LIFE INSURANCE COVERAGE OF CIA EMPLOYEES FLYING ON NON-SCHEDULED AIRCRAFT WHETHER OR NOT OWNED BY OR OPERATED UNDER CONTRACT WITH CIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP68-00140R000200200009-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 5
• Document Creation Date: December 9, 2016
• Document Release Date: August 17, 2001
• Sequence Number: 9
• Publication Date: November 24, 1959
• Content Type: MF

OGC Has Reviewed
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C 0 P Y
DD/S 59-4829
OGC 9-1274(a)
24+ November 1959
MEMORANDUM FOR:
SUBJECT :
Deputy Director (Support)
Life Insurance Coverage of CIA Employees Flying on
Non-scheduled Aircraft Whether or not Owned by or
Operated Under Contract with CIA
25X1A6c
REFERENCES :
a. Dispatch from- dated 30 July 1959
?~~
25X1A6a
(Tab A
b. Memorandum to the Deputy Director (Support) from
Director of Security, dated 31 July 1959, subject:
Insurance Coverage on Non-scheduled Flights (Tab B)
c. File containing several documents between the Chief
of Communications and and the Chief, Benefits
"F
25X1A
and Services Division
)
1. PROBLEM:
Furnish guidance in order to arrive at a firm statement of policy and put
an end to discussions and correspondence concerning the above subject.
2. FACTS BEARING ON THE PROBLEM:
For the past several years countless man-hours have been devoted to
repetitive discussions relating to this subject. The most recent are
references a., b., and c. Reference a. is basically on another subject
but makes the point that CIA employees in the field are reluctant to use
flights on the grounds that some of their private commercial
Furance policies might not cover them in whole or in part. The
issue there is whether or not to direct such employees to use those
flights in preference to commercial flights. Reference b. requests
approval for the purchase, at the expense of the Agency, of Flite Plan
insurance policies for employees of the Office of Security who are "re-
quired to use non-scheduled flights or may reasonably be expected to use
such in performance of official duties." Reference c. is a general dis-
cussion of the various benefits available to CIA employees, including
the Government term insurance policies WAEPA, FEGLI and UBLIC and FECA
benefits. One of these documents, however, requests that legislation be
sought to authorize compensation to employees or their heirs in the amount
they would have received but for the non-coverage of their personal life
insurance policies.
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a. We are not concerned here with injury which does not result in death
since we are not aware of any accident insurance or hospitalization
insurance policies which contain any exclusions. Moreover, the Federal
Employee's Compensation Act provides full coverage of medical expenses
plus benefits for permanent disability incurred in the performance of
duty without any limitation whatever except willful misconduct and
drunkenness. Our only concern here is with death occurring in the course
of a flight on a non-scheduled aircraft.
b. There is some difference of opinion as to the probable number of
commercial life insurance policies held by CIA employees which exclude
either payment of the fact amount or accidental death benefits or both
and in what circumstances these exclusions apply. It is generally agreed,
however, that the precise answers to these questions cannot reasonably be
obtained since to do so would necessitate an examination of all insurance
policies held by all CIA employees. Even then the answer would not be
firm due to the variations in wording of the several policies as applied
to an infinite number of possible events.
c. The picture is clearer with respect to the Government term life
insurance policies. The many studies of this subject show that FEGLI,
WAEPA, and UBLIC pay the fact amount for death regardless of the circum-
stances of its occurrence. Accidental death benefits, however, are sub-
ject to some exclusions. In the case of FEGLI, death resulting from an
act of war is excluded. In the case of WAEPA, it is membership in a
crew of an aircraft not previously tested and approved, and in the case
of UBLIC, it is mere membership in the crew of an aircraft.
d. We are not concerned here with professional pilots and crew members.
We are informed that personnel having duties not related to flying the
plane, such as jumpers and kickers, would not be considered members of
the crew within the meaning of the WAEPA and UBLIC policies.
e. Questions have been raised as to the coverage of Government term
insurance policies with regard to a non-scheduled aircraft shot down in
the course of an overflight over either a friendly country or an Iron or
Bamboo Curtain country. In our opinion, such an act would not be an act
of war within the meaning of the FEGLI exclusion unless the aircraft were
engaged in drops or other activites at the scene of actual armed conflict.
For the purposes of this discussion, therefore, the exclusions in the
Government term insurance policies do not apply.
f. From the foregoing it appears that insofar as the Government term
insurance policies are concerned no problem arises out of using non-
scheduled aircraft for official trips. Private commercial policies may
S-E-C-R-E-T
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not be affected, and there is no realistic way of analyzing this side
of the problem. As a matter of law, if a commercial policy failed to
cover an employee who was killed while on official travel in a non-
scheduled aircraft, no cause of action against the Government would arise.
In this connection, the use of non-scheduled aircraft was considered among
other potential hazards of our business by the Insurance Task Force some
years ago. The conclusion, which we believe still to be Agency policy,
was that so-called hazardous pay would not provide for situations involving
risk. It was decided that the best insurance program that could be devised
would be made available to employees so that they could elect the coverage
they would want for situations facing them.
g. We believe there is no legal objection to a regulation that all
employees will use aircraft owned by or operated under contract with CIA
in preference to commercial flights. The Department of Defense has long
had such a regulation requiring employees if they traveled by air to use
military aircraft rather than commercial, and these regulations were in
effect prior to the acceptance of MATS by most insurance companies as
being equivalent to a scheduled airline.
h. Aside from insurance as such, the Government provides very valuable
benefits in the Federal Employees' Compensation Act for death in line of
duty which would cover death incident to official travel. For example,
an employee with a wife and two minor children is covered under FECA
in an amount equivalent to commercial life insurance policies between
$100,000 and $150,000 fact amount. The premium payable of $150,000
of insurance if taken out at age 20, would be about $3,000 per year.
If taken out at age 40, the premium would be approximately $5,000 per
year.
4. CONCLUSIONS:
We see no objection to amending to provide that
employees will use aircraft owned by or operated for CIA in preference
to commercial flights whenever feasible. We believe that the proposal
for the Agency to buy Flite Plan insurance under these circumstances
would amount to providing additional compensation for services and in
effect, therefore, be a form of hazardous pay which has been rejected
in principle by the Agency after much study in the past. We, therefore,
do not agree with this proposal. Despite efforts heretofore made, it
would seem that Agency personnel still are not sufficiently aware of their
responsibility to provide appropriate coverage for themselves and their
families out of available insurance programs and are not sufficiently aware
of the value of FECA benefits and the circumstances under which they may
apply.
/s/Lawrence R. Houston
Atta ents General Counsel
cc: D1ec, D/Pers w/o att
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NOTE FOR THE RECORD
On 11 October 1960 copies of the attached were
given to the following:
C/DPD
C/TSD
C/CA/S
C/WH/S
C/IO/S
C/F E
C/WE
C/N .h
C/AF
C,/FE
C /SR
Mr.
Mr.
Mr.
It is understood that these copies were
distributed during the Support Chiefs'
Meeting.
An Wi_tional six copies were forwarded to
Chief, DPD/ADM, on 5 January 1961, per his
phone request.
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ORIGINAL DOCUMENT MISSING PAGE(S):
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