(3) The fact and dates with respect to a member absent without leave.

(4) The operation of the forfeiture provision provided in 38 U.S.C. 773 and § 9.34 with respect to any member.

(b) Questions for determination involving paragraph (a) of this section as well as those involving coverage of groups and classes of members and other questions are properly referrable to the Director, Insurance Service.

§ 9.24 Termination of coverage.

(a) A member who is absent without leave for a period of more than 31 days is not covered from the first day of such absence. If a member was absent without leave on September 29, 1965, and the absence was for a period of more than 31 days, he must comply with restoration procedures under § 9.8 to obtain coverage.

(b) If a member converts group coverage to an individual policy which is effective prior to the 121st day following termination of active duty, all group coverage terminates the day before the effective date of the converted policy. (See § 9.4(e) for exception where conversion and death occur within the 120 days following termination of active duty.)

(c) Coverage automatically terminates:

(1) The end of the 120th day following termination of active duty.

(2) Immediately prior to:

(i) The date a member's right to coverage is forfeited under 38 U.S.C. 773 (§ 9.34).

(ii) The date of termination of the group policy.

(a) An insured member has the right to convert the group coverage to an individual policy of life insurance without disability or other supplementary benefits with one of the eligible commercial life insurance companies. Upon written request, a list of such companies may be obtained from the Office of Servicemen's Group Life Insurance. In order to effect conversion the member must make written application to the company selected by him and pay the required premium for the plan of insurance selected before the 121st day following termination of active duty. Such conversion will be made without a medical examination.

(b) The individual policy will be effective (1) if the member is then on active duty, on the first day of the month following the month in which he made application for it; or (2) if he is not on active duty, on any date he requests, but in no event later than the 121st day after his termination of active duty.

(c) The individual policy to which a member converts must be on a plan currently written by the company selected by the member, except term insurance, in an amount which does not exceed the amount of the member's group coverage at time application for conversion is made, and which does not provide for the payment of any sum less than the face value of the individual policy or for the payment of an additional amount of premiums if the member engages in the military service of the United States. The premium for such individual policy shall be the premium, as determined by the company issuing the policy, applicable to the class of risk (other than health conditions) to which the member belongs and to the form and amount of the individual policy at the member's attained age at date of issue.

(d) Term insurance as excluded by this section is any policy which does not provide for cash values. Otherwise, reinsurers or converters who are group insurers may follow their usual group conversion practices in processing conversions. Other reinsurers or converters should refer questions as to the acceptability of any plan to the insurer for resolution on a consistent basis.

(e) Term riders providing level or decreasing insurance for which an additional premium is charged may be attached to an eligible basic conversion policy, but the rider will be excluded from the conversion pool agreement under the policy. Such a rider may in no way affect basic conversion privileges.

(f) The insurer will establish a conversion pool in cooperation with the reinsurers and converters in accordance with the terms of the policy. Its purpose will be to provide for the determination and maintenance of appropriate charges arising from excess mortality under individual conversion policies issued in accordance with this section and provide for the appropriate distribution of the risk of loss due to such excess mortality among the reinsurers and converters.

§ 9.28 Criteria for reinsurers and con

verters.

The following criteria will control eligibility for reinsuring and converting companies:

(a) The company must be a legal reserve life insurance company as classified by the insurance supervisory authorities of the State of domicile. Qualified fraternal organizations are included.

(b) The company must have been in the life insurance business for a continuous period of 5 years prior to October 1, 1965, or the December 31 preceding any redeterminations of the allocations. In the event of a merger, the 5-year requirement may be satisfied by either the surviving company or by one of the absorbed companies. Upon joint application by a subsidiary of a participating company together with the parent company, the 5-year requirement may be waived provided such parent company owns more than 50 percent of the outstanding stock of the subsidiary and has been a legal reserve life insurance company for a period of 10 years or more.

(c) The company must be licensed to engage in life insurance in at least one State of the United States or the District of Columbia.

(d) The company will not be one

(1) Certified by the Department of Defense as being under suspension for cause for purpose of allotment or on-base solicitation privileges.

(2) That solicits life insurance applications as conversion or other replacement of Servicemen's Group Life Insurance coverage in jurisdictions in which it is not licensed.

(3) That fails to take effective action to correct an improper practice followed by it or its agents within 30 days after written receipt of notice issued by the insurer or the Director, Insurance Service. Improper practice includes

(i) The use for solicitation purposes of lists of names and addresses of former members without obtaining reasonable assurance that such lists have not been obtained contrary to regulations of the Department of Defense or other Uniformed Service.

(ii) Failure to reveal sources and copies of mailing lists upon proper request or to otherwise cooperate in an authorized investigation of a reported improper practice.

(iii) The use of written or oral representations which may mislead the person

addressed as to the true role of the company or its representatives as one of the participating companies.

(iv) The use of written or oral representations which may mislead a person addressed as to rights, privileges, coverage, premiums, or similar matters under Servicemen's Group Life Insurance or any policy issued or proposed to be issued as a conversion or other replacement coverage.

(v) Violation of regulations of a Uniformed Service concerning solicitation of life insurance.

(e) Each reinsuring and converting company must agree to issue conversion policies to any qualified applicant regardless of race, creed, color or national origin, under terms and conditions established by the primary insurer.

[31 F.R. 7175, May 17, 1966, as amended at 32 F.R. 8144, June 7, 1967; 32 F.R. 9165. June 28, 1967]

§ 9.30 Reinsurance formula.

The allocation of insurance to the insurer and each reinsuring company will be based upon the sum of paragraphs (a) and (b) of this section:

(a) One-third of the exact (or a reasonable estimate of) the volume of the company's life insurance in force, at some time between June 30, 1965, and November 15, 1965, on active-duty personnel of the U.S. Armed Forces, paid for by service allotments. The volume of insurance on active-duty personnel written through the medium of Service Membership Associations on an allotment basis is to be included.

(b) An amount of the remaining balance of the total life insurance in force under the policy in proportion to the company's total life insurance in force in the United States on December 31, 1964, where:

The first $100 million in force is counted in full,

The second $100 million in force is counted at 75 percent,

The third $100 million in force is counted at 50 percent,

The fourth $100 million in force is counted at 25 percent,

And any amount above $400 million in force, is counted at 5 percent.

(c) The allocation will be redetermined at the beginning of each policy year for the primary insurer and the companies then reinsuring, with the portion as set forth in paragraph (b) of this section based upon the corresponding in

force (excluding the Servicemen's Group Life Insurance in force) as of the preceding December 31.

(d) Any life insurance company, which is not initially participating in reinsurance or conversions, but satisfies the criteria set forth in § 9.28, may subsequently apply to the primary insurer to reinsure and convert, or to convert only. The participation of such company will be effective as of the beginning of the policy year following the date on which application is approved by the insurer. § 9.32 Actions on the policy.

Servicemen's Group Life Insurance will be payable in accordance with the group policy purchased by the Veterans Administration. The Director, Insurance Service, will furnish the name and address of the insuring company upon written request of a member of the uniformed services or his beneficiary. Actions at law or in equity to recover on the policy, in which there is not alleged any breach of any obligation undertaken by the United States, should be brought against the insurer.

10.36 Proof of marital cohabitation under section 602 or section 312 of the act. Claim of widow not living with veteran at time of veteran's death. Proof of age of veteran's child.

10.38

10.51 10.52 Duplication of payments prohibited 10.53 Payment on duplicate certificate.

Payments to minor child.

AUTHORITY: The provisions of this Part 10 issued under 72 Stat. 1114; 38 U.S.C. 210. Rights and benefits are continued in effect by sec. 12(b), 72 Stat. 1264, 38 U.S.C. note prec. Part 1.

SOURCE: The provisions of this Part 10 appear at 13 F.R. 7122, Nov. 27, 1948, unless otherwise noted.

ADJUSTED COMPENSATION; GENERAL

§ 10.0

Adjusted service pay entitlement. A veteran entitled to adjusted service pay is one whose adjusted service credit does not amount to more than $50 as distinguished from a veteran whose adjusted service credit exceeds $50 and

who therefore is entitled to an adjusted service certificate.

§ 10.1 Issuance of duplicate adjusted service certificate without bond.

If the veteran named in an adjusted service certificate issued pursuant to the provisions of section 501 of the World War Adjusted Compensation Act, without bad faith, has not received such certificate, or if prior to receipt by the veteran such certificate was destroyed wholly or in part or was so defaced as to impair its value, or, if after delivery it was partially destroyed or defaced so as to impair its value but can be identified to the satisfaction of the Administrator, a duplicate adjusted service certificate will be issued upon application and a bond of indemnity will not be required: Provided, That if the adjusted service certificate was destroyed in part or so defaced as to impair its value, the veteran or person entitled to payment thereon will be required to surrender to the Veterans' Administration the original certificate or so much thereof as may remain.

§ 10.2 Evidence required of loss, destruction or mutilation of adjusted service certificate.

The veteran named in an adjusted service certificate issued pursuant to the provisions of section 501 of the World War Adjusted Compensation Act, or the person entitled to payment thereon will be required to furnish evidence of the nonreceipt of the adjusted service certificate, or of its receipt in a mutilated or defaced condition, or of the loss or destruction in whole or in part or defacement of the certificate after its receipt, as the case may be. The evidence must be sufficient to establish to the satisfaction of the Administrator that neither the veteran nor the person entitled to payment thereon, or any person for or on their behalf, received the adjusted service certificate, or that at the time of its receipt it was mutilated or defaced to such an extent as to impair its value, or that after receipt of the certificate it was lost or destroyed in whole or in part or defaced, but without bad faith on the part of the veteran, and that every effort has been made to recover the lost certificate. Unless determination is otherwise made by the Administrator the evidence must be in the form of a written statement sworn to by the veteran or person entitled to payment thereon and witnessed by at least two

persons who shall state, under oath, that they personally know the afflant, that they have read his or her statement and that it is true to the best of their knowledge and belief. These statements should be supplemented by affidavits of any persons having personal knowledge of additional facts and circumstances concerning the matter, and the Administrator may require any additional evidence deemed necessary.

§ 10.3

Issuance of duplicate adjusted service certificate with bond.

An indemnity bond will be required as a prerequisite to the issuance of a duplicate adjusted service certificate in all cases where the certificate was lost after receipt by the veteran, or after receipt by the veteran was defaced or mutilated and cannot be identified to the satisfaction of the Administrator, provided the loss, defacement, or mutilation was without bad faith on the part of the veteran or the person entitled to payment thereon. The bond must be in the manner and form prescribed by the Veterans' Administration and for an amount equal to the face value of the certificate, with surety or sureties residents of the United States and satisfactory to the Administrator, with condition to indemnify and save harmless the United States from any claim on account of such certificate. If the certificate was defaced or mutilated the veteran or person entitled to payment thereon will be required to surrender to the Veterans' Administration the certificate or so much thereof as may remain.

§ 10.4 Loss, destruction, or mutilation of adjusted service certificate while in possession of Veterans' Administration.

A new adjusted service certificate will be issued without bond in lieu of the cer tificate which has been lost or destroyed, or has been mutilated, defaced or dam aged so as to impair its value, while in possession of the Veterans' Administration.

to time with the approval of the Administrator change such beneficiaries. The designated beneficiaries shall share equally unless otherwise specified by the veteran. Wherever the word "beneficiary" appears in the law and Veterans' Administration regulations it shall be interpreted to include beneficiaries.

§ 10.16 Conditions requisite for change in designation of beneficiary.

A change of beneficiary of an adjusted service certificate to be valid must be made:

(a) By notice signed by the veteran, or his duly authorized agent, and delivered or properly mailed to the Veterans' Administration during the lifetime of the veteran. Such change shall not take effect until approved by the Administrator and after such approval the change shall be deemed to have been made as of the date the veteran signed said written notice and change, whether the veteran be living at the time of said approval or not.

(b) Or by last will and testament of the veteran, duly probated. Such change shall not be effective until received by the Veterans' Administration and approved by the Administrator and after such approval the change shall be deemed to have been made as of the date of death of the veteran: Provided, That a change of beneficiary signed subsequent to the date upon which the will was executed and delivered in accordance with paragraph (a) of this section shall if approved in accordance with regulations take precedence over the designation by will.

Provided however, That any payment made to a beneficiary of record, before notice of change of beneficiary has been received in the Veterans' Administration and approved by the Administrator, shall not be made again to the changed beneficiary.

§ 10.17 Designation of beneficiary subsequent to cancellation of previous designation.

The designation of a beneficiary made subsequent to the cancellation of a previous designation of beneficiary, shall be considered as a change in beneficiary, and shall be subject to the approval of the Administrator and subject to the conditions and requirements respecting change in beneficiary as outlined in § 10.16.

§ 10.18 Approval of application for change of beneficiary heretofore made.

Any application for a change of beneficiary heretofore made may be approved if it meets the requirements set out in §§ 10.16 and 10.17.

§ 10.20 "Demand for payment" certification.

Certification to the execution of "demand for payment" forms appearing on the reverse side of adjusted service certificates issued pursuant to the World War Adjusted Compensation Act, as amended, is required in accordance with instructions printed on said forms. Such certification if made in the United States or possessions will be accepted if made by and bearing the official seal of a United States postmaster, an executive officer of an incorporated bank or trust company, notary public, or any person who is legally authorized to administer oaths in a State, Territory, District of Columbia or in a Federal judicial district of the United States. If the demand for payment be executed in a foreign country, the same shall be certified by an American consul, a recognized representative of an American embassy or legation or by a person authorized to administer oaths under the laws of the place where execution of demand is made, provided there be attached to the certificate of such latter officer a proper certification by an accredited official of the State Department of the United States that the officer certifying to the execution of the demand for payment was authorized to administer oaths in the place where certification was made.

§ 10.22 Payment to estate of decedent.

Wherever the face value of an adjusted service certificate, issued pursuant to the World War Adjusted Compensation Act, as amended, becomes payable to the estate of any decedent and the amount thereof is not over $500 and an administrator has not been or is not to be appointed, such amount will be paid to such person or persons as would, under the laws of the State of residence of the decedent, be entitled to his personal property in case of intestacy.

§ 10.24 Payment of death claim on lost, destroyed or mutilated adjusted service certificate with bond.

If the veteran named in an adjusted service certificate, issued pursuant to the