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The fairness of the provision, however, is apparent, and the bureau recommends it.

Section 16 of the bill repeals section 206 of the act, which requires the filing of proof in certain cases prior to April 6, 1930. It would seem in connection with this amendment that if a man is entitled to compensation there should be no limitation on the filing of proof of his claim. The cost of such an amendment is impossible to estimate.

We feel that the man should have a right at any time to prove his claim, with no limitation.

Senator SHORTRIDGE. Under the law it must be presented and filed by a certain date.

General Hines. The date by which he can file that expired April 6, 1930. This wipes out the limitations. We know, of course, from experience that it will bring in other cases, but I feel, in fairness to the men who have a just claim, that they should have a right to

prove it.

Section 17 of the bill repeals section 209 of the act, which requires the filing of claims prior to April 6, 1930, in certain cases. The same comment with reference to the repeal of section 206 is applicable with reference to this section.

Senator SHORTRIDGE. The repeal of this section leaves it so that

General Hines. So that a veteran can prove a claim at any time, and file a claim at any time. It wipes out the limitation.

Senator SHORTRIDGE. The statutute of limitations, so to speak. General Hines. The statute of limitations; yes.

Section 18 of the bill amends section 210 of the act by the addition of a provision to the effect that nothing contained in that section shall be construed to permit the payment of compensation under the World War veterans' act, as amended, for any period prior to June 7, 1924. Heretofore, the bureau has refused to pay compensation in any cases where the veteran had no right prior to the enactment of the World War veterans' act, 1924, for any period prior to the date of the enactment of this act. Recently the Attorney General and the Comptroller General of the United States ruled that under the language of the statute payments could be made in some cases two years prior to the date of application, and in other cases one year prior to the date of application. The adoption of these opinions by the bureau would have resulted in an additional payment of retroactive compensation amounting to approximately $42,000,000. The bureau recommended this amendment.

We know, Mr. Chairman and gentlemen, that when Congress adopted the act of June 7, 1924, and brought in new groups, that it was contemplated that those benefits would be paid from that date on; and that no retroactive effect was to be given to the additional benefits. Somehow, in conference on the bill, the language which made that very specific seemed to have been eliminated, although the debates and the discussions indicated that it was the intent of Congress that the additional benefits would be from that date on, rather than retroactively, and the bureau has so construed it. A case was submitted, however, to the Comptroller General, and finally the Attorney General said that the act, strictly construed, would enable the veteran to be paid retroactive compensation. On reconsideration the Comptroller General adhered to his finding, but finally concluded that I should have an opportunity, before he would insist upon the

payment--because I was unable to pay it, due to the appropriation--to present the matter again to Congress and have them decide it. So, the bureau recommended this amendment, and it was reported out by the House committee, and has passed the House in this form. We feel, Mr. Chairman, that wherever additional benefits are given, it is a wise course to make them payable from the date of the act, rather than to make them retroactive.

Senator SHORTRIDGE. If the section is amended as it is written here in the bill as it is now before us, then it will permit retroactive payments.

General Hines. No, sir. It will just confirm the bureau's interpretation, that it was the intention of Congress that the new benefits would date from June 7, 1924, rather than two years, or one year prior thereto. There would be no additional payments for those benefits. It would not take anything away that has been paid, but it would confirm the bureau's interpretation, rather than the Comptroller General's interpretation of the act.

Senator SHORTRIDGE. It removes all doubt as to the law.
General Hines. It removes all doubt; yes, sir.

Section 19 of the bill amends section 212 of the act by providing that a claim filed for compensation under the war risk insurance act or the World War veterans' act shall be deemed to be a claim for compensation under both acts and all subsequent amendments thereto. The purpose of this amendment is to give approval to the prior practice of the bureau which has recently been questioned by a decision of the Comptroller General. The bureau has always reviewed cases under amendatory legislation without requiring a new application. However, the Comptroller General insists that a new application be made on the theory that a new right arises under amendatory or new legislation. In view of the fact that the Comptroller General stated in his decision that past benefits paid may not be disturbed, the adoption of this amendment will result in no increased cost to the Government and will simplify the future adjudicatory work of the bureau.

We feel that many of these men, Mr. Chairman, would not know of new benefits, and probably would not file. The bureau reviews the cases and pays them without this new claim. We also feel that it would not do to be too technical with the man in requiring him to make an application for each benefit. He does not always understand the law. It is complicated and difficult for many of us to under stand, and for that reason we feel that this amendment will clear up any doubt that may exist in the mind of the Comptroller General as to our interpretation of the act.

Section 20 of the bill adds a new provision to the act authorizing the director in his discretion to pay to a wife, child, or children of an incompetent veteran drawing compensation who disappears, the same amount of compensation as is provided for the same class of relatives of a veteran who dies of a service connected disability: When a veteran disappears it is necessary for the bureau to suspend all payments pending his reappearance or proof of death. This amendment would appear justifiable, as there is no question but that hardship has resulted from the disappearance of a few incompetent veterans. It would be well, however, if possible, to add a provision that the incompetency must be the result of the disability incurred in

pay it.

be.

the service. Under the amendment as drawn it would be possible for a veteran with a 10 per cent service connected disability, and who was incompetent as a result of a diseases not service connected, to disappear and his dependents receive the benefits of the section. It is not believed that it was the intention to take care of this class of cases. It is impossible to estimate the cost of the amendment.

Some of the veterans who have a service connected disability, and are incompetent, disappear. Their families, of course, are no more aware of where they are than we are, and we feel that the veteran, having been declared entitled to compensation, the best use that could be made of that compensation until he shows up again is to give it to his family, and this would give the bureau the right to

Senator BINGHAM. General, that does not appear in your draft? General Hines. No; it was not included, but I feel that it should

We can include that. It was left out because it was not recommended by us originally, but I think it is a fair provision.

Senator SHORTRIDGE. How is it now done under the law?

General HINES. There is no law that covers, except that a man has to be declared legally dead, and that, of course, depends upon the state of his residence.

Senator SHORTRIDGE. He is an incompetent veteran.
General HINES. Yes.

Senator Walsh of Massachusetts. A proviso should be inserted so that the Government would not be liable when the veteran shows up.

Senator SHORTRIDGE. I was about to throw out that thought. As the law is, for example, you have an incompetent veteran entitled to a certain amount of money.

General HINES. Yes.
Senator SHORTRIDGE. While he is here, to whom does the money go?

General Hines. It goes to the guardian, if a guardian has been appointed. If he has not been declared legally incompetent, it may be paid to the veteran.

Senator SHORTRIDGE. Even though he is held to be incompetent?

General Hines. Yes. If he is declared legally incompetent, a guardian would be appointed, and then the money would be paid to the guardian. But we are speaking more of those veterans, who, we feel, are incompetent to draw their compensation, but are not legally incompetent.

Senator SHORTRIDGE. This proposed amendment deals with a case where he disappears.

General HINES. Yes.
Senator SHORTRIDGE. Nobody knows where he is.
General Hines. Yes, sir.

Senator SHORTRIDGE. And it is designated so that the money which otherwise would go to him if he had not disappeared, may go to his family, his wife and children.

General Hines. Yes.

Senator BINGHAM. Do I understand your answer to Senator Walsh to be that this covers a case like this? Suppose this veteran were not declared legally incompetent, and disappeared for a year. his compensation to his dependents. Then he comes back and wants his compensation.

You pay General Hines. I think the law should cover that, so that we should not make double payment.

Senator Bingham. There is nothing here to prevent his bringing suit to recover that.

General Hines. He can not sue on compensation, Senator. He can sue on insurance, but the Government has not given the veteran the right to sue on compensation.

Senator BINGHAM. He could make a lot of trouble.

General Hines. Yes; he could make it disagreeable, and I think the law should cover that.

Section 21 of the bill amends paragraph 3 of section 301 of the act so as to authorize the reinstatement of insurance by a small class of veterans which is still permitted to carry term insurance. The amendment is in reality a clarification of existing law and was recommended by the bureau. It will result in very little, if any, cost to the Government.

Section 22 of the bill amends section 304 of the act for the same purpose as the previous amendment. The same comment is applicable here as above. It is not believed that any material cost will result from the enactment of this amendment, although it is known that there will be some additional cost.

Section 23 of the bill amends section 307 of the act by making all contracts of insurance issued by the Government incontestable from date of issuance except for fraud, nonpayment of premiums, or on the ground that the applicant was not a member of the military or naval forces. This is a very sweeping amendment and will place beyond contest many contracts and policies of insurance which otherwise would be contestable. It is a well recognized principle of commercial insurance companies, however, and in reality is only a clarification of the existing law which was practically nullified by a recent decision of the Comptroller General. It is believed that some such provision is necessary to stabilize Government insurance, and to insure to the veteran and his beneficiary the payment of the insurance at date of permanent and total disability.

The amendment also prevents the bureau, in connection with suits on original contracts, from raising the plea of estoppel because of the subsequent reinstatement or the conversion of the insurance. This defense is purely a legal one and penalizes the veteran who reinstates or continues his insurance in force, but, being a valid legal defense, there is no authority in the bureau to waive it. While the enactment of these amendments will necessitate a very careful consideration of all applications for insurance, reinstatement, or conversion, and at the same time it would appear essentially fair to the veteran. It is impossible to estimate the cost of such an amendment, but will no doubt result in the payment of many cases which would otherwise be disallowed.

I would like to have Mr. Roberts explain the decision of the comptroller and its effect, if he may.

Mr. ROBERTS. Mr. Chairman, the present World War veterans' act of 1924, as amended, contains a provision to the effect that where a policy is maintained in force for a period of six months, it should be incontestable, except for fraud or nonpayment of premiums. We have followed that, and in all cases where the policy has remained in force for six months we have paid the claim, irrespective of the merits

of it, unless there was fraud or failure to pay premiums. The only cases that have been excepted from that section of the act were where the man originally did not have the right to apply for the insurance, such as a man who was not in the military service, who erroneously made an application, and through an error it was accepted. However, under date of January 16, 1930, notwithstanding the long practice of the bureau, the Comptroller General, in the case of Mabry W. Woodall, held that if a man was permanently and totally disabled at the time he applied for reinstatement of insurance, or conversion of insurance, no matter if he paid the premiums for 10 or 15 years, if the bureau was to administratively then determine that i0 years before he had been permanently and totally disabled at the time he applied, the policy was not incontestable, the statute did not protect it, and the man would have no rights, or his beneficiary would have no rights, whichever was the case.

This was, of course, an overturning of a practice not only in the bureau, but a practice which obtains with all commercial insurance companies. The very purpose of an incontestable clause is to give some stability to the policies, and while the amendment was not recommended by the bureau, we felt the weight and force of the argument in favor of it.

The report of the House committee, which accompanied the amendment, stated that it was to protect all policies except in the one class of cases where the veteran was not originally entitled to apply. It is a very drastic provision, more drastic than any commercial contract, because they usually require the payment of premiums for a period of one or two years. The present statute requires it for six months. This amendment, if adopted, would make it incontestable from the moment of acceptance by the bureau, except for fraud or failure to pay premiums.

Senator SHORTRIDGE. Or

Mr. Roberts. Or the fact that the veteran was not eligible originally to apply.

Senator SHORTRIDGE. At the time of the issuance of the policy.
Mr. ROBERTS. That is correct.
General Hines. The three contingencies.
Senator SHORTRIDGE. Fraud, nonpayment of premiums
Mr. Roberts. And not being eligible for the insurance.
Senator BINGHAM. Not being eligible at any time.

Mr. ROBERTS. That is, not being in the military or naval service at the time of original application.

Senator WALSH of Massachusetts. Has the reinstatement period ended yet?

General HINES. The limitation was wiped out. A man can not reinstate his war risk insurance, but if he was at any time entitled to war risk insurance and is a good risk at this time, he can take converted insurance.

Senator BINGHAM. If he is a good risk.

General Hines. Yes. He has to be a good risk and not permanentiy or totally disabled.

Senator Walsh of Massachusetts. Are you receiving many of those applications?

General HINES. We did for a while. We have drives periodically. We recently had one, which has increased the number of policyholders.

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