SEMI-ANNUAL PROGRESS REPORT AND PROGRAM PLANS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-01826R000100030005-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 13
• Document Creation Date: December 9, 2016
• Document Release Date: January 5, 2000
• Sequence Number: 5
• Publication Date: January 14, 1955
• Content Type: MF

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01
.~
CRET.
14 JAN 1955
NX ORANDUM FOR:. Chief, Employee Services Division
FROM: Acting Chief, Insurance and Claims Branch
SUBJECT: Semi-annual Progress Report and Program Plans
There follows a progress report on the functions performed
by the insurance and. Claims Branch during the period 1 July 1954
through 31 December 1954. There are also attached a Program Plon
and statistical data for the Insurance and Claims Branch for the
period 1 January 1955 through 30 June 1955.
War Agencies Employees' Protective Association
1, Listed below is a summary of actions taken in the admn-
istration of the War Agencies Employees' Protective Association
(WAEPA) life insurance program during the period 1 July 1954
through 31 December 1954.
2,. During the reporting period, 1j5 new applications for
WAEPA life insurance were approved and processed. The sharp reduc-
tion in the volume of WAEPA approved and processed is directly
related to the acquisition of the new United Benefit Life insurance
Contract,
3, During, the reporting period, the Agency insurance "drives",
which included the new United Benefit Life Insurance Company (UBLIC)
plan inaugurated on 1 August 1954, resulted in the cancellation of
a significant number of then existing WAEPA policies inasmuch as
many WAEPA policy-holders transferred their insurance coverage to
the UBLIC plan. During the reporting period, 441 such cases were
cancelled in ICB records, leaving a net loss of 396 WAEPA contracts
for the period. As may be noted from previous progress reports. ,.a
significant number of policies are cancelled out during any given
period as a result of temporary insurance coverage purchased by
Agency employees to cover a period of temporary duty only. This
factor coupled with the initiation of the UBLIC program accounts
for the net loss rather than gain in WAEPA policies during the
reporting period. The gross number of WAEPA policies in effect,
as of 31 December 1954 was representing a face value of
25X9A2 approximately
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t. As noted in previous reports, the cancellation of a policy
requires approximately the same administrative handling as the
acquisition of new business, for reports must be made to the under-
writer and refund payments must be made to the insured for any
unearned (prepaid) premiums. Obviously, the transfer of coverage
from one plan to another (i.e... WAEPA to UBLIC) involves both can-
cellation of the existing policy and processing of the new applica-
tion. A tremendous number of man-hours were devoted to transactions
of this type in both the life and health insurance programs during
the reporting period.
5. During this same period, two death claims were processed
by the Branch and paid by the insurance underwriters. Inasmuch
as both deaths resulted from natural causes, accidental death
benefits were not paid in either instance. Face value settlement
amounted to $10,000. in one case and $12,000. in the other. The
fact that one death occurred while the policy coverage was $10,000o
and the other occurred after the insurance underwriter had, by
determination of the underwriting company's Board of Directors,
increased this coverage to f`12,C00. accounts for the discrepancy
in these settlements. Another claim, including a claim for acciden-
tal death benefits which was received and processed to the under-
writer during the reporting period, is not included in this report,
Insurance and Claims Branch life insurance settlement statistics
are based upon the receipt of settlement checks from the underwriting
companies. Therefore, this case will be included in the next
progress report.
6. in addition, negotiations are now in progress and have
been in progress with the WAFFA for the repayment of natural and
accidental death benefits in the case of a missing person who was
previously determined deceased and is now being restored to a
missing status. Repayment of the insurance proceeds by the bene-
ficiar"y will be made to the underwriters and the WAEPA will
reinstate the insurance policy, providing continuity of insurance
coverage,
Group Hospitalization, Incorporated
1. The annual Group Hospitalization, Inc. "drive" was conducted
from 1 June through 31 August 1954. During the reporting period,
which overlaps the GHI drive, GHI applications were received
and approved. It may be observed that although the reporting period
covers the greater portion of the annual GHI "drive", the number of
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now applications received during the current period is approximately
the same as the number of applications received during the previous
period, during which no GI-11 "drive" was conducted. The lack of a
significant increase in GHI applications during the annual "drive"
is traceable to the "drive" conducted on the new Mutual Benefit
Health and Accident Association Hospitalization Plan which overlapped
the Gill drive by one month and is for ICB administrative purposes,
still in progress,, inasmuch as Mutual applications completed in
overseas installations are still being received in Headquarters.
25X9A2 2. During the reporting period, the insurance and Claims
Branch transferred out GHI policies, leaving a gross balance
25X9A2 of NJ= GHI contracts in force as of 31 December 1954. It is to
25X9A2 be noted that of the GHI contracts which were transferred
out this figure includes approximately -contracts which were
transferred to the new Mutual Plan. It is also to be noted that,
in view of the decrease of GHI contracts below the 75% of GEHA
membership (a GHI requirement before waiting periods for maternity,
tonsillectomy and pre.-ex;-sting conditions may be waived), GHi has
informally advised this Branch that it will, at some time in the
future, -withdraw the waiver previously granted; however, no action
is being taken by GIII in view of the probable enactment of the
Government's Health insurance Plan during the present session of
Congress, Comparative statistics for this reporting period and
the previous period. are contained in the attached statistical data
sheet.
3. During informal discussions with representatives of
Group Hospitalization, incorporated, Insurance and Claims Branch
representatives queried our GHI liaison concerning the new GHI
"preferred contract" which has been publicized in recent news
accounts. ICB was advised that GHI is not now publicizing its
preferred contract for Government employees inasmuch as they feel
the new Government health program may become law in this session
of Congress. By present indications, the Government health plan
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will provide substantially the same benefits which are included
in GHI's "preferred contract". In fact, it is the feeling of
this Branch that GHI's "preferred contract" will be a companion
plan designed for commercial usage in order to compete with the
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low 1XVIM",
WAEPA and GHI applications received from overseas installations
has been insignificant. it has been interesting to observe that
over the relatively short period of five months, the United Benefit
and Mutual Plans now approximate the total policy-coverage of the
WA.EPA and GHI Plans. It is believed that the comparative statistics
contained in the attached Statistical Data sheets will prove of
interest.
Mutual Benefit Health and kccident~Associati.on Air Flight insurance
During the reporting period, =sir Might Insurance policies
were issued by the Insurance and Claims Branch. There have been
no claims under this plan during the reporting period,
Income Replacement Program
1. During the reporting period, a Preferred "isk income
Replacement Plan "uplicatin; the benefits provided under a similar
plan for the Federal Bar Association, was inaugurated. This
Preferred Risk Plan is underwritten by the ;Mutual Benefit Health
and Accident Association. While this type of coverage is desired
only by a relatively small number of Agency personnel due to the
comparatively high premium, it was believed that such a plan should
be included as a part of the over-all insurance plan for Agency
personnel.
2. This plan has not 'open widely publicized for the principal
reasons of high nrerziu.;,m cost, stringent medical requirements and,
most importantly, because this Branch felt that in view of the
work load of the hospitalization and life insurance proL;rarns, we
could not possibly conduct a "drive" for this type of insurance.
However, it is available for persons who desire it and wish to dis-
cuss eligibility and application procedures with representatives of
the insurance and Claims Branch. procedures
the reporting period, five
policies were issued. No claims were. made against this contract
during the reporting period.
Retirement ,ftctivity
1. During the reporting period, the Insurance and Claims Branch
reviewed and forwarded to the Civil Service Commission, 40 Applications
25X9A2
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for "^rvice Credit, 10 Applications for Refund of Deductions,
five Applications for Death Benefits and 12 -Applications for
Retirement.
2. In connection with its responsibilities in the retire-
ment field, the Insurance and Claims Branch has become increasingly
involved in the _:)rocessing and handling of applications for direct
refunds of retirement withholdings, particularly in connection
with the handling of disab._lity and death cases of covert personnel.
During the period covered by this report, the Branch has established
with the Ofi'ice of the General Counsel and the Agent Payroll Section
of the Finance Division, procedures for the processing of applica-
tions for the direct refund of retirement withholdings and claims
for direct payment of unpaid compensation and accrued annual leave.
Although the processing of claims for unpaid compensation is not a
formal function of the Insurn.nce and Claims Branch, the Branch has
assumed this responsibility in the general handling of disability
and death cases during the reporting x eriod. It was felt that in-
asmuch as representatives of the Insurance and Claims Branch were
handling other claim aspects of emergency cases and contacting the
employees or the next of kin involved, this function should be
handled at the same time.
Federal Emuloyees' Group Life Insurance
1. On 29 August 1954, the Federal Employees' Group Life
Insurance (FEGLI) program was placed in effect in this gency. The
Insurance and Claims Branch was given general responsibility for
the implementation and administration of this program in the .Agency
for the Office of Personnel. A considerable amount of time was
devoted to this program by Branch representatives even before
enactment of the FEGLI legislation. Zr. Branch
Chief, was designated as a consultant to Mr. Warren irons, of
the Civil Service Commission, who is charged with responsibility
for administration of this program throughout the United States
Government.
2. During the reporting period, the Insurance and Claims
Branch, working with the Executive Officer, Office of Personnel,
has had numerous meetings with members of the Retirement Division,
Civil Service Commission and with Mr. Williara McKinley, Vice-
Presideint in charge, of the Office of Federal Employees' Group
Life Insurance in New York. The purpose of these conferences has
been to establish secure procedures with the Civil Service Commis-
sion and the Office of Federal Employees' Croup Life Insurance for
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 the processing of death claims under the FEGLI Act. These conferences
were highly successful and it is believed that the majority, if not,
all of Agency claims, may be processed under the arrangements effected.
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3. During the reporting period, the insurance and Claims Fire nch
issued 2L.9 Standard Form 56, Agency Certification of Insurance Status.
During; the same period, 3 death claims under the FEGLI Act were
reviewed, processed to the OFEGLI, and settled by that Office. Of
the three claims processed, one arose out of the death of an employee
of project one --"rom and the third, a Staff Agent
25X1A6a
Missing In Action Cases
1. The insurance and Claims Branch entered the reporting period
with only one active MIA case. However, during the latter part of
the reporting period, it became apparent that two cases which had
previously been officially closed at the end of 1953 would have to
be re-opened. On the basis of the best evidence available, it had
been determined in December 1953 that two Agency employees were
presumed dead., Official action was taken in a form of presumptive
findings of death under the Missing Persons Act in these two cases.
New information received during the month of November 195)1 necessitated
the re-opening of these cases.
2. The Executive Officer, Office of Personnel, was designated
as the Agency official responsible for the administrative handling
of these two cases. This designation was made by the Director of
Central intelligence. The executive Officer, in turn, designated
a representative of the Office of the General Counsel and a
representative of the Insurance and Claims Branch to assist him in
carrying out this responsibility. During the months of November
and December, numerous high level conferences were held with
representatives of the Department of Defense, CIA officials, and
representatives of private insurance companies involved. In addi-
tion, it was anticinated that numerous contacts would have to be
made with the next of kin of the employees involved. On the basis
of a coordinated recommendation, made by the Office of Personnel,
the Director determined that these two individuals would be placed
back in a missing status, retroactive to the time of the presumptive
findings of death and would be continued in such status until more
conclusive information was received and further action could be
taken. As a result of this determination, the presumptive findings
of death issued in December 1953 will be nullified. In placing
these individuals back in a missing status, it becomes necessary for
the various parties involv~ed to correct their records and take such
action as may be necessary to consider these men in a missing
rather than a deceased status.
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3. During the reporting period, the Insurance and Claims Branch
began the tedious process of restoring these men to the missing
status in which they had been carried prior to December 1953?
Negotiations and administrative actions in furtherance of the
restoration of these men to missing status will continue through the
next reporting period. The ultimate disposition of these cases is,
of course, unknown at this time. To the best of our knowledge, these
cases present questions that are without precedent in this country.
Action which is now being taken will determine future Agency policy,
should any similar cases arise in the future, or will at least be
a definitive guide for the handling of such instances.
4. The one case which was active at the beginning of the
reporting period was still in an active status at the termination
of this period. A further review of the case will be made during
the month of January. Prior to the reporting period no information
had been received directly or indirectly from the forces holding
this individual as a prisoner. The determinations made in connec-
tion with reviews of the case had been based on information obtained
through Agency contacts and reasonable presumptions and inferences
drawn from such information. However, during the reporting period,
specifically in September of 1954, forces detaining this individual
acknowledged their detention and indicated that he had been sentenced
to life imprisonment. The ultimate action to be taken in this case
is also unknown at this time.
5. A new case was brought to the attention of the Branch in a
meeting called by the Executive Officer, Office of Personnel. On
the basis of information at the disposal of this Branch, it appears
that this individual is not entitled to the substantive benefits
of the Missing Persons Act, although the procedural requirements
of the proposed Missing Persons regulation will be followed.
Compensation and Medical Claims
1. Attached is a statistical summary of compensation and
medical claims processed by the Insurance and Claims Branch during
the period 1 July 1954 to 31 December 1954. This report is compar-
able to the summary of compensation activity prepared for previous
progress reports and is designed to reveal the extent of the claims
activity, the nature of claims processed, the ultimate method by
which these claims were processed, and the final determination made.
2. As shown in the attached summary, two hundred thirty-two
claims were handled by the Branch during this reporting period,
including forty-nine pending cases carried from the previous
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reporting period. For the purposes of this study, the filing of
Form CA-1, Employees' Notice of Injury or occupational Disease, or
an appropriate memorandum constitutes a claim.
$. One hundred eight of the total claims received were pressed
by claimants for reimbursement of medical expenses or payment of
compensation for time lost from work, or both. Of those, seventy
claims were processed with the Bureau of EmployeesV Compensation on
a classified or unclassified basis as the situation warranted, and
thirty-eight cases were processed internally. Thirty-four internal
cases were processed under the provisions of Section 5(a)(5)(C) of
Public Law 110 and the remaining four as BEC type cases.
4. Excluding the 49 pending cases which were carried from the
prior reporting period, the following comparison may be made be-
tween the present six months report and fiscal years 1953 and. 1954:
1 July 1954 -
31 Dec. 1954
Fiscal Year
1954
Fiscal Year
1953
(Excluding prior (Excluding prior
pending cases) pending cases)
BEC
39
51
40
Internal
5(a)(5)(C)
17
50
3
BEC Type
3
3
5. As can be noted above, the number of claims processed
internally has slightly decreased although the claims sent to BEC
have increased. In our previous progress reports, a forecast was
made that the number of cases processed under the provisions of
Section 5(a)(5)(C) of Public Law 110 would probably double and
possibly triple with the anticipated publication of Agency Regul.a-
the 5(a)(5) C activity remains hi . The Branch is still of the
opinion that the publication of will result in a
spectacular increase in the 5(a)(5)(C) activity.
6. Moreover, of the claims that were submitted to the Branch
for processing under the 5(a)(5)(C) program, several were ultimately
processed with the BEC. As part of the Branches administration of
these programs, claimants are fully advised of,.the benefits
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available to them under either program and often, the claimant
decides to change the nature of his claim for the purpose of ob-
taining the maximum benefit.
7. Of the forty-nine pending cases which were carried from
the previous report, twenty-two were subsequently approved, one
was rejected, three are considered inactive, and twenty-three are
still pending.
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STATISTICAL DATA
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SUMMARY OF COMPENSATION ACTIVITY
1 July 1954 - 31 December 1954
1. Compensation Activity
Total Cases . . 232
New Claims Pressed . . . . 59
New Claims Not Pressed . . . . . . . . . . . . 124
25X1C4a New Claims Referred . . . . 0
Pending Cases From Previous Summary . . . . . . 49
Total Claims Processed ? 108
Medical Expenses . . . . . . . . . . . . . 72
Compensation 8
Both . . . . 28
3. Ultimate Method of Processing
Total Claims Processed 108
BEC Cases . . 70
Internal Cases . . . . . ? 38
5 (a) (5) (C) . . . . . . . . . . . . . . 34
EEC Type . . . . . . . . . . . . . . . . . 4
4. Action Taken on Claims
Total BEC Cases . . . . . 70
Rejected . . . . . . . . . . . . . . . ? . . . . 2
Approved . . ? . 19
Pending ? 46
Inactive . . . ? ? ? ? ? . ? . ? ? ? ? ? ? ? ? ? 3
Total Internal Cases ? . 38
5(a)(5)(C) . . . . . . . . . . . . . . . . . . . 34
Rejected . . . . . . . . . . ? . . . ? . ? 1
Approved . ? . . . . . . . . . . . . . . . 12
Pending . . . . . . . . . . . . . . . . . . 21
Inactive . ? ? . . ? . ? ? ? ? . ? . ? ? ? 0
EEC Type . . . . . . . . . . . . . . . . . . . . 4
Rejected . . . . . . . . . . . . . . . . . 0
Approved . . . . . . . . . . . . . . . . . 1
Pending . . . . . . . . . . . ? . ? . . . 3
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