(12) A statement that the Insurance Company will, upon notification of accreditation, supply the appropriate major component commander(s) with the name, age, legal residence, citizenship, and present address of each agent who will solicit overseas; the State or States in which the agent (s) are lcensed; the date of licensing; expiration dates; and the area in which each agent will solicit.

(i) The requirement for a State 11cense may be waived on behalf of an accredited agent, provided a request is made by the Insurance Company to the appropriate overseas commander, who has been continuously residing and successfully selling life insurance in foreign areas and forfeits his eligibility for a State license, through no fault of his own, due to the operation of State law (or regulation) governing residence or domicile requirements, or requiring that the agent's company be licensed to do business in that State.

(ii) The request for a waiver shall contain the name of the State or jurisdiction which would not renew the agent's license.

(13) The following formats (except Format F), which will be supplied to all Insurance Companies applying for overseas accreditation, must be completed and attached as enclosures to the application:

Format A, "Analysis of Assets."

Format B, "Lapse Ratio and Military Business Statement."

Format C, "Operations Statement." Format D, "Insurance in Force." Format E, "Selected Financial Information."

Format F, "Experience Ratios and Analysis-Ordinary" (to be submitted to DOD only when requested).

(14) With respect only to such Insurance Companies as may desire to apply for an increase in the adjusted net gain from operations by reason of the combat credit unit, a certified statement setting forth (i) the aggregate number and amount of death claims incurred with respect to insured military personnel and included in death claims paid or incurred in the current annual statement; (ii) the aggregate number and amount of normally expected death claims for insured military personnel, according to the valuation basis of the insurer, as set forth in its annual statement with respect to the insurance affected (such expected claims

may be developed by applying median mortality factors to quinquennial attained age groups); and (iii) the aggregate number of insured military personnel and the corresponding amount of insurance in force.

(15) The enclosure of a check for $125 payable to the Treasurer of the United States in payment of the required application fee for life insurance companies for each of the first full 5-year application periods or where continuous successful operation for the last 5 years is not recorded. All others will pay a $25 fee (Part 288 of this chapter).

(16) Any explanatory or supplemental comments that will assist in evaluating the application. For example, where mergers are involved, statistics of both companies will be considered in establishing accreditation eligibility.

(17) Where the Department of Defense Contract Insurance Counselor requires detailed facts or statistics over and beyond that normally involved in accreditation processing, it will be incumbent upon the applicant to provide the DOD Contract Insurance Counselor with the necessary information by separate arrangements.

(18) A statement that the General Agent and other accredited agents are appointed consistent with the prerequisites established in subdivision (iii) of this subparagraph.

(19) A statement as to whether or not the General Agent and/or agents will be permitted to offer life insurance and security sales simultaneously.

(ii) Financial and operational criteria. (a) The Insurance Company must have demonstrated continuous successful operation in the life insurance business for a period of not less than five (5) years on December 31 of the year immediately preceding the date of filing the application; provided, however, that an Insurance Company or a division of an existing Insurance Company organized to write life insurance and affiliated or connected with an Insurance Company already writing the same and/or other lines of insurance may be granted a waiver of the otherwise mandatory 5year requirement if the Insurance Company to which it is affiliated or connected has been in business for a minimum of 20 years and has a record of financial stability and sound management. In the event of a merger, the operating result and all other financial data of both the surviving and the absorbed company will

be evaluated within the terms and intent of this part.

(b) "Continuous successful operation" in the absence of information to the contrary is assumed: Provided:

(1) The aggregate adjusted net gain from operations is positive for the 5-year period defined above, after dividends to policyholders.

(i) The adjusted net gain, for each full calendar year of such 5-year period, is the net gain from operations after dividends to policyholders and Federal income taxes (excluding tax on capital gains) and excluding capital gains and losses, as reported in the Annual Statements of the company; such gain may be increased by an expense credit unit, to be determined by the DOD, and applied to the net increase of the amount of insurance in force in the event of an unusual, sound, and bona fide increase in new business. Group insurance shall be excluded in determining such expense credit units.

(ii) The adjusted net gain may be increased by a combat credit unit, to be determined by the DOD, in conjunction with the expense credit unit hereinbefore referred to, and applied to death claims incurred by insured military personnel in excess of the expected incidence of such claims according to the valuation basis of the Insurance Company as set forth in its Annual Statement with respect to the insurance affected.

(2) The Insurance Company's ethical standards and stability in management control are satisfactory as evidenced by (i) cooperation with the DOD which includes the commanders in the field and compliance with solicitation regulations; (ii) the absence of substantiated complaints concerning operations and sales techniques and unwarranted discrimination in underwriting practices by reason of military service, rank or grade or military occupational specialty; and (iii) other relevant and evidential material.

(c) For original accreditation applications, the Insurance Company must (1) be licensed to do business in one or more of the States, a territory or the District of Columbia; (2) meet the minimum standards for initial licensing under current laws where domiciled even though doing business under statutes previously enacted; and (3) either possess paid-up capital of $500,000 and unassigned paid

up surplus (the excess of admitted assets over liabilities and capital) of $250,000 if a capital stock company, or an unassigned surplus (the excess of admitted assets over liabilities) of $750,000 if a nonstock company. If the amounts currently required by the state of domicile are larger, such amounts will govern.

(iii) General agents and agents. Unified and/or Specified Commanders will apply the principles prescribed for the Secretaries of the Military Departments. Additionally:

(a) An agent must be a U.S. citizen and possess a current State license.

NOTE: Unified or Specified Commanders may waive these requirements for indigenous personnel accredited as of the effective date of this part.

(b) General Agents and agents will represent only one accredited commercial insurance company. General Agents must serve under direct contract to and the sole control of the accredited company.

(c) An agent must have at least one (1) year of successful life insurance underwriting in the United States or its territories, generally within the five (5) years preceding the date of application, in order to be initially employed for overseas solicitation and designated as an accredited agent.

(d) After being accredited, Insurers and Insurance Carriers will be furnished letter instructions by the Department of Defense for agent accreditation procedures in overseas commands.

(e) Appropriate overseas commanders will exercise further agent control procedures as deemed necessary.

(f) An agent, once accredited in an overseas area, may not change his affiliation from the staff of one General Agent to another, unless the losing company certifies in writing that the release is without justifiable prejudice. Unified or Specified Commanders will have final authority to determine justifiable prejudice.

(g) Where the accredited Life Insurance Company's policy permits, an overseas accredited life insurance agent-if duly qualified to engage in security activities either as a registered representative of a member of the National Association of Securities Dealers or an associated person of a broker/dealer registered with the Securities and Exchange Commission only-may offer life insurance and securities for sale simultaneously. In

cases of commingled sales, the allotment of pay for the purchase of securities cannot be made to the Insurer or the Insurance Carrier.

(iv) Application for reaccreditation. As an exception to subdivision (i) (b) of this subparagraph. Insurance Companies accredited continuously in the DOD overseas program for at least the last five (5) fiscal years immediately preceding the date of filing for renewal of accreditation and whose annual statements for the pericd ending December 31 of the immediately preceding year prior to such filing reflect net gain from operations after dividends to policyholders and Federal income taxes (excluding tax on capital gains) and excluding capital gains and losses need only file a letter of application, signed by the President, Vice-President, or designated officer thereof. The application shall include the following:

(a) A statement that the Insurer meets and agrees to the qualifications stated herein, and a list of the fiscal years in which previously accredited in the DOD overseas program.

(b) A statement that the Insurer has had no reportable change in status or disclosing the change of status, if applicable, and an authenticated copy of the current annual statement filed with the insurance department of the state of domicile.

(c) One copy each of Formats B and C and a check for $25 payable to the Treasurer of the United States; where this exception is not applicable, submit Formats A through E (in duplicate) and a check for $125 payable to the Treasurer of the United States (Part 288 of this chapter).

(d) A statement as to whether or not the General Agent and/or agents will be permitted to offer life insurance and security sales simultaneously.

(v) Announcement of findings. (a) Advice of approval by the DOD upon annual applications for accreditation of Insurers and Insurance Carriers will be announced as soon as practicable to each applicant and by roster release annually in June to the appropriate overseas commander.

(b) In the event accreditation is denied, specific reasons for such findings shall be submitted to the applicant.

(1) Upon receipt of notification of an unfavorable finding, the Insurance Company shall have thirty (30) days from the receipt of such notification (for

warded and certified mail, return receipt requested) in which to request reconsideration of the original decision. Such requests must be accompanied by substantiating data or information in rebuttal of the specific reasons upon which the adverse findings are based.

(2) Action by the ASD (M&RA) on appeal is final.

(3) If the applicant is presently accredited as an Insurer, up to ninety (90) days from final action will be granted in which to close out overseas operations pertaining to the DOD.

(c) Upon receiving the annual letter of accreditation, each Insurer or Insurance Carrier will send to the applicable Unified or Specified Commander a verifiled list of agents currently accredited for overseas solicitation. Where applicable, the Insurer or Insurance Carrier will also include the names of new agents for whom original accreditation and permission to solicit on base is requested. Information copies of each of the foregoing mailings will be supplied to the Directorate, Personal Commercial Affairs, ODASD (MPP), Office of the Assistant Secretary of Defense (Manpower and Reserve Affairs), the Pentagon, Washington, D.C. 20301.

(d) Material changes affecting the corporate status and/or financial conditions of the Insurer or Insurance Carrier which may occur during the fiscal year of accreditation must be reported at the time of occurrence. Accreditation may be terminated for failure to report materials changes.

§ 276.7 Policies on general forms of

insurance.

(a) Automobile insurance. (1) General requirements: Operators or owners of privately owned vehicles allowed driving or parking privileges on military installations will comply with the requirements, if any, of the State or host nation in which the installation is located unless excused therefrom by Federal, State, or host nation law.

(2) Driving and parking privileges on military installations will be authorized by the Unified or Specified Commander and/or the Military Department involved. Where the Military Departments impose controls for on-base privately owned vehicles registration, proof of insurance coverage need only be certified to in writing by any registrant.

(3) Motor vehicle liability insurance counseling:

(1) General: Commanders will provide counseling for military personnel under their command on the purchase of motor vehicle liability insurance and publish, periodically, information on driver responsibility under State and local laws.

(ii) Importance of a safe driving record will be stressed in counseling, including the information that some insurers offer coverage with substantial savings in premiums to individuals who have removed themselves from extra risk classifications requiring premium surcharges by successfully completing driver training courses or by maintaining accidentfree driving records which can be authenticated.

(iii) Assistance in obtaining assigned risk insurance will be given to military personnel, particularly young motor vehicle operators, who are otherwise unable to obtain automobile liability insurance coverage. Military personnel should be advised that assigned risk coverage may be available at premiums less than those offered in the voluntary market by some insurers.

(iv) Courses in driver training: Installation commanders are responsible for administering an effective driver training program commensurate with personnel and budgetary limitations.

(4) Cooperation with State and local authorities:

(1) Installation commanders will cooperate with State and local officials responsible for administering State and local laws and regulations relating to the insurance and operation of motor vehicles.

(ii) Cooperation may be extended to school officials, automobile associations, Armed Forces-State Traffic Safety Workshop Program, commercial private driver training course operators, and to civic groups concerned with public highway safety.

(b) Health Insurance. (1) "Personal Plans" being offered through personal commercial solicitation must conform to the licensing requirements for both the insuring company and its agents (Part 43 of this chapter).

§ 280.2

Scope and definitions.

The military postal service includes the postal facilities of the Army, Navy, and the Air Force established under DoD Directive 5030.11, "Postal Agreement Between the Post Office Department and the Department of Defense," dated March 5, 1959.

(a) These facilities are maintained and operated for the purpose of providing complete postal services for the U.S. Armed Forces in areas where the U.S. Civil Postal Service does not operate and in any other place where the military situation requires.

(b) This service is an extension of the U.S. domestic postal system and operates in conformity with the U.S. Postal

1 Filed as part of original document; copies available at the Publications Counter. OASD(A), Pentagon, Room 3B200, or OX 52167.

Manual, published under Title 39, "Postal Service," Code of Federal Regulations; other Post Office Department instructions, and military directives. § 280.3 Policy and principles.

(a) As outlined in DoD Directive 5030.11, "Postal Agreement Between the Post Office Department and the Department of Defense," dated March 5, 1959. (Enclosure 1, sec. 1, par. 4) the establishment, operation, and use of the U.S. Military Postal Service in sovereign foreign countries "in peace-time" is contingent upon agreement with the host government, since it is customary among nations to preserve a monopoly of postal service, including postage revenue and control of customs.

(1) International agreements permitting establishment of military postal facilities usually limit the use of such facilities to the Armed Forces and certain civilian agencies and organizations serving with or related to the Armed Forces.

(2) The cost of operating military postal facilities overseas is borne by the Military Departments. Currently, that cost includes the transportation of Army and Air Post Office/Fleet Post Office (APO/FPO) mail, inter- and intra-command, between the United States and oversea areas, exclusive of territories and possessions, both by air and surface transport, commercial as well as military.

(b) The Secretaries of the Military Departments are authorized to (1) furnish postal support to the eligible individuals and agencies listed in this part in accordance with the principles specified herein, and (2) make determinations as to the eligibility of other agencies or individuals to receive postal support under such policies and principles.

(c) Postal support will be furnished only when all of the following conditions are met:

(1) Agencies and individuals requesting postal support are providing services to the U.S. Armed Forces which are essential or of substantial assistance to the accomplishment of the U.S. Govern

Filed as part of original document; copies available at the Publications Counter, OASD(A), Pentagon, Room 8B200, or OX 52167.

ment mission. Commercial activities requesting postal support must serve the U.S. Forces exclusively.

(2) The furnishing of postal support to agencies and individuals:

(i) Will not interfere with the accomplishment of the U.S. military mis

sion.

(ii) Is consistent with the terms of any agreements which the United States has entered into with the government of the nation concerned.

(iii) Will not place the privileges and immunities of the U.S. Forces in jeopardy.

(d) Postal support furnished in accordance with this part will be periodically reviewed by commanders with the purpose of adjusting such support to conform with current missions.

(e) Where more than one Military Department has postal facilities within an area, postal support policies shall be coordinated to attain uniformity of application.

(f) The following personnel and organizations are entitled to use the military postal facilities:

(1) Members and units of the U.S. Armed Forces on active duty, including the U.S. Coast Guard.

(2) U.S. citizen employees of the Department of Defense, who are serving with U.S. military activities in a foreign country, or any area, territory, or possession of the United States where no U.S. civil post office is available.

(3) U.S. citizen representatives of the American Red Cross who are attached to and accompanying U.S. Armed Forces.

(4) U.S. contractors and their U.S. citizen employees engaged in work under contract with the U.S. Government. (When postal support is not provided for in the contract, it will be furnished in accordance with the policy and principles of this part.)

(5) American dependent schools and their U.S. citizen employees, when such schools are operated from appropriated U.S. Government funds.

(6) Civilian religious representatives or religious groups visiting oversea commands in the interest of and to assist the U.S. forces, provided such persons have obtained an official invitation to travel as specified in DoD Instruction