NOVEMBER 12, 1923, 3 COMP. GEN. 303

NOVEMBER 12, 1923, 3 COMP. GEN. 303

WAR-RISK INSURANCE - DESIGNATION OF BENEFICIARIES IN THE ABSENCE OF A BENEFICIARY WITHIN THE PERMITTED CLASS HAVING BEEN DESIGNATED IN A CONVERTED WAR RISK INSURANCE POLICY, IT IS PROPER FOR THE VETERANS' BUREAU, BEFORE APPROVING AN AWARD TO THE TESTATE UNDER SECTION 16, ACT OF DECEMBER 24, 1919, 41 STAT., 376, TO DETERMINE WHETHER A BENEFICIARY WITHIN THE PERMITTED CLASS HAD OTHERWISE BEEN DESIGNATED; THE ATTEMPTED DESIGNATION OF A FOSTER FATHER IN THE ORIGINAL APPLICATION FOR SUCH CONVERTED INSURANCE FILED BETWEEN OCTOBER 6, 1917, AND DECEMBER 24, 1919, WHICH WAS CHANGED TO A DESIGNATION OF THE ESTATE ON REPRESENTATION TO INSURED THAT PERSONS IN LOCO PARENTIS WERE NOT PERMITTED BENEFICIARIES, MAY BE HELD TO ESTABLISH THE INTENT OF THE INSURED AND, THE DESIGNATION OF PERSONS IN LOCO PARENTIS HAVING BEEN RETROACTIVELY AUTHORIZED BY THE ACT OF DECEMBER 24, 1919, 41 STAT., 375, PAYMENT OF THE AWARD TO THE FOSTER FATHER WAS PROPER.

COMPTROLLER GENERAL MCCARL TO THE DIRECTOR, UNITED STATES VETERANS' BUREAU, NOVEMBER 12, 1923:

YOUR LETTER OF SEPTEMBER 24, 1923, WAS RECEIVED REQUESTING REVIEW OF SETTLEMENT NO. W-230, THIS OFFICE, DATED FEBRUARY 27, 1923, DISALLOWING IN THE ACCOUNTS OF WILLIAM H. HOLMES, DISBURSING CLERK, UNITED STATES VETERANS' BUREAU, FOR THE PERIOD APRIL 1, 1922, TO JUNE 30, 1923, THE AMOUNT OF $788.13 REPRESENTING PAYMENT OF INSURANCE TO ARTHUR A. BOUBREAUX, AS FOSTER FATHER OF SAMUEL MARXWELL BRISTOW, DECEASED.

THE FACTS ARE REPORTED AS FOLLOWS:

ON SEPTEMBER 1, 1919, SAMUEL MARXWELL BRISTOW, THEN IN THE MILITARY SERVICE, APPLIED FOR TERM INSURANCE IN THE SUM OF $10,000.00, AND NOMINATED AS HIS BENEFICIARY HIS FOSTER FATHER, ARTHUR A. BOUDREAUX. OCTOBER 10, 1919, AND WHILE STILL IN THE SERVICE, THE INSURED APPLIED FOR THE CONVERSION OF $1,000.00 OF HIS INSURANCE ON A TWENTY YEAR ENDOWMENT PLAN. THERE WAS FORWARDED TO THE BUREAU AN APPLICATION FOR THIS CONVERSION, ON THE TOP OF WHICH WERE THE WORDS "CORRECTED PY," AND IN THIS APPLICATION THE INSURED NAMED HIS ESTATE AS BENEFICIARY. THE HISTORY OF THIS APPLICATION FOR CONVERSION IS GIVEN BY FRANK KEHOE, JR., 1ST LIEUTENANT, AIR SERVICE, IN THE ENDORSEMENT, AS FOLLOWS:

"HEADQUARTERS, BROOKS FIELD,

"SAN ANTONIA, TEXAS, JULY 18, 1921. "TO: BUREAU OF WAR RISK INSURANCE WASHINGTON, D.C.

"1. RETAINED RECORDS AT THIS STATION SHOW THAT ORIGINAL APPLICATION WAS FOR $10,000 TERM INSURANCE, NAMING AS BENEFICIARY A FOSTER FATHER. OCTOBER 10TH, 1919, APPLICATION WAS MADE FOR $1,000 CONVERTED INSURANCE, NAMING SAME BENEFICIARY (FOSTER FATHER). THIS LAST APPLICATION WAS RETURNED FROM INSURANCE SECTION, HEADQUARTERS, SOUTHERN DEPARTMENT, ON OCTOBER 16TH, 1919, SUGGESTING THAT THE WORD "ESTATE" BE USED AS BENEFICIARY. THIS SUGGESTION WAS COMPLIED WITH AND A NEW APPLICATION WAS EXECUTED AND MARKED "CORRECTED COPY; " THEREFORE THE ORIGINAL APPLICATION FOR CONVERTED INSURANCE WAS NEVER FORWARDED TO THE BUREAU.

"FRANK KEHOE, JR.,

"1ST LIEUTENANT, AIR SERVICE.'

PREMIUMS WERE PAID ON THIS INSURANCE UP TO AND INCLUDING FEBRUARY 8, 1920. THE INSURED DIED IN THE SERVICE ON FEBRUARY 8, 1920. AT THE DATE OF THE INSURED'S DEATH NO POLICY OF CONVERTED INSURANCE HAD BEEN ISSUED BY THIS BUREAU, AND, OF COURSE, NONE HAD BEEN ISSUED TO BRISTOW. EFFORTS HAVE BEEN MADE TO LOCATE THE ORIGINAL APPLICATION FOR CONVERSION, BUT WITHOUT SUCCESS.

POLICY NO. K 80248 FOR CONVERTED INSURANCE IN THE AMOUNT OF $1,000 APPARENTLY ISSUED SUBSEQUENT TO THE DEATH OF THE INSURED, BUT WAS MADE EFFECTIVE NOVEMBER 1, 1919, THE FIRST DAY OF THE MONTH FOLLOWING THAT IN WHICH APPLICATION WAS MADE, IN ACCORDANCE WITH REGULATIONS OF THE BUREAU, TREASURY DECISION 52, WAR RISK, SEPTEMBER 29, 1919. IN THIS POLICY THE BENEFICIARY WAS DESIGNATED AS "ESTATE AS PROVIDED HEREIN.'

THE "ESTATE" IS NOT WITHIN THE PERMITTED CLASS OF BENEFICIARIES AS PRESCRIBED BY SECTION 402 OF THE ACT OF OCTOBER 6, 1917, 40 STAT., 409, OR AS ENLARGED BY SECTION 13 OF THE ACT OF DECEMBER 24, 1919, 41 STAT., 375. 2 COMP. GEN., 510.

SECTION 16 OF THE ACT OF DECEMBER 24, 1919, 41 STAT., 376, PROVIDES AS FOLLOWS:

SEC. 16. THAT IF NO BENEFICIARY WITHIN THE PERMITTED CLASS BE DESIGNATED BY THE INSURED AS BENEFICIARY FOR CONVERTED INSURANCE, GRANTED UNDER THE PROVISIONS OF ARTICLE IV OF THE WAR RISK INSURANCE ACT, EITHER IN HIS LIFETIME OR BY HIS LAST WILL AND TESTAMENT, OR IF THE DESIGNATED BENEFICIARY DOES NOT SURVIVE THE INSURED, THEN THERE SHALL BE PAID TO THE ESTATE OF THE INSURED THE REMAINING UNPAID MONTHLY INSTALLMENTS; OR IF THE DESIGNATED BENEFICIARY SURVIVES THE INSURED AND DIES BEFORE RECEIVING ALL OF THE INSTALLMENTS OF CONVERTED INSURANCE PAYABLE AND APPLICABLE, THEN THERE SHALL BE PAID TO THE ESTATE OF SUCH BENEFICIARY THE REMAINING UNPAID MONTHLY INSTALLMENTS.

THIS PROVISION IS CONTAINED IN PARAGRAPH 12 OF THE POLICY OF CONVERTED INSURANCE ISSUED IN THIS CASE.

IN THE ABSENCE OF A BENEFICIARY WITHIN THE PERMITTED CLASS HAVING BEEN DESIGNATED IN THE POLICY, IT WAS PROPER, BEFORE APPROVAL OF AWARD TO THE ESTATE, FOR THE BUREAU TO DETERMINE WHETHER A BENEFICIARY WITHIN THE PERMITTED CLASS HAD OTHERWISE BEEN DESIGNATED. ACCORDINGLY, THE EXISTENCE OF THE TWO APPLICATIONS AND THE ORIGINAL ATTEMPTED DESIGNATION OF THE FOSTER FATHER CONSTITUTED ADMISSIBLE EVIDENCE TO SHOW THE INTENT OF THE INSURED. AT THE TIME OF THE ORIGINAL DESIGNATION, THE FOSTER FATHER, AS A PERSON STANDING IN LOCO PARENTIS TO THE INSURED, WAS NOT WITHIN THE DEFINITION OF "PARENT" AS PRESCRIBED BY SECTION 22 (4) OF THE ACT OF OCTOBER 6, 1917, 40 STAT., 401, BUT PRIOR TO THE TIME THE INSURANCE ACCRUED THE ACT OF DECEMBER 24, 1919, 41 TAT., 371, ENLARGING THE DEFINITION OF "PARENT" TO INCLUDE PERSONS STANDING IN LOCO PARENTIS RETROACTIVELY EFFECTIVE TO OCTOBER 6, 1917, HAD VALIDATED THE PREVIOUS DESIGNATION OF THE FOSTER FATHER AND THE AWARD TO HIM IN THIS CASE WAS PROPER.

UPON REVIEW THERE IS CERTIFIED THE AMOUNT OF $788.13 FOR ALLOWANCE IN THE ACCOUNTS OF THE DISBURSING OFFICER, WILLIAM H. HOLMES.