FOR PERIODS SUBSEQUENT TO THE TERMINATION, UNDER THIS ACT OR OTHERWISE, OF ENTITLEMENT TO PAY AND ALLOWANCES, THE PAYMENT OF WHICH HAS BEEN OCCASIONED BY DELAY IN RECEIPT OF EVIDENCE OF DEATH, SHALL NOT BE SUBJECT TO COLLECTION FROM THE ALLOTTEE OR CHARGED AGAINST THE PAY OF THE DECEASED PERSON. ***"

IN THE COMMITTEE ACTION IT IS STATED THAT THE PREMIUMS IN QUESTION ARE THOSE PAID BY ALLOTMENTS (WHICH WERE CONTINUED IN EFFECT UNDER SECTION 3 OF THE ACT) DURING A PERIOD IN WHICH THE MEMBERS ENTITLEMENT TO PAY CONTINUED BY VIRTUE OF SECTION 2 OF THE ACT, AND THAT CORRESPONDING DEDUCTIONS WERE MADE FROM THE PAY OF THE MEMBER CONCERNED. IT IS POINTED OUT THAT THE ONLY CASES INVOLVED ARE THOSE IN WHICH THE MEMBERS WERE OFFICIALLY REPORTED MISSING, OR MISSING IN ACTION AND A PRESUMPTIVE DATE OF DEATH (AS DISTINGUISHED FROM AN ACTUAL DATE OF DEATH) WAS DETERMINED BY THE MILITARY DEPARTMENTS UNDER SECTION 5 OF THE ACT. IT IS ALSO STATED THAT IN THESE CASES ALLOTMENTS IN EFFECT FOR PAYMENT OF PREMIUMS ON INSURANCE (COMMERCIAL AND GOVERNMENT) WERE NOT DISCONTINUED UNTIL THE END OF THE MONTH PRECEDING THAT IN WHICH DEATH WAS PRESUMED TO HAVE OCCURRED (WITH DEDUCTIONS MADE FROM THE MEMBERS PAY) ON THE ASSUMPTION THAT SUCH PAYMENTS WERE REQUIRED TO PAY PREMIUMS ON THE INSURANCE THROUGH THE MONTH IN WHICH DEATH OCCURRED. HOWEVER, UPON RECEIPT OF THE REPORT OF DEATH FROM THE MILITARY DEPARTMENTS THE VETERANS ADMINISTRATION, AND SOME COMMERCIAL LIFE INSURANCE COMPANIES, ADMINISTRATIVELY ESTABLISHED THE DATE OF DEATH FOR INSURANCE PURPOSES AS OF THE MISSING OR MISSING IN ACTION DATE RATHER THAN USING THE LATER DATE OF DEATH DETERMINED BY THE MILITARY DEPARTMENTS FOR PAY AND ALLOWANCE PURPOSES UNDER THE MISSING PERSONS ACT. IT IS FURTHER STATED THAT AS A RESULT OF SUCH ACTION, PREMIUMS HAVE BEEN PAID BY ALLOTMENTS WHICH THE INSURANCE COMPANY (VETERANS ADMINISTRATION OR COMMERCIAL) CONSIDER TO BE UNEARNED BECAUSE THEY WERE PAID FOR A PERIOD SUBSEQUENT TO THE DATE OF DEATH ESTABLISHED BY THE INSURANCE COMPANY.

THE POSITION OF THE COMMITTEE IN THE MATTER IS THAT THE PREMIUMS IN QUESTION DO NOT REPRESENT "PREMIUMS PAID BY THE GOVERNMENT" WITHIN THE MEANING OF SECTION 3 OF THE ACT, AND THUS, THAT SUCH PREMIUMS ARE PAYABLE AS SUPPLEMENTAL ARREARS OF PAY.

A DECISION IS REQUESTED ON FOUR SPECIFIC QUESTIONS, WHICH ARE AS FOLLOWS:

"QUESTION 1:

"IF A COMMERCIAL INSURANCE COMPANY REFUNDS UNEARNED PREMIUMS PAID BY ALLOTMENT IN ACCORDANCE WITH THE MISSING PERSONS ACT AND DEDUCTED FROM THE MEMBER'S PAY, WHICH THE COMPANY CONSIDERS TO BE UNEARNED AND WHICH HAVE BEEN PAID FOR A PERIOD PRIOR TO THE DATE OF DEATH ESTABLISHED BY THE MILITARY DEPARTMENTS UNDER THE PROVISIONS OF SECTION 5 OF THE SAID ACT, ARE SUCH AMOUNTS PROPERLY DUE AND PAYABLE AS SUPPLEMENTAL ARREARS OF PAY?

"QUESTION 2:

"DOES THE DATE OF DEATH, AS USED IN THE SECOND PROVISO OF SECTION 3 OF THE MISSING PERSONS ACT, AS AMENDED, MEAN THE DATE OF DEATH DETERMINED BY THE MILITARY DEPARTMENTS UNDER THE PROVISIONS OF SECTION 5 OF THE SAID ACT?

"QUESTION 3:

"IF QUESTION 2 IS ANSWERED IN THE AFFIRMATIVE, DOES THE SECOND PROVISO OF SECTION 3 OF SAID ACT, MEAN THAT ONLY THOSE UNEARNED PREMIUMS WHICH HAVE BEEN PAID FOR A PERIOD SUBSEQUENT TO THE TERMINATION OF ENTITLEMENT TO PAY UNDER SECTION 2 OF THE SAID ACT, AND NOT DEDUCTED FROM THE MEMBER'S PAY, SHALL REVERT TO THE APPROPRIATION OF THE DEPARTMENT CONCERNED?

"QUESTION 4:

"IF QUESTIONS 2 AND 3 ARE ANSWERED IN THE AFFIRMATIVE, ARE THOSE PREMIUMS PAID BY ALLOTMENT (AND DEDUCTED FROM MEMBERS PAY) TO THE VETERANS ADMINISTRATION WHICH ARE DETERMINED TO BE UNEARNED BY THE VETERANS ADMINISTRATION, AND FOR A PERIOD PRIOR TO THE DATE OF DEATH ESTABLISHED UNDER THE PROVISIONS OF SECTION 5 OF THE SAID ACT, TO BE RETURNED TO THE MILITARY DEPARTMENTS FOR SETTLEMENT AS SUPPLEMENTAL ARREARS OF PAY, OR MAY THEY BE PAID BY THE VETERANS ADMINISTRATION TO THE BENEFICIARY ENTITLED TO THE PROCEEDS OF THE INSURANCE POLICY?"

IT IS CONTENDED, IN SUBSTANCE, IN THE COMMITTEE ACTION THAT RETURNING SUCH UNEARNED PREMIUMS TO THE APPROPRIATIONS OF THE DEPARTMENT CONCERNED WITHOUT PERMITTING THE AMOUNTS INVOLVED TO BE PAID AS ARREARS OF PAY WOULD RESULT IN THE MEMBERS' HEIRS RECEIVING LESS THAN THAT TO WHICH THEY ARE ENTITLED AND THE APPROPRIATION BEING CREDITED WITH AN AMOUNT OVER WHAT IT IS ENTITLED TO, EQUAL TO THE PREMIUMS REFUNDED BY THE VETERANS ADMINISTRATION OR THE COMMERCIAL INSURANCE COMPANY. IT IS SUGGESTED THAT SUCH RESULT IS NOT REQUIRED BY LAW AND IS CONTRARY TO THE INTENT OF CONGRESS. IT IS ALSO STATED THEREIN THAT:

"IN THIS CONNECTION, IT WILL BE NOTED ON PAGE 4, HOUSE REPORT 1674, IT WAS STATED: 'DEPENDENTS OF ABSENT PERSONS HAVE BEEN GIVEN THE ASSURANCE THAT IS FOUND IN THE LAW THAT THE PAY AND ALLOWANCES OF ABSENTEE CONTINUE; THAT THE AMOUNTS NOT PAID OUT BY ALLOTMENT WILL BE AVAILABLE TO THE MAN IF HE RETURNS AND WILL BE PAYABLE TO HIS HEIRS IF HE DOES NOT. THESE DEPENDENTS HAVE NO REASON TO BELIEVE THAT PAY CREDIT ENDS AT THE DATE OF DEATH WHICH MAY BE UNKNOWN FOR A CONSIDERABLE TIME AFTER IT OCCURS. NEITHER PAY CREDITS NOR ALLOTMENT PAYMENTS SHOULD BE RETROACTIVELY INVALIDATED OR MADE ILLEGAL BY DELAY IN RECEIPT OF A REPORT OF DEATH.'"

UPON CAREFUL RECONSIDERATION OF THE MATTER AND IN LIGHT OF THE INFORMATION AND VIEWS NOW OF RECORD IT IS OUR CONSIDERED OPINION THAT THE LAST PROVISO OF SECTION 3 OF THE ACT, WHICH REQUIRES "THAT ANY PREMIUM PAID BY THE GOVERNMENT ON INSURANCE ISSUED ON THE LIFE OF A PERSON, WHICH IS UNEARNED BY REASON OF BEING FOR A PERIOD SUBSEQUENT TO THE DATE OF DEATH OF SUCH PERSON SHALL REVERT TO THE APPROPRIATION OF THE DEPARTMENT CONCERNED" (EMPHASIS ADDED), SHOULD BE INTERPRETED AS REFERRING ONLY TO PREMIUMS PAID BY AN ALLOTMENT SUBSEQUENT TO THE DATE THE MEMBER'S ENTITLEMENT TO PAY AND ALLOWANCES TERMINATES UNDER SECTION 2 OF THE ACT, SINCE PRIOR TO SUCH DATE THE AMOUNT OF THE INSURANCE PREMIUMS PAID BY THE GOVERNMENT WERE DEDUCTED FROM THE MEMBER'S PAY. HENCE, PRIOR TO THE DATE THE MEMBER'S ENTITLEMENT TO PAY AND ALLOWANCES TERMINATED UNDER SECTION 2, THE INSURANCE PREMIUMS WERE, IN EFFECT, PAID BY THE MEMBER AND NOT "PAID BY THE GOVERNMENT" WITHIN THE MEANING OF THAT PHRASE AS USED IN THE LAST PROVISO OF SECTION 3 OF THE ACT.

NO GOOD REASON IS PERCEIVED WHY A DIFFERENT CONCLUSION SHOULD BE REACHED WITH RESPECT TO UNEARNED PREMIUMS ON NATIONAL SERVICE LIFE INSURANCE OR OTHER GOVERNMENT INSURANCE. THEREFORE, INSURANCE PREMIUMS PAID BY ALLOTMENT (AND DEDUCTED FROM THE MEMBERS PAY) TO THE VETERANS ADMINISTRATION WHICH ARE DETERMINED TO BE UNEARNED BY REASON OF HAVING BEEN PAID FOR A PERIOD SUBSEQUENT TO THE DATE OF DEATH AS ESTABLISHED BY THE ADMINISTRATOR OF VETERANS AFFAIRS FOR INSURANCE PURPOSES SHOULD BE RETURNED TO THE MILITARY DEPARTMENTS FOR SETTLEMENT AS SUPPLEMENTAL ARREARS OF PAY. THE VETERANS ADMINISTRATION MAY NOT PAY THE UNEARNED PREMIUMS TO THE BENEFICIARY ENTITLED TO THE PROCEEDS OF THE INSURANCE POLICY WITHOUT SPECIFIC STATUTORY AUTHORITY, SINCE THE BENEFICIARY OF THE INSURANCE POLICY MAY NOT BE THE PERSON ENTITLED TO RECEIVE THE DECEASED MEMBER'S ARREARS OF PAY. QUESTION 4 IS ANSWERED ACCORDINGLY.

TO THE EXTENT THAT THE DECISION OF JULY 6, 1954, IS CONTRARY TO THE FOREGOING IT NEED NO LONGER BE FOLLOWED.