OFFICE OF INSPECTOR GENERAL INSPECTION REPORT STUDY OF AGENCY BOARDS OF REVIEW OF THE DIRECTORATE OF ADMINISTRATION JULY 1981

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84B00890R000500020039-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 79
• Document Creation Date: December 15, 2016
• Document Release Date: August 20, 2003
• Sequence Number: 39
• Publication Date: July 1, 1981
• Content Type: REPORT

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OFFICE OF INSPECTOR GENERAL
INSPECTION REPORT
STUDY OF AGENCY BOARDS OF REVIEW
OF THE
DIRECTORATE OF ADMINISTRATION
25X1
All portions are
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STUDY OF AGENCY BOARDS OF REVIEW
CONTENTS
Page
Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Introduction ...............................1
General Observations ....................... 3
Headquarters Claims Review Board ........... 7
Headquarters Survey Review Board .......... 27
Board of Review (for Overages
and Shortages) ............................31
Overpayments Review Board ................. 39
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Chapter 1
INTRODUCTION
In March 1981 a team of inspectors was formed to study the policies and procedures
of four boards of review whose deliberations directly affect Agency employees.
- The Headquarters Claims Review Board determines the amount of
money which may be paid to an employee who suffered the loss of personal
property incident to service.
- The Headquarters Survey Review Board determines the pecuniary
liability of an employee responsible for the loss of or damage to Government
property.
- The Board of Review (for Overages and Shortages) advises the Director
of Finance on the disposition of cash overages and shortages, pecuniary
liability if appropriate, procedural changes if applicable and revisions to
regulations and handbooks when needed.
- The Overpayments Review Board determines whether an overpayment of
salary or allowances to an employee can be waived or must be refunded.
The purpose of the study was to examine the boards' policies, authorities,
composition and performance. Some senior managers expressed concern about the
continued need for the boards and their effectiveness. Others were concerned about the
frequency with which board decisions later were overturned when the employee filed a
grievance with the Office of Inspector General. Most managers were determined to be
fair to the employee within the bounds prescribed by their accountability as Government
officials. Some however, expressed personal reservations as to just how far they should
lean in giving the employees the benefit of the doubt.
During our study, we interviewed all incumbent and many former board members as
well as many Agency officials who have a direct impact on board proceedings. We talked
with employees directly affected by the board's conclusions. We consulted with officials
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in the Departments of State and Defense to learn about their policies and procedures.
Finally, we contacted representatives in the private sector to learn of their practices,
particularly in the area of employee benefits and claims related :t0 personal property.
All with whom we made contact were extremely cooperative and helpful.
Topics of overall concern are discussed in the chapter on General Observations.
Specific and detailed information on each of the boards is discussed in separate chapters.
This report offers as its only recommendation that the Deputy Director for
Administration and the Director of Personnel give serious consideration to all of the
suggestions made in this report.
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Chapter 2
GENERAL OBSERVATIONS
Need for the Boards
We asked most people with whom we spoke if there still was need for boards. The
answer was a resounding yes. We agree. The boards provide a control mechanism
through which the application of laws and Agency regulations can be completed. When
operating properly, they foster goodwill and maintain high morale by providing an
understanding forum through which an employee can protect his interests. They provide
a buffer between the immediate and personal concerns of an employee and what the
employee might consider arbitrary and capricious decisions by a manager.
The key point in review board adjudication is that every employee, no matter the
outcome of his case, should be completely satisfied that the process permitted an
objective presentation of the facts and that the board's conclusions and recommendations
follow logically from that presentation. Goodwill flows from accepted procedures
uniformly and consistently applied. Conversely, ill will flows from the reality or
perception of ill-defined procedures irregularly and inconsistently applied.
Agency regulations name those components which are to furnish review board
membership and the secretariat.* In general we find acceptable the constitution of the
boards. Most people with whom we spoke also agree that the composition of the boards
was appropriate. Some did suggest that at least one member of each board should have
overseas experience. We agree.
*Includes board chairman and full and part time assistants.
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Most members serve on a board as an additional duty to their principal position and
for no fixed term. This can result in a frequent rotation of board members. Individual
case files are preserved by the boards and the minutes of Overpayments Review Board
and Board of Review meetings are retained. But little else is available to assist the new
board member or to refresh the old. Some senior managers believe inconsistency exists
due to lack of continuity. These inconsistencies can be alleviated by having written
procedures and policies.
Procedures and Policies
In addition to prescribing membership and dollar thresholds of approval, Agency
regulations provide some general guidance as to the conduct of the boards. But specific
guidance as to the processes through which the boards take action is unclear and
limited. The boards, primarily through the secretariat, conduct either investigations or
reviews. The Overpayments Review Board and Board of Review are advisory. Their final
product is a recommendation to the Director of Finance. The chairman of the Claims
Review Board and Survey Review Board is authorized to take final action on certain
claims and to advise on others.
The boards operate informally under chairmen who can exercise considerable
power. It is the chairman who presents the case to the board. It is the chairman who
ensures that appropriate information is gathered. It is the chairman who provides most
continuity to the board.
We have no quarrel with the exercise of power by the chairman, but we believe that
not enough of his work is codified. This could be remedied by preparing written guidance
for each board in the form of a procedures manual. Each manual, which would
supplement the regulations, should in some detail describe the process to be followed in
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conducting the board's business. The manual should be specific enough to brief new
memberi on what is expected of them and ought to identify specifically the kind of
2. Shall the board operate as the keeper of the u is purse and demand
presumed negligent until proven otherwise a~s(is currently the case?
N 0
bts be -esolved automa ical
4. Should employees involved in financial shortage and overage case-.';"be
information which must be obtained before the board can make a recommendation. The
manual ought to illustrate typical as well as precedent-setting cases and he updated
periodically.
Closely related to our suggestion for procedural manuals is the need to establish
policy so that each of the boards can best balance individual and institutional equities.
This policy, which must be based on law, should be derived from senior management. It
is needed to ensure consistency of application and to avoid domination by a single
his employment r both? f
a ain Navin to absorb undue financial loss owing to the circumstances of /6YLr
ensure niihlir fiinrlc ;irenot souandered. or are they to protect the employee . Lt.
member or small group, seeking to impose personal views on the others.
Several board members said they personally have questioned the circumstances and
validity of some employees' claims. Their doubts evolved apparently after a number of
experiences with claims which appeared, at least to the board member, to be
exaggerated or the result of poor judgment by the claimant. While skepticism is an
integral part of a review board process, it should be grounded on some basis other than
possible differences in personal judgments between the claimant and the board member.
Senior management policy can be articulated in considered responses to such
questions as:
I What is the ur nse of the boards: are they control mechanisms to
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conducting the board's business. The manual should be specific enough to brief new
members on what is expected of them and ought to identify specifically the kind of
information which must be obtained before the board can make a recommendation. The
manual ought to illustrate typical as hell as) precedent-setting cases and be updated
periodically.
Closely related to our suggestion fo procedural manuals is the need to establish
policy so that each of the boards can best lance individual and institutional equities.
This policy, which must be based on law, show be derived from senior management. It
is needed to ensure consistency of applic4tio~ and to avoid domination by a single
member or small group, seeking to impose peksona\ views on the others.
Several board members said they personally hove questioned the circumstances and
validity of some employees' claims. Their doubts e{olved apparently after a number of
experiences with claims which appeared, at leasto the board member, to be
exaggerated or the result of poor judgment by the Claimant. While skepticism is an
integral of a review board
part process, it should be gfounded on some basis other than
possible differences in personal judgments between the claimant and the board member.
Senior management policy can be articulated in considered responses to such
questions as:
1. What is the purpose of the boards: are they control mechanisms to
ensure public funds are not squandered, or are they to protect the employee
against having to absorb undue financial loss owing to the circumstances of
his employment or both?
2. Shall the board operate as the keeper of the public purse and demand
strict adherence to every detail in the regulation?
3. Should reasonable doubts be resolved automatically in favor of
employee?
4. Should employees involved in financial shortage and overage cases be
presumed negligent until proven otherwise as is currently the case?
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 5. Should
&WPb(iV&aW2MSf 1Vr ~q 4DF~4B ~0{~0 0
decisions p {' so b 2r
m
c
d
employee? se restu y 1t, does this constitute bias against._ahe
e oars do not advise employees of this right, is the
Agency legally vulnerable to a private law suit?
6. Should the appeal : system ensure that a disinterested party is
automatically included in a rehearing of a case? If the same people who
originally judged the
a
The seemingly simple appeals process is a topic of major disagreernen
U,,.~V
among board members, some supervisors, and management. The vie
h _ ? , a,
s
w
on t
subject range from a desire to deny the emninlfF.
fairly, do not appeal. Some perceive this as a double standard and charge that if,JV
t
en an not get relief. Other employees;
who are less aggressive by nature and who presume the system treated thee -
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appeal to the highest level and more oft
h
The more assertive employees, some board members argue are willin to
employees are aware of their right to appeal an adverse decision.
belief that every employee has a right to appeal any decision. As a result not a
result in opposite decisions solely due to the personal nature of the claimants. We.4
is unhealthy. In a worst case scenario, two situations with identical facts cool"
-- ?'.' L~ L,ie view mat "squeaky wheels" have created an imbalance in the
system. The decision to appeal must rest with the employee. The important
thing, from an organizational point of view, is that each employee be aware of his
right to appeal, not whether he chooses to exercise his right.
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5. Should employees automatically have the right to appeal board
decisions? If some boards do not advise employees of this right, is the
Agency legally vulnerable to a private law suit?
6. Should the appeal system ensure that a disinterested party is
automatically included in a rehearing of a case? If the same people who
originally judged the case restudy it, does this constitute bias against the
employee?
Appeals
The seemingly simple appe~ls process is a topic of major disagreement
among board members, some supe visors, and management. The views on the
subject range from a desire to deny e employee any right at all to appeal to the
belief that every employee has a right to appeal any decision. As a result not all
employees are aware of their right to ap eal an adverse decision.
The more assertive employees, so a board members argue, are willing to
appeal to the highest level and more ofte than not get relief. Other employees,
who are less aggressive by nature and who presume the system treated them
fairly, do not appeal. Some perceive this as a double standard and charge that it
is unhealthy. In a worst case scenario, two situations with identical facts could
result in opposite decisions solely due to the personal nature of the claimants. We
do not share the view that "squeaky wheels" have created an imbalance in the
system. The decision to appeal must rest with the employee. The important
thing, from an organizational point of view, is that each employee be aware of his
right to appeal, not whether he chooses to exercise his right.
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Chapter 3
HEADQUARTERS CLAIMS REVIEW BOARD
Background
The Headquarters Claims Review Board (HCRB) processes and adjudicates claims
against the U.S. Government for personal property that is lost, damaged, or destroyed
during official or operational assignments.
Authorities to settle claims are authorized under the Military Personnel and
Civilian Employees Claims Act of 1964, as amended, and the Central Intelligence Agency
Act of 1949, as amended. The pertinent CIA regulation is HR ~pdated in January 25X1
1979, which sets forth the policy, responsibilities, and procedures for the processing,
investigation, review, settlement, and appeal of personal property claims. This
regulation relies heavily on Department of the Army regulation AR 27-20 for general
guidance in the settlement of claims.
The board consists of a chairman, a senior officer in the Office of Logistics; a
representative from the Directorates of Administration (DA), Operations (I)O), Science
and Technology (DS&T), National Foreign Assessment Center (NFAC), and the Office of
the Director of Central Intelligence; a claims review officer; and a part-time secretary
who sometimes assists the claims review officer. The Office of General Counsel (OG(')
unit assigned to the Office of Logistics (OL) provides legal advice to the board and its
secretariat. The claims review officer position is full-time; the chairman spends 50
percent of his time on claims work. Board members estimate their duties take about 2 to
5 percent of their time.
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he average cost of the 280 claims paid
A number of claims adjudicated in 1980 were from land 25X1
188
$2
.
,
in 1980 was
were in most cases more costly than the average.**
claims under $100 are settled by the chiefs of 25X1
t
y
Personal proper
overseas installations.*** All other claims must be submitted to the HCRB. After
investigation and review by the claimant's division or office, they are forwarded to the
HCRB with appropriate comment and recommendations.
Upon receipt, the claims review officer determines if the loss is incident to
service, that there was no negligence, and if possession of the property is reasonable and
proper under the circumstances. The claim is then evaluated and the value of goods
determined by actual replacement cost or application of a standard
appreciation /depreciation formula. If the value of an item or items exceeds certain
limitations listed in AR 27-20, the excess is disallowed. The claims review officer's
findings and recommendations are forwarded to the chairman who settles those up to
$1,000 on his own, with or without the advice of the board's legal advisors. Claims
between $1,000 and $5,000 require the approval of the chairman, after discussion with
the legal advisors, and the consent of the DDA representative and the member for the
*The HCRB figures were compiled for CY 80; igures were for
FY-80, with funds and number of cases for the last quarter based on projections.
*1 laims totaled $270,367 in CY-80. Almost $162,000 of this amount
was for claims received in CY-79 but paid in CY-80.
***The board in late April proposed that the limitation be raised to $300. We endorse
the board's proposal and further suggest that the limitation be adjusted annually for
inflation.
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claimant's directorate. Claims between $5,000 and the legal maximum of $15,000
require review by all board members and final approval by the DDA. If a board decision
is not unanimous, the majority opinion, accompanied by the dissenting view, is forwarded
to the DDA for final determination.
Appeals are submitted to the DDA, who assigns them to the claims review officer
and the board chairman for reconsideration. Their findings* are returned to the TDfA
with a recommendation for approval or denial. If the claimant is not satisfied with the
DDA's ruling, he may appeal to the Director of Central Intelligence MCI) through the
Office of Inspector General (OIG). The OIG report, with recommendations, is sent to the
DCI for final action.
The current board meets irregularly as a group. Business is generally conducted via
interoffice mail. Most claims that require action by selected members or the board as a
whole are forwarded to them with a request that they review the accompanying
documentation and approve or disapprove the claims officer's recommendation.
About 60 percent of 1980 claims were handled exclusively by the claims review
officer and the board chairman; the full board met on less than 25 percent of the claims
submitted. The remainder were settled by the chairman and appropriate board
members. The chairman schedules meetings of the board when policy or a particularly
complex claim need to be discussed. This normally works out to about one meeting a
quarter, according to board members.
*Of seven appeal cases in CY 1980, four were approved in whole or in part and
three were denied.
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Findings and Conclusions
Policy
The Agency, in accordance with the 1964 Claims Act, relies heavily on the
Department of Army guidelines in the settlement of claims. The policy for many years
has been to follow the military's lead in claims work to avoid making the Agency appear
it was setting itself apart from other government agencies. As a result, the Agency has
rigorously adhered to the Army's payment limitations on various property categories, e.g.
paintings, stereo equipment, jewelry.* The Agency exceeded these limitations in special
circumstances-=is the latest example--when they were not compatible with its
needs. Other exceptions have been made occasionally for operational or cover reasons.
The majority of board members we talked with thought it was time to take a new,
bolder tack. The Agency they said, can no longer afford to neglect its own interests.
Several members regarded a responsive claims system as an integral part of any overall
Agency program to increase morale and to maintain a first-class overseas operational
cadre. We agree.
The 1964 Claims Act, apart from requiring adherence to a few statutory
limitations, permits civilian agencies to tailor their claims systems to suit their needs.
OGC has ruled that the DCI has such authority and as noted above, the Agency has acted
unilaterally on occasion. The Department of State follows a policy that suits its
particular needs and raises category limitations independently.
The first step in structuring a claims system to Agency needs is to have a clear
operating philosophy to guide the HCRB in its deliberations. This must be done at the
*Agency, Department of State, and military personnel involved in claims work agree
current Army category limitations are too low and should be raised as soon as possible.
See Tab A "Government Liability for Personal Property Claims" for a Table of Maximum
Allowances.
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DCI-DDCI level. Claims work often involves varying emotions and subjective
judgments. Personal attitudes and lifestyle preferences sometimes clash, often
subconsciously, with organizational goals. Lacking firm guidance and direction from top
management, the philosophy of a board sometimes is established by a chairman or small
group of members. In other instances, the result is drift and uncertainty. Thus, we
suggest that the DCI and DDCI, in consultation with senior advisors, establish in writing
the operating philosophy of the HCRB. This should serve as the basis of the board's
deliberations in initial claims adjudication and in appellate actions. In establishing an
operating philosophy, the questions beginning on page 5 of Chapter 2 should be among
those considered.
The next step is to identify those policy areas the Agency wishes to alter. These
changes can be accomplished through revisions that will not make our system appreciably
different than the military and will be generally consistent with Department of State
policy. The current HCRB, rather than a special task force, is the logical choice for this
in view of the members' experience, background, and familiarity with the claims
process.
We therefore suggest that the DDA task the HCRB to review HR nd
recommend appropriate revisions. We believe any revision of HR
designate the board as the focal point for action on claims matters, with
responsibility for reviewing and recommending policy changes, alerting
senior management to existing or anticipated problems and advising senior
management when an appellate ruling constitutes a change in policy.
(This last point is discussed in more detail later in this chapter under the
section entitled Appeal Process.) The board has shied away from doing so
because it did not think it had the authority. Senior management, on the
other hand, cannot resolve problems or questions of policy that are not
brought to its attention.
clarify as precisely as possible those terms used in claims work-incident
to service, official duty, negligence, reasonable possession of property,
and multiple claims-which are subject to varying interpretations.
ensure that category limitations, the major element of a claims system,
are realistic, in step with operational and organizational needs, and
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current. The claims review officer should advise the board when category
limitations require change.
The Agency should clearly define the extent of financial protection afforded
temporary duty (TDY) travelers. We find there are differing policies among government
organizations regarding TDY. The Department of State limits coverage to events or acts
that occur during official working hours. As a result, their TDY employees are seldom
reimbursed for losses that occur during weekends, mealtimes, or after normal Embassy
working hours. The military is more liberal, reasoning they have a responsibility to any
individual serving outside his "home environment." Military claims officers normally
honor claims for theft that occur after normal duty hours, provided negligence or
improper conduct is not involved.
This issue came to our attention when Office of Security personnel complained
about TDY morale problems. They noted that claims submitted by security technicians
for watches and money stolen from hotel rooms or in street robberies were being
rejected on grounds that the losses were not incident to service. Upon checking, we
found that the claims review officer was recommending reimbursement for losses
incurred only during official working hours. We polled the chief support officers of
various components, the board members, and a cross section of Agency employees on this
issue. All of those questioned believed employees should be reimbursed for losses
incurred while on TDY, provided negligence and impropriety were not involved. Most
people, including board members, took the position that TDY travelers seldom adhere to
regular duty hours, often working for extended periods of time and during weekends, and
therefore deserve round-the-clock protection. We reported this to board members who
subsequently recommended that the Agency adopt a more liberal policy. We were
advised recently, however, that some members of the board were having second thoughts
and that the recommendation was being reconsidered.
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Given the large number of TDY assignments, the increasing crime rate throughout
the world, the difficulty in getting personnel to accept TDY missions, and the need to
maintain high morale, we suggest that the DCI establish a policy that will provide fair
and reasonable reimbursement for employees who innocently suffer financial loss during
TDY assignments.
Appeal Process
Of 143 claims settled by the HCRB in 1980, seven were appealed to the DDA.
While we find this five percent appeal rate reasonable, we believe the overall appeal
process should be improved.
Appeals are reviewed essentially by the same people who judged the original claim,
leading some to question whether the appellant can get a fair second hearing. As one
board member put it: "Most people submitting a claim for reconsideration assume the
involvement of a disinterested party, since this is the basis of the appellate process. The
only time this really happens now is when a claim reaches the OIG level." To allay
doubts about the fairness of the appeal process and to ensure that appeals are perceived
as getting maximum attention, we suggest that:
the entire board, sitting as a group, review appeals dealing with claims
under 55,000.
the DDA determine whether the board should continue to review appeals
involving more than $5,000, since all the members ruled on original
claims in this category. The designation of one or two alternate board
members whose duties would be limited to hearing appeals exceeding
$5,000 would provide the necessary "new blood" to defuse any charges of
predisposition by the regular board members.
a senior officer other than the DDA, possibly the DDCI, be named the
reviewing authority on appeals involving more than $5,000, since the
DDA is the final authority on all original claims in this category.
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The regulation states "The grounds for appeal must be set forth fully and any new
evidence submitted." We find that both claimants and those adjudicating claims can
interpret the term "new evidence" too narrowly. Some adjudicators believe that an
appeal must contain new facts or clarification of existing facts to be valid. Employees
at times are reluctant to press their claims further because they do not have any new
evidence per se. Yet we find that in many appeal cases, and particularly those that
reach the OIG level, the crux of the issue is not the facts but how those facts were
interpreted. We do not agree the regulation was meant to be applied this narrowly. We
suggest that HRI be expanded to list specific grounds for appeal and make clear that
new evidence is not the only basis for reconsideration of a claim.
The board chairman is critical of the OIG role in the appeal process. He maintains
OIG representatives take a more "humanistic" approach and concentrate on finding
loopholes in favor of the employee. The board he points out, lacks the time and
manpower for such in-depth investigations and operates within the criteria established by
the regulations. OIG inspectors he adds, frequently ignore the board's criteria or go
beyond them in arriving at their recommendations. This use of different criteria he says,
undermines the board's authority and may result in more employees appealing to the fCI
in hopes of reversing the board's decisions. He believes the board's decisions should not
be "grievable."
The inspectors use the same regulations and procedures as the board in their
investigations. The difference in conclusions-and the conclusions are not always
different or in favor of the appellant*-usually arises from interpretation of the facts or
*Five employees submitted claims appeals to the DCI during CY-80. In two
instances, the OIG uncovered new evidence which allowed the board to reverse itself in
favor of the employee. In one instance, the DDCI upheld the recommendation by the OIG
to deny the claim. In another instance, the DDCI approved the OIG recommendation but
authorized more money for the claimant. In the fifth case, the OIG agreed with the
board's denial but the DDCI authorized full payment.
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new information developed in the course of the inspector's investigation. This is
consistent with the regulation, which describes investigation as "the most important and
critical phase" of claims work and states that "the investigative process must be
sufficiently broad and thorough to ensure that the interest of both the United States and
the claimant are fully protected."
Whereas most board members agree that an employee should have the right to
appeal his case to the DCI, they have some reservations about the way this is done. The
members recognize that an inspector assigned to a claims case is able to investigate
matters in greater depth than the claims review officer and perhaps uncover new facts or
extenuating circumstances that were not available to the board. When the inspector
proposes reversing or modifying the board's decision, the members would like to meet the
inspector involved before the case is forwarded to the DCI. If the inspector's conclusions
clearly warrant a reversal, the board would amend its decision thereby obviating ICI
involvement. This has been done occasionally, but board members would like to see the
practice formalized. Even if the board did not accept the OIG findings, it could benefit
indirectly by being exposed to a different interpretation of the facts or new ones
developed by the inspectors. Conversely, a discussion with the board might bring to the
inspector's attention points which he overlooked. We agree this request is reasonable and
constructive. A representative of the Inspector General will meet with the board
chairman to make the necessary arrangements.
Several board members believe that a DCI acceptance of an OIG recommendation
that reverses or modifies a board finding often constitutes a reversal of policy rather
than a simple exception to the board's action. The board they point out, is placed in a
difficult position when it must adjudicate claims by rules which are reversed on appeal
but never changed. We suggest that when the board believes a DCI or DDA reversal of
its decision constitutes a policy change, it request a ruling from the DDA. If the DDA
concurs, the regulation should be amended promptly.
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Board Membership and Procedures
None of the members, including the chairman, are serving on, the board by choice:
the DDO representative was appointed, while others found the duty came automatically
with the positions they occupy. Several members questioned the wisdom of filling board
positions in so fixed a manner. For one thing, this practice results in a perpetual
preponderance of Directorate of Administration (DA) officers, as all but the DDO
representative are support service careerists. This trend presents no problems now,
according to one board member, because most members have overseas experience. But
with overseas opportunities for DA personnel decreasing, future appointees with support
backgrounds might not have the same breadth of experience. We agree and suggest that
directorates select future board representatives against established criteria. Such
criteria should include a willingness and interest in serving on the board, familiarity with
operational realities and overseas living conditions, common sense, and a demonstrated
capability for even-handedness and fairness. We also suggest that the DDS&T and the
D/NFAC broaden the scope of the board's experience by selecting HCRB representatives
from senior officers of their own career services.
The claims board sits infrequently as a group, a fact that evokes mixed feelings
among the board members. They appreciate that meetings are kept to a minimum. They
also believe that the present sign-off system works well in most cases, that they receive
sufficient documentation with the claims review officer's recommendation to make a
reasoned decision without the benefit of group discussion. Nevertheless, several
members worried that the board was becoming too mechanical, that they should exercise
more independent judgment and not rely so heavily on the claims review officer and
board chairman. Several thought the current sign-off system often resulted in the
members functioning more as individuals than a collegial entity.
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We also share these concerns, primarily because they could foster the impression
that the board is rubber-stamping the claims review officer's recommendations rather
than deciding cases on merit. The current sign-off system is adequate for the majority
of cases which involve simple computations applied against category payment
limitations. But we would like to see more frequent meetings in general and greater
board attention in cases that involve the more subjective areas of claims work. We
suggest that the board as a group routinely review all claims that the chairman
recommends be denied because they are not incident to service, there are indications of
negligence, possession does not appear reasonable and proper, or they do not qualify for
multiple claims. This, together with our earlier proposal of an expanded appellate
process, would foster greater interaction and permit board members to apply collective
wisdom to the most controversial areas of claims work. We hope too that by involving
the full board early-on in controversial claims, there would be fewer appeals.
We think the board would be strengthened if new members received a complete
briefing on their responsibilities, the philosophy and scope of the board, the major legal
considerations involved in claims work, and the "unwritten" rules that so often influence
the deliberations of any board. Several members indicated they received little or nothing
in the way of a formal introduction to their duties. They learned "by osmosis," and
several say they may rely too heavily on the recommendations of the claims review
officer and chairman. We suggest that board procedures and policies be codified to
ensure long-term consistency in claims adjudication.
Board-Component Coordination
Board members and component managers hold differing perceptions of the claims
system. Board members believe that the field and component managers routinely endorse
all claims because they have nothing to lose. If the claim is approved, management is
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viewed as supportive. If the claim is denied, the board rather than management is cast
as "the heavy" in the employee's eyes. Component managers counter that they approach
claims matters from a broader perspective, with operational factors, morale, and overall
equity foremost in their minds. They believe the board sometimes fails to appreciate or
fully consider the special circumstances detailed in some claims.
We are concerned that little has been done to remedy this situation, which can only
be described as counterproductive for the claims system and the Agency as a whole. This
gap in understanding should be closed; constructive dialog would seem to be the logical
solution. We suggest that the HCRB and component chiefs of support meet once or twice
a year for discussion and exchange of views on claims matters. We also suggest that
when the board plans to reject a claim, it discuss the issues with the component support
officer before making its final decision.
Annual Report
We suggest that the HCRB submit a report to the DDA at the end of each fiscal
year. The facts and figures for an annual report exist, but in scattered form. The board
keeps one set of figures for the cases it has handled. The Department of State reports
annually on funds paid to integrees who filed claims through its channels. With claims
settlements now running about half a million dollars a year, and little likelihood of this
figure decreasing measurably, a comprehensive record of claims settlement costs should
be available to management.
Training
The burden of advising overseas employees on their claims falls on support officers
and operational support assistants (OSAs). A number of people however, complained of
being given poor or inaccurate advice about entitlements and claims preparation. As a
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result, employees belatedly file claims after they return from overseas assignments and
about 40 percent of all claims filed are delayed because the original submissions are
incomplete. Several people suggested that use of a standard claims form might help
minimize preparation errors. We believe the board should encourage using the standard
claims form since the current checklist detailing the steps involved in preparing a claim
apparently is not doing the job in many instances.
The crux of the problem is inadequate training. The Office of Training and
Education's Field Administration Course for support personnel includes a briefing by the
claims review officer. But this briefing is basically an overview of the system rather
than a nuts-and-bolts primer on how to prepare a claim. Moreover, higher-graded
support officers normally do not attend the course and are expected to master the claims
system on the job. Thus, the lower-graded OSAs who administer smaller installations
receive only a limited briefing and the higher-graded officers who staff our larger posts
and serve a greater number of people get virtually no training.
We suggest that the DDA establish a program to ensure that support personnel are
adequately trained to assist overseas personnel in the preparation and submission of
claims. We also suggest making the logistics officer of every component the focal point
for claims training. He would brief outgoing support personnel on the intricacies of the
system and school them in the preparation of claims. He would also answer field queries
and update visiting support officers on claims developments.
The Department of State shortly will issue a handbook to assist administrators and
employees in submitting claims. In addition to practical advice on preparation, it will
detail many of the "unwritten" ground rules applied in adjudicating claims. The
Department claims officer said issuance of the handbook is expected to improve
consistency and compliance within the system and better educate employees on the
intricacies of claims adjudication.
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We brought this to the attention of the board chairman, noting that Agency support
personnel and employees would benefit from a similar manual. We would suggest
however, that the format be kept simple,* that the emphasis be on helping personnel
understand and interpret the more difficult subjective areas of the claims process. This
would require codifying the unwritten factors that may influence board decisions and
providing the best possible definitions of the key, and most subjective, areas in claims
adjudication-incident to service, negligence, whether possession is reasonable and proper
for the assignment, and multiple claims. Examples should be used freely for clarifi-
cation. The board chairman has tasked the claims review officer with drafting a
handbook.
Field Notices
The Department of State claims officer periodically issues field advisory notices to
employees and administrators on recent claims developments. Major insurance firms also
follow this practice, usually publishing such information in brochures or magazines sent
to policyholders. The purpose is to alert people about recent events, trends, or
extraordinary circumstances that might possibly affect a pending or future claim. The
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*We read a draft of the Department of State manual and found it too formal and stiff
to be effective. Simple language, stated in layman's terms with supporting examples, is
called for.
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Education of Employees
It is important that employees be fully aware of their entitlements under the
claims system. It is equally important that they be aware of the limitations of the
system so they can avoid disappointment and financial loss. Past efforts in employee
education have been sporadic and for the most part inadequate. As a result, many
employees, including some with years of overseas experience, either have no or only a
vague understanding of the claims system.
The board chairman, recognizing this fact, is working to correct this situation.
Central Processing Branch (CPB) of the Office of Personnel has been made the focal
point for briefing outgoing personnel. A special brochure ("Government Liability for
Personal Property Claims." Tab A) has been prepared for overseas departees which
provides highlights of the claims system and lists the major category limitations. The
claims review officer regularly addresses overseas orientation classes and is available to
brief special groups upon request. The special brochure handed to employees by (-PB
encourages people to contact the claims review officer if they have additional questions.
Despite these positive steps, there is room for improvement. We discovered that
the CPB personnel tasked with briefing outgoing personnel had not been briefed them-
selves. As a result, the quality of information available to departees has varied
considerably. We brought this to the attention of the Chief of Central Processing and
arranged for a briefing.
It is also important that an employee's spouse be familiar with the claims system.
Overseas orientation courses are a step in the right direction, but the number of
dependents who attend these briefings varies. A way to reach more spouses is through
Office of Personnel's (OP) newly formed Family and Employee Liaison Office (Fr-LO).
The OP is making every effort to publicize FELO and to encourage spouse visits. We
suggest that components also strongly encourage spouses of all employees assigned
overseas to visit the FELO for information on the claims system.
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Central Processing Branch and FELO employees believe the special HCRB brochure
on claims should be augmented by a question-answer handout focusing on the major
questions employees ask after reading the brochure. They point out that many employees
are so harassed and preoccupied with their processing that they fail to comprehend or
ignore the advice given them during formal checkout sessions. We agree.
Insurance
After talking with employees and spouses who have received briefings, it is clear to
us that many have difficulty absorbing the complexities involved in insurance. Most
people responsible for briefings shy away from offering advice because they do not
regard themselves as qualified insurance specialists. Yet advice is what most employees
want. Several commented that whereas the briefings they received alerted them to the
issue, "no one really pulled it together." They recognize the final decision on insurance is
their personal responsibility, but they want their options packaged as concisely as
possible. The booklet "International Insurance for the Federal Employee" (see Tab B)
provides a comprehensive review of the insurance picture. But many people find the
contents difficult to digest and in some instances comprehend, particularly when pressed
for time.
While acknowledging the view that an organization can only "spoon feed" employees
so much, we agree there is a need to "pull together" the basic options for employees so
they may make the wisest decision. Given the complexities, it is not enough to provide
the employee with information: it should be distilled so they can use it to their
advantage. This point was driven home to several of the inspectors who, despite years of
experience and overseas tours, learned from this study that they have unnecessarily
insured certain items or absorbed losses over the years that were legitimately
reimbursable under the claims system.
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To our knowledge no one has done a thorough analysis of the claims system and
private insurance coverage that will enable the employee to easily determine his
insurance needs. We learned that some employees need not obtain private insurance
because they are adequately protected by the provisions of the 1964 Claims Act, but that
others do indeed need additional private insurance to cover their property. We also
learned that additional or supplemental insurance can be difficult to obtain. Most
insurance companies insist on full coverage, pointing out they cannot make money
insuring only high-risk items. When companies are willing to issue a policy for less than
full value of the goods, it is often with special provisos that boost the cost or restrict
reimbursement to a percentage of the value of the goods.
We believe it is important to eliminate employee confusion in this area. We also
believe that this confusion can only be eliminated by someone familiar with insurance
matters. We therefore suggest that the Director of Personnel consider hiring an
insurance consultant to evaluate the coverage afforded by the 1964 Claims Act and
private insurance companies to determine the best set of options for employees. The
results, in clear and concise terms, should be published in a special handout for
employees being sent overseas. If entrusting this task to a private consultant is not
feasible, we suggest that the claims review officer, in coordination with CPB and FELO,
prepare a question-answer handout which focuses on major employee concerns regarding
insurance and protection of their personal possessions.
We also believe that operating components should play a greater role in ensuring
that employees-particularly those going on TDY-have been properly briefed. None of
the components we surveyed do this now. We suggest that operating components, as part
of the checkout process, routinely determine if travelers are familiar with their claims
entitlements and the extent to which their personal belongings are protected by the
government while they are on permanent or temporary assignment. Employees assigned
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to high-risk and high-crime areas should be counseled on the wisdom of leaving items
with great sentimental or monetary value in safe storage.
The Agency, Department of State and military claims personnel we interviewed
believe the majority of government employees rely totally on the protection afforded by
the 1964 Claims Act and ignore recommendations that they carry private insurance to
fully protect their goods. Apart from the complexity, confusion, and frustration involved
in selecting the right type of insurance, private insurance is expensive, particularly for
lower-graded employees. And several middle and senior officers noted that while the
cost of insurance was within their means normally, they were forced to forgo its
purchase because they were financially strapped by other transfer expenses.
We wondered if it might be possible to overcome the cost problem and provide
better overall coverage for employees' goods through an Agency-sponsored program
similar to the Agency's GEHA health plan. We were advised that the Army-Air Force
Exchange Service recently introduced a plan called COMPAC for its civilian employees.
The rates appear considerably lower than those currently offered by local international
insurance brokers. The Chief of the Army Claims Service told us that COMPAr is still
in the pilot stage. If it is successful (and the indications so far are positive), the Army
will probably institute a similar plan.
We provided the Office of Personnel with the COMPAC brochure and asked if a
similar program might be feasible for the Agency. A private insurance broker was asked
to study the matter, but his findings had not been received at the time this report was
written. We suggest that the Director of Personnel review the contractor's findings to
determine if an Agency-sponsored household effects insurance program is feasible. We
also suggest that the Office of Personnel consider coordinating with the Army Claims
Service and the Department of State on the possibility of an overall government-
sponsored program if the COMPAC pilot project proves successful.
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Option: A Restructured System
This chapter thus far has dealt with fine-tuning existing procedures to improve the
claims system. Another approach would be to have all claims processed by the board
secretariat and limit the board's function to hearing appeals. As noted earlier, the
secretariat is already responsible for computing all claims and making recommendations
on settlement. As matters now stand, the full board passes on less than 25 percent of the
cases handled by the secretariat.
Concentrating the board's role at the appellate level would provide several
benefits. First, it would cut the time involved in the processing of claims, one of the
major complaints about the current system's multi-layered structure. Second, it would
permit the board to concentrate its energies and expertise on the more controversial
cases. Third, it would strengthen the appeal process by ensuring that a disinterested
group not involved in the original settlement offer was injected into the system at the
next level. We think, and the HCRB chairman agrees, that this idea has merit and may
warrant a trial.
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Chapter 4
HEADQUARTERS SURVEY REVIEW BOARD
Background
The Headquarters Survey Review Board reviews reports of survey for the loss,
damage, or destruction of Agency owned or controlled property that involve amounts in
excess of $1,000, and in any amount where an individual has been charged with pecuniary
liability.
Authorities for the board are prescribed in HR I1Accounting for Lost,
Damaged, and Destroyed Property. The bases for the regulation are various public laws
which hold the head of each Agency responsible for establishing and maintaining
adequate systems of accounting and internal control. Adequate accounting for property
is important because public funds are invested in such resources. This investment
obligates management to be able to account for the resources and to procure, use, and
manage them properly and effectively.
The board, which has the same members as the Claims Review Board, consists of a
chairman, five members, two advisors, and a secretary. In accordance with HR
whoever occupies the Chief, Plans and Programs Staff position in the Office of Logistics,
serves as chairman. Likewise, whoever is assigned to the positions of Administrative
Officer, Office of the DCI, and Special Support Assistant to the DDA are members. The
other members are representatives of NFAC, DO, and DS&T. The two advisors are from
the Offices of General Counsel and Finance. The secretary is appointed from the Plans
and Programs Staff, Office of Logistics. The chairman spends about 5 percent of his
time on board matters; the other board members spend less. An officer in the Plans and
Programs Staff who works for the chairman spends about 10 percent of his time doing the
administrative work of the board.
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The report of survey serves two major purposes: to support removal of property
from accountable records; and to determine responsibility and pecuniary liability. They
are initiated by individuals who are responsible for property that has been lost, damaged,
or destroyed to obtain relief from responsibility or liability when other specific means of
accounting are not authorized. Reports are mandatory if there is any evidence, possible
indication, or question of negligence or unauthorized use of disposition; when normal
methods are inadequate to fix liability; and in all incidents involving loss of firearms,
explosives, pyrotechnics, ammunition, narcotics, or similar drugs, undenatured alcohol or
alcoholic beverages, regardless of whether or not pecuniary liability is admitted.
The report of survey is reviewed by the appointing/reviewing authority (an
individual authorized to appoint property accountable officers) to determine if a
surveying officer should be appointed or if the responsible person should be held
pecuniarily liable or relieved of responsibility. The appointing/reviewing authority may
approve reports of survey involving amounts up to $1,000 whether or not a surveying
officer is appointed.
The authority to appoint a surveying officer also is vested in chiefs of
overseas field installations, deputy directors, heads of independent offices, and the
operating officials listed in HR
.11 of whom may approve reports of survey of $1,000
or less where no pecuniary liability has been assessed.
A surveying officer is appointed when it is not clear that all concerned should be
relieved of responsibility or when the amount of the loss or destruction exceeds $1,000.
The appointing/reviewing authority reviews the statement of facts and recommendations
of the surveying officer and refers those cases involving amounts in excess of $1,000 and
all cases when individuals are charged with pecuniary liability to the Headquarters
Survey Review Board for further review and action.
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The board receives an average of 10 reports a year but only a few of these meet
the criteria set forth in HR or board review. The remainder are returned to the
appointing/reviewing authority for final action. The board seldom meets as a body on
any of the reports. In the two cases the board was required to review in 1980, the
recommendations made by the surveying officer and the chief of the installation were
forwarded to the individual board members and advisors for their concurrence. Although
the board is not bound by the surveying officers' recommendations, it seldom finds reason
to differ with them. The board is required to send its findings to the DDA for final
decision when there is not unanimity in its decision and when the survey involves amounts
over $5,000.
An individual held pecuniarily liable under a report of survey is advised in writing
that an appeal may be submitted within 60 days. When the liability involves $1,000 or
less, the appeal is made to the Headquarters Survey Review Board and if denied then to
the DDA. If the liability exceeds $1,000, appeals are made directly to the DDA. A final
appeal may be made to the DCI through the Inspector General.
Findings and Conclusions
The procedure for processing surveys appears to work effectively and efficiently.
Primarily the board reviews reports from field installations which must include
recommendations by the surveying officer and the chief of the installation. Although not
bound by their recommendations, the board seldom overrules the recommendations of
surveying officers and chiefs of the installations because of firsthand information
available to them. Given these circumstances the board finds it difficult to attribute
negligence or pecuniary liability in most of the cases and normally gives the individual
the benefit of the doubt.
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The board receives several reports each year of accidents involving government
automobiles. Most of these reports are returned to the sender for local resolution unless
negligence resulting in pecuniary liability is involved.
The Agency has a large amount of property in numerous locations throughout the
world. The property accountability system is active; a large number of transactions are
recorded each year. We were concerned about the possibility of property being dropped
from records without proper authority and made inquiries into this matter. We are
assured by our Audit Staff that its tests of records in the field and at Headquarters
should detect any significant abuse.
The Headquarters Survey Review Board is the least active of those we reviewed. Is
the board still necessary? We think so. Its very existence should serve as a reminder to
employees that proper care must be given to government property.
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Chapter 5
BOARD OF REVIEW
Background
The Board of Review, more popularly known as the "Board of Shortages and
Losses," was established in 1958. It recommends to the Director of Finance action for
settling cases that involve overages or shortages of Agency funds or debts due the
Agency. It also recommends changes in Agency regulations and handbooks and suggests
corrective actions to be taken to avoid future discrepancies in funds.
Authorities for settling shortage and overage cases are prescribed in
Settlement of Accounts Involving Shortages or Overages of Agency Funds. The basis for
this regulation is Public Law 80-321 dated 1 August 1947, 61 Stat. 720, 31 [ -.S.C. 82a-1
which defines the conditions under which the General Accounting Office may relieve a
person of responsibility for the physical loss or deficiency of government funds. Under
the Agency's authorities in the CIA Act of 1949, as amended, a shortage or overage of
Agency funds involving activities that requires security protection may be settled by the
Agency without regard to any other provisions of law or regulation. The Federal Claims
Collection Act of 1966 and implementing standards and regulations are the basis for Hp
Collection and Settlement of Debts Due the Agency. They provide that the head
of an agency shall attempt to collect debts due the government, but may settle debts
that do not exceed $20,000 by compromise or write-off. As in HR
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security or cover protection may be settled by the Agency unless they are required to be
turned over to the Attorney General.
Board membership, as specified in HHB n consists of representatives of the 25X1
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and Office of Security. Although not required, a representative of the DO is also a
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voting member of the board. The Office of Finance (OF) representative is the board
chairman. If a case involves a directorate or independent office that is not represented
by the above members, then an additional member from that directorate or independent
office must be present when that case is considered. Each member, other than the
chairman, has an alternate. A quorum consists of the chairman and two other members,
one of whom must be from the directorate or independent office responsible for the case
being considered. The chairman spends about ten percent of his time on board matters;
the other members two to three percent. An OF secretary assists the board and also is
secretary for the Overpayments Review Board. She devotes nearly all of her time to
these two boards. The Director of Finance estimates that five percent of his time is
spent on shortage and overage matters.
The Board of Review meets at the discretion of the chairman. Prior to each
meeting, the secretary prepares and distributes a folder for each member containing the
facts about each case to be discussed. She keeps minutes of each meeting and circulates
them to each member for approval or comment. The Director of Finance, taking into
consideration the board's findings and recommendations, makes the final decision on
cases up to $1,000 or recommends a decision for DDA consideration on cases over $1,000
up to $5,000. The component having responsibility for the case is notified in writing of
the decision and instructed to so notify the employee and to collect in cases where the
employee was held pecuniarily liable.
Most cases reviewed by the board concern overages or shortages of cash at nn
field stations and lost or stolen Agency funds. The responsibilities of cash custodians are
clearly spelled out in Agency regulations, as are the procedures for handling and
accounting for funds. The board's primary function is to review the cases referred to it
by the Director of Finance and determine whether:
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the responsible individual was acting in the discharge of his or her official duties
when the shortage or overage occurred; or
the shortage or overage occurred because of the act or omission of a subordinate
of the responsible individual; and
there was negligence or fault on the part of the responsible individual.
the responsible individual should be held pecuniarily liable for or granted relief
from any shortage charged to him or her.
the case involves activities which in the national interest require security or
cover protection.
the case presents a question as to violation of the criminal provisions of the
United States Code.
When the number of cash transactions the Agency makes each day and the problems
in paying agents in unusual jobs in unusual places are considered, the Agency's record on
shortages and losses of its funds is remarkably good. Losses both in dollar amounts and
percentage amounts are only a small fraction of the total funds handled. At the end of
12 shortage cases totaling $13,080* that year, and the employee was held pecuniarily
liable in four of them. In the first half of FY 81, the board has adjudicated 13** cases
totaling $4,079. Eleven cases totaling $3,352 were adjudicated in FY 79 and 15 cases
totaling $6,296 in FY 78. About 80 percent of the shortage cases are for amounts less
than $500 and about 50 percent are less than $300. Almost all recent overage cases have
been less than $300.
*Includes one case for $4,762 (Africa Division) and one for $3,000
0
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**This is a higher than normal caseload that accumulated during a three month
underlap of board chairmen when the former retired in 1980.
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Findings and Conclusions
Operations Support Assistants
The majority of the board's cases in recent years involve operations Support
Assistants (OSAs), primarily in the Africa
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B&F officials in these divisions attribute this to the fact that the more competent OSAs
do not apply for assignments to a relatively large number of undesirable posts or where
benefits associated with overseas service are not available.
The OSA is the administrative backbone of the smallerl foreign field
stations and bases. The job calls for a person who is proficient in financial accounting,
property management and staff communications; who can handle logistics, personnel and
security activities; who can do secretarial work; who understands DO operations; who in
most stations and bases must understand the cover organizations' administrative
procedures; and who on occasion, especially at very small stations or bases, may be
acting COS or COB. The OSA position typically is graded at the GS-07 and GS-08 level,
although a few hold grades above and below this level.
We talked with many Headquarters employees whose jobs relate in varying degrees
to the work done by OSAs: Office of Finance personnel; DO area division B&F officers;
Audit Staff auditors; DA management; past and present board members; and OT&E Field
Administration Course instructors. The common theme we heard was that OSAs have an
often unique and vital role in station or base activities and that they are underpaid for
their responsibilities. We also heard of the difficulty in attracting and retaining
competent personnel to fill OSA positions.
The Office of Personnel and DO management are aware of the concerns about
OSAs and are working to make improvements. Position Management and Compensation
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Division (PMCD) of the Office of Personnel recently reviewed OSA positions and
concluded that many are undergraded. A recently drafted classification standard for
OSA positions, if approved, will establish grades generally at the GS-09 level with some
at GS-08. We endorse this standard and encourage its implementation on a timely basis.
The existing concept of having a "rover" OSA at the GS-11 level to assist in opening new
stations or bases or to fill in as needed provides additional growth possibilities for those
who choose this career path. In the future, associating the senior levels of OSA work
with the MG (support generalist) career service may provide an additional path from
clerical to professional ranks.
Cash Shortages or Overages
Most persons we talked with believe that cash discrepancies may be attributed to
lack of adequate training for cash custodians and inadquate attention to prescribed
procedures by supervisors. Several steps have been taken or are being planned to reduce
these discrepancies.
- The Field Administration Course was extended from three to four weeks
in September 1980 with three days being added to the financial portion of
the course. This course is well run and provides excellent training for
OSAs. The instructors' evaluation of the students is an important
consideration in selecting and assigning OSAs. We suggest that no new
OSA be given cash custodial responsibilities who has not taken and passed
this course.
- Each DO area division gives the outgoing OSA some training within the
division, but the amount varies and is sometimes dependent on the
availability of time. There have been OSAs who have failed the Field
Administration Course and whose budget and fiscal (B&F) officers have
recommended against a field assignment, but they were sent anyway
because no one else was available or would accept the assignment. In at
least two cases, cash discrepancies occurred. We suggest that area
division B&F officers certify to the Director of Finance the suitability of
an OSA to be a cash custodian.
- The Office of Finance is proposing revisions to regulations and procedures
relating to cash custody that include: holding the chief of station (COS),
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base (COB) or installation pecuniarily liable in some cases; giving the
Director of Finance approval authority over nominees for cash custodian;
and requiring custodians to certify in writing that they understand their
duties and responsibilities. We endorse these changes and encourage their
prompt promulgation.
- OF and area division B&F officers periodically send messages to the field
reminding custodians of the importance of adhering to prescribed
procedures and supervisors of their responsibilities in cash management.
The latter has been necessary because of instances in which COSs and
COBs had violated required procedures. In March 1981 the TDCI sent a
message to all employees on the responsibility of low and mid-level
managers to examine claims, vouchers, etc. that they approve. We
suggest that senior managers ensure that the Performance Appraisal
Report of employees and supervisors (including COSs and COBs)
responsible for cash management include a statement on how well that
responsibility is carried out.
- The board chairman is seeking ways to automate records of board
activities. One objective is to determine whether the subject of a case
has been involved in previous discrepancies.
Charter, Procedures and Definition of Terms
We found that the current board members' diverse backgrounds and perspectives
provide a balance to the adjudication of cases. What we found missing, however, are
written philosophies, policies, guidelines for decision making, and definitions of terms to
ensure consistency in rulings from year to year. Without these, the board can easily take
on the character of its most dominant member or make decisions based primarily on
personal experience. As members change so can the consistency and continuity of board
decisions. We suggest that the Deputy Director for Administration take the action
necessary to have a charter for the Board of Review written and to establish procedures,
philosophies, and definition of terms for board use. These should be added to the
appropriate Agency regulations and handbooks and made available to all employees.
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Headquarters Writeoff Authority
Existing regulations authorize chiefs of station and base to write off up to $100 in
accounts other than their own. No comparable authority exists for Headquarters
operating officials-all shortages and overages must be reported to the Director of
Finance who, in turn, assigns them to the Board of Review. Senior officials in the Office
of Finance believe that Headquarters operating officials should have the same writeoff
authority as chiefs of station and base and we agree. We suggest that the Director of
o authorize Headquarters operating officials to settle shortage
and overage cases for amounts through $100 in accounts other than their own.
Regulation and Handbook Changes
We believe a few changes to Agency regulations and handbooks will clarify and
improve the process of administering shortage and overage cases.
- Agency regulations distinguish between the procedures to follow when
there is a loss of funds advanced for operational purposes (e.g., safehouse
rent) and a loss of funds advanced for personal expenses (e.g., travel).
Missing operational funds are considered by the Board of Review whereas
missing funds advanced for personal expenses are considered by the
Headquarters Claims Review Board. A case in which both types of funds
are missing in the same incident, e.g., a robbery, would be reviewed b
both boards. We believe that the definition of "Agency funds" in HR
=is adequate to include funds advanced for operational and persona
expenses. When a loss occurs in a single incident, it should be considered
by the Board of Review. We suggest that the Director of Finance revise
regulations to have "Agency funds" lost, stolen or missing in a single
incident settled by the Board of Review.
- Most Board of Review cases involve the DO and that directorate does
have a voting member on the board. We believe HHB should be
revised to include a DO representative as a permanent boar m mber. We
suggest that the Director of Finance revise HHB to provide for a DO
representative as a permanent member of the Board o Review.
HHB requires the Director of Finance or Deputy Director for
Operations to complete action on each report of shortage or overage
(except those already settled by a COS or COB) within 30 days of receipt
of the report. After initially reviewing a case it is often necessary for the
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board to request additional information from the field, to call a witness or
principal before the board or to task the Office of Security with
investigative work. Temporary unavailability of the principals involved
can add time to this process. While we believe the Director of Finance or
Deputy Director for Operations should complete their action in a timely
manner, the 30-day requirement in most cases is unrealistic. We suggest
that the Director of Finance revise HHBIIto increase to 90 days the
time for completing action on each report of shortage or overage unless
extenuating circumstances indicate additional time should be permitted.
The original regulation which established the Board of Review in 1958 was
revised in 1959 to state, "If no further facts are available for
consideration, the individual concerned may appeal to the Director of
Central Intellig hrough the Inspector General." This regulation was
replaced by HR in which no mention is made of the employee's ri ht
to appeal. We suggest that the Director of Finance revise HR o
grant employees found pecuniarily liable the right to appeal the decision
to the DCI through the Inspector General. Further, the communication
notifying the employee of his liability should cite the regulation that
describes the appeal process.
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Chapter 6
OVERPAYMENTS REVIEW BOARD
Background
The Overpayments Review Board, established in 1970, investigates employee
requests for waiver of cash refunds due the Agency because of administrative errors
made in pay or allowances. The requests are made to the Director of Finance who refers
them to the board for a recommendation of approval or disapproval. The board tries to
establish the reason and circumstances for each erroneous payment, the date it was
discovered, and corrective action required to prevent similar erroneous payments. The
board determines whether there is any indication of fraud, misrepresentation, fault, or
lack of good faith on the part of the employee or any other person having an interest in
obtaining a waiver.
Authorities and procedures for settling overpayment cases are prescribed in HR F
^ Waiver of Claims for Erroneous Payments. The bases for the regulation is 5 i J. S. r'.
5584(a) and Public Laws 90-616 and 92-453. These laws provide that a claim of the
United States against an employee of an executive agency arising out of an erroneous
payment of pay or allowances may be waived in whole or in part if the collection of
which would be against equity and good conscience and not to the best interest of the
United States.
Board membership consists of one representative each of the Director of Finance,
General Counsel, Director of Personnel, and Chief, Audit Staff. The representative of
the Director of Finance is designated chairman; a secretary from the Office of Finance
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is named by the chairman. The function of the board is to investigate the cause of each
overpayment and to ensure that the facts considered in each case meet the criteria
established by the Comptroller General of the United States and the General Accounting
Office (GAO). The chairman spends about ten percent of his time on board matters; the
other members two to three percent. The secretary, who also is secretary to the Board
of Review, devotes nearly all her time to both boards. The Director of Finance
estimates that less than five percent of his time is spent on board matters.
The Agency and the GAO signed a Memorandum of Understanding in March 1977
which governs the method by which claims against Agency employees for erroneous
payments of pay would be waived and the results reported to GAO. For claims of
erroneous payments of pay and allowances made from non-DCI - certified funds, the
Director of Finance may waive a claim which does not exceed $500. If the identity of
the employee can be revealed and the facts disclosed without revealing classified
matters or sources and methods, the Agency will follow established procedures and refer
cases which exceed $500 to the GAO for resolution. If disclosure of the employee or
facts of the case would disclose intelligence sources and methods, the Agency will use a
John Doe numbering system to refer the case to GAO (in fact, all cases referred to GAF
use a John Doe numbering system). When the overpayment was made from DC'I -
certified funds, the Agency will dispose of requests for waiver on the special authority of
the DCI without recourse to the GAO regardless of amount. The DCI in turn delegated
authority to waive a claim for recovery aggregating not more than $500 to the Director
of Finance, from $500 to $5,000 to the DDA and for amounts which exceed $5,000 to the
DDCI.
The Overpayments Review Board meets at the discretion of the chairman. Prior to
each meeting, the secretary prepares and distributes a folder for each member
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containing the facts about the cases to be discussed. She keeps minutes of each meeting
and circulates them to each member for comment or approval. Recommendations are
made to the Director of Finance who acts in accordance with the previously described
agreement with the GAO. The employee is notified of the decision through his
component. An annual report of the activities of the board is submitted to Agency
management.
Over the past several years the board has received an average of 23 new cases a
year. There appears to be no pattern to the situations which led to the overpayment. A
sampling of the reasons for the overpayment would include: salary based on wrong grade
or step; insurance premiums not withheld; erroneous computations; and allowances paid
in excess of amount authorized.
In examining the facts in each case, the board places great emphasis on whether or
not the employee could or should have known about the overpayment and what was done
about it. According to annual reports of board actions for the past four years, an
average of 21 cases were settled with repayment waived or partially waived in an
average of 17 cases totaling about $20,000 and denied in an average of four cases
totaling $9,000. The board tends to accept an employee's statement that he did not know
he was overpaid. There were 14 cases in process at the end of FY 1980.
Findings and Conclusions
The board is effective in getting its job done. There was a backlog of cases for a
time after the former chairman retired and before a new chairman was named but,
according to the secretary of the board, the backlog is cleared.
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Incomplete Information
Office of Finance personnel report that incomplete information and delays in
receiving information contribute to the overpayments problem. Information must be
furnished by the component and the Office of Personnel. For example, dates of arrival
and departure from a field station are needed to compute various allowances
accurately. To the extent that these dates are not available, the employee may he
underpaid or overpaid. The problem of incomplete information is one that can be
alleviated by better communications among concerned components. The Office of
Finance is making an effort in this area but faces a formidable task in trying to maintain
current information on the whereabouts and entitlements of thousands of employees so
that each may receive a correct payment on a timely basis.
Most field stations electronically report time and attendance data each pay period
via the Electronic Time and Attendance Report System (ETAR.S). The procedure works
well and basic data is transmitted and acted upon promptly. We suggest that the
Director of Finance explore the possibility of modifying ETARS so that other data
pertinent to pay and allowances also can be transmitted electronically for timely action.
Training
Payroll technicians contribute to the problem of incorrect payments of pay and
allowances. Most of the technicians are inexperienced and many are working at their
first full-time job. Office of Finance officials estimate that about twelve months on the
job training is required before a technician becomes adept at payroll work.
Unfortunately there is an annual turnover rate of about 70-75% for these relatively low-
graded employees. People leave because they are shopping for a better job, become
pregnant (most technicians are female), or find themselves unsuited for payroll work.
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Although management recognizes that training is important, Compensation Division
(the component within office of Finance responsible for administering pay and
allowances) does not have a designated training officer. Because of the stresses resulting
from high turnover rate of personnel, the need to do much of the work manually and the
deadlines associated with a two-week pay cycle, there is little opportunity for training.
Yet the absence of training contributes to the stress as new procedures and increasing
requirements to provide information bring about additional problems. For example the
procedures which allows employees to work 80 hours flexitime work periods create
problems which need to be overcome. Employees need to be trained to cope with new
requirements. We suggest that the Director of Finance establish a training program in
Compensation Division and appoint a training officer.
Charter, Procedures and Definition of Terms
As with the Board of Review, we found that the current board member's diverse
backgrounds and perspectives provide an agreeable balance to arrive at good
recommendations. Again we found missing the written philosophies, policies, guidelines
to assist in the decision making process, and definition of terms to ensure consistency in
rulings from year to year. Without these, the board can take on the character of its
dominant member or make decisions based on personal experience. As members change
so can the consistency and continuity of board decisions. We repeat our suggestion that
the Deputy Director for Administration take the action necessary to have a charter for
the Overpayments Review Board written and to establish procedures, philosophies, and
definition of terms for board use. These should be added to the appropriate Agency
regulations and handbooks and made available to all employees.
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Appeals
The regulations do not provide for an appeals process in the event an employee is
dissatisfied with the recommendation of the board and the decisions based on these
recommendations. On occasion, employees have appealed a denial of a request for
waiver of the overpayment. The same board then meets to reconsider its
recommendation but if no additional information is provided, the original
recommendation stands.
Personnel who deal with overpayments have mixed views about whether there
should be an appeals process. Some believe that every person should be advised of his
right to appeal. Others believe that board recommendations and Office of Finance
decisions should stand. One official was concerned that an employee could have use of
government funds for an extended period merely by seeking a waiver or appealing an
obviously erroneous overpayment. For the reasons discussed in Chapter 2 on General
Observations and expanded upon in Chapter 3 on the Claims Review Board, we suggest
that each employee be advised of his opportunity to request a waiver of the overpayment
and of the appeal process if the waiver is denied. We are confident that appropriate
terminology can be developed for the regulations which will obviate most frivolous
requests.
Time and Attendance
The Time and Attendance (T&A) reporting system, one of the most important fiscal
and personnel activities in the Agency, is a prime source of payroll discrepancies and
erroneous payments. Most problems stem from assigning responsibility for administering
this complex system to clerical personnel who often lack the aptitude, experience, and
training to handle the work. There is also the Agency's short payroll cycle, which clashes
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occasionally with operational deadlines. The result is projected figures which lead to
overpayments and confusing financial adjustments. Supervisors can be lax in overseeing
the final product and some create errors by incorrectly advising the T&A clerks about
proper procedures.
Management is attempting to improve the situation. Procedures now require
supervisors to certify all T&A cards and to increase supervisory responsibility for the
accuracy of the information. T&A workshops are held regularly for employees to provide
a basic understanding of the system and some familiarity with the 19 different reporting
procedures.
In addition to these fine-tuning measures, the Offices of Finance and nata
Processing have commissioned a study team to look into ways to improve the payroll
system. The team is expected to complete its work in October 1981.
Systemic Overpayments
The foregoing discussion centered on the work of the board. We found however
that there are 300-400 cases of overpayments a year most of which are resolved within
the Office of Finance and do not involve the board or the General Accounting Office.
Many are predictable but because of peculiarities of the system are difficult if not
impossible to avoid.
Retirement and Disability System (CIARDS) and military service time is used to
determine their annuity. Since 1 January 1957 military personnel have been
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subject to Social Security coverage. Credit for such military service is allowed
during the time the annuitant is not eligible for Social Security. The annuity is
recomputed to exclude credit for the post-1956 military service if the annuitant
at age 62 becomes eligible for Social Security after retirement. As an annuitant
approaches age 62, a determination must be made as to his eligibility for Social
Security benefits. Verification is initiated by CIARDS six months in advance of
the annuitant's 62nd birthday, but frequently there are undue delays in receiving a
response from the Social Security Administration (SSA). Many local SSA offices
will not complete the verification form until the annuitant applies for the benefit
at age 62. Only thereafter will SSA process the verification form which delays
receipt of the official documents by CIARDS to authorize the adjustment in
annuity on a timely basis. This results in an overpayment which the annuitant
upon request usually refunds. The annuitant however, may request waiver of the
recovery of the overpayments. Such waiver may be granted when, in the judgment
of the Director, the individual receiving the payment is without fault and recovery
would be against equity and good conscience. If the amount due does not exceed
$500, the Director of Finance (by delegation) may waive repayment; otherwise the
Overpayments Review Board process is implemented. Since its inception in 1964,
CIARDS has had four overpayment cases in this category before the
Overpayments Review Board; in three cases the waiver was not granted and
repayment made by the annuitant; one case is still pending. Currently there are
about 100 CIARDS annuitants who have post-1956 military service time included
in their annuities. Between 1981 and 2003 these cases will require verification of
eligibility for Social Security. With an ever increasing age of the annuitant
population, CIARDS is now averaging about eight verification requests per year.
Although the Office of Personnel has taken steps to avoid overpayments,
continued slow responses from the Social Security Administration make it unlikely
that the problem will be totally eliminated.
- Overpayments also result when dependents of deceased annuitants become
ineligible for benefits. This is particularly true of the 18 to 22 year old
dependents who, according to the law, must be in school for their benefits to
continue. Procedures require a certification of attendance from the school. But
the schools generally will not certify in advance that a student is there.
According to prescribed procedures, if the surviving parent reports that the child
intends to go to school in September, monthly payments may continue through the
summer months. Frequently the child does not return to school and a refund must
be obtained.
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Government Liability for
Personal
Property
Claims
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1. Claim Authorization Department of Labor is used to appreciate the claimed
Personal property claims are authorized under the Military
Personnel and Civilian Employees Claims Act of 1964, as
amended.
2. Regulations
Your office administrative section can identify the appro-
priate regulation which sets forth the concepts used in
establishing the value of a valid personal property loss.
This regulation should be read by all personnel processing
for an overseas or domestic assignment to better ac-
quaint themselves with personal property claims proce-
dures. For your convenience. some areas of the regulation
are highlighted below.
3. Valid Claims
For a claim to be valid, the loss, damage, or destruction
must have occurred:
a incident to service-in the performance of official
duty;
b negligence must not be involved; and
c possession or ownership of the property must be ad-
judged to have been reasonable, useful, or proper.
Department of Army Regulation AR 27-20 is used as a
general guideline by settlement authorities in adjudicating
ciairns. The Consumer Price Index pubiished by the U.S.
items to reflect current replacement costs. The depreci-
ation guide contained in AR 27-20 is then used to estab-
lish the value of the items lost according to the number of
years used to provide fair reimbursement to the claimant
and a reasonable payment by the Government.
4. Maximum Payment
The law establishes the maximum amount payable for a
valid claim at $15,000; however, there is also a category
limitation on specific items as noted in the Table of Maxi-
mum Allowances which is listed in the center of this
pamphlet.
Immediate relief to claimants suffering a substantial per-
sonal property loss is provided for under the Advance
Payments section of the regulation. A claimant's request
for an advance should be made in writing and submitted
through administrative channels. This request must in-
clude a statement agreeing to refund any or all of the ad-
vance payment to conform with the final settlement
amount.
6. Questions
Any questions may be dsccted to your administrative of-
ficer or the claims officer.
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 A "rbNee4 (tar 'a a 1 8
Nc,:? Although l,-:~,ure to carry insurance does not affect
;n~ val,dity of a ciaim, it is advisable to insure items of
eatraord:nan tn,gh vuluc! value since, as noted below,
there are monetary Imitations for certain items and
categories.
500.00 per item
3.000.00 per claim
Hi-Fi and Stereo Systems
and Components (including
Tape Recorders) .
Costume Jewelry l$100.00
or less per item)
Lost in transit
Lost under other cir-
cumstances
Automobiles and all motor
vehicles including motor cy-
cles. Does not include mobile
homes. Does not apply to
automobiles when vehicle is
shipped pursuant to orders.
(A maximum payment limita-
tion of $10,000 is applicable
to motor vehicies, mobile
recreational vehicles, etc.,
damaged, destroyed, or
missing during Government
authorized transportation) 1,000.00 per claim
Bed Spreads (Heirloom or
crocheted) _ .
Boating Equipment and Sup-
plies
Books
Cameras, Photographic
Eouipment (and extra
lenses)
Chess Sets
China (fine)
To be fine china. a five-piece
place setting must have a
value of at least $50.00
Clocks (grandfather &
grandmother)
Clothing
Birth through age 6
Age 7 through age 14
Age 15 through and including
age 17
Ace 18 and over
Sketching
Electrical, Gas and other
Major Appliances
Firearms
Subject to maximums for
collections
Furniture
Sectional Sofa
Jewelry other than costume
(over $100.00 per item)
P4S
$ 750.00 per item
1,500.00 per claim
1,500.00 per combination
of hobbies or a
family hobby
500.00 per claim
1,000.00 'per claim
750.00 per claim for
handmade or
manufactured cro-
cheted spreads,
quilts, or
tablecloths.
250.00 per item
500.00 per claim
Musical Instruments
Painos, Organs, and Player
Pianos ...............
1,800.00 per claim
All other musical in-
struments ..... ....................
350.00 per item
700.00 per claim
$ 350.00 per claim
1,500.00 per claim
350.00 per person
750.00 per person
1,500.00 per person
2,500.00 per person
Objects of Art, Sculpture,
Figurines, etc. (Does not in-
clude paintings)
Paintings and Pictures
Photographic Equipment... Pipes (smoking) including
pouches
Professional Equipment
Dental and Medical
Records (other than in Auto-
mobiles) collection
Maximum ........ ......
350.00 per item
1,000.00 per claim
350.00 per item
1,250.00 per claim
350.00 per item
1.500.00 per claim
25.00 per item
$1.000.00 per claim
1,500.00 per family
collection
1,500.00 for either com-
Rugs
3,000.00 per claim
bination of col-
lections or collec-
Schrank (German cabinet or
tions of whole
closet)
1,500.00 per claim
family
Screens, Fireplace; Room
1,500.00 per claim
Dividers; etc.
350.00 per item
750.00 per claim
Silverware (Sterling-does
not include silverplate)
3,000.00 per claim
for aft sterling silver
750.00 per item
Sporting Equipment and
75.00 each; maximum of
Supplies .. __. ____..
1,500.00 per claim
four
(Cost of materials only)
350.00 per item
Tools (all types) . _
1,000.00 per claim
1,500.00 per claim
Tools shipped in Auto-
100.00 non-perishable in
mobile .. ............... ...........
100.00 per claim
shipment
Toys
500.00 per claim
1,000.00 per item
Watches
150.00 per item
1.500.00 per complete item
250.00 per claim
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Wigs 500.00 per claim
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This pamphlet is provided for your general information;
however, regulations and allowances are subject to
change.
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IATIONALINSURANCEINTERNATIONALINSURANCEZ
Intbrnati'O
z
C
IATIONALINSURANCEINTERNATIONALINSURANCE
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W
Written for the Federal Service
by
H. Colton Montague
Illustrated By
James A. Byrne
We gratefully acknowledge the constructive suggestions made by the following organizations during the
course of text preparation:
American Institute of Marine Underwriters
Insurance Information Institute
Insurance Services Office
International Insurance Advisory Council of the Chamber of Commerce of the United States
American Foreign Insurance Association
American International Underwriters Corporation
International Insurance Underwriters, Inc.
Clements & Company
Reed Shaw Stenhouse, Inc.
Edward J. Walsh & Son
March 1974
(Revised May 1979)
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Page
The Federal Employee's Need for International insurance Protection .............................. I
The Pattern of Risks (diagram) ............................................................................................. 2
Risks Related to Foreign Travel or Residence ...................................................................... 3
International Insurance for Personal Property (excluding automobiles) ............................ . 4
Marine Automobile Insurance ................................................................................................ 8
General Average and Salvage ................................................................................................ 10
International Automobile Insurance ...................................................................................... 12
Personal Liability-An Interrelated Domestic/ International Risk ..................................... 14
Insurance Purchased From Foreign Companies or Underwriters ....................................... 15
Claims ....................................................................................................................................... 16
Summary of Basic Policies-International Personal Property Insurance ............................ 17
Reminder .................................................................................................................... Back Cover
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The Federal Employee's Need
for International Insurance
Employees on overseas assignments
have frequently sustained loss of or
damage to household effects, auto-
mobiles, and other personal belongings.
Recognizing this the Government has
provided certain compensations for
such losses or damages which are inci-
dent to an employee's Government serv-
ice. This has been done through the
Military Personnel and Civilian Em-
ployees Claims Act of 1964, as amend-.
ed. The act, however, was not designed
to repay all claims of loss or damage
and is, therefore, subject to a number of
limitations. For example, the maximum
amount payable under this law is
$15,000, even though the loss or dam-
age may be greater than this amount.*
In addition compensation may not be
paid for loss or damage to easily pilfera-
ble articles or small articles of substan-
tial value which are usually worn or
carried (such as jewelry, cameras,
watches, and binoculars), when such
articles are shipped with household
goods or unaccompanied baggage. Fur-
ther, the act does not provide coverage
while the employee is traveling without
orders (vacation, etc.), or for loss re-
sulting from the negligent or wrongful
act of the claimant or his agent, family
member, or private employee. The act
also takes into account only that prop-
erty the possession of which is deter-
mined to be reasonable, useful or prop-
er under the circumstances. Maximum
Proposed legislation under current consider-
ation would increase the maximum amount pay-
able throughout the Federal service for both
civilian and military personnel to $25,000.
amounts allowable have been estab-
lished for specific categories and types
of property. Consideration must be
given also to the fact that depreciation
is a factor in determining amounts to
which one may be entitled for loss of or
damage to personal property.
Recognizing the various limitations
under the Military Personnel and Civil-
ian Employees Claims Act of 1964, as
amended, individuals are encouraged to
purchase commercial insurance in types
and amounts to meet their insurance
needs. Complete details concerning
available types of insurance and rates
may be obtained from insurance agents
and brokers who have had wide experi-
ence in overseas insurance programs or'
from underwriters with overseas
divisions.
The various types of DOMESTIC.insur-
ance policies normally purchased by
individuals seldom extend protection to
the insured beyond the continental
limits of the United States. New or
amended policies providing coverage in
foreign countries are, therefore, essen-
tial if the individual desires continued
insurance protection while traveling
and residing abroad.
INTERNATIONAL insurance protection
must be purchased from agents, brokers
or underwriters who offer insurance
protection on a worldwide basis. Com-
panies of this type usually maintain
field offices, representatives, and claim
adjustors in major foreign countries. In
smaller countries where it is not eco-
nomical to maintain representation,
claims of policyholders are usually
handled effectively by airmail
correspondence.
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Physical Risks
Loss of Damage from Fire,
Transport, Handling, Natural
Hazards, Accidents,' Criminal and
Malicious Acts, Etc.
Legal Risks
legal Suits, Claims or Actions Directed
against the Individual as a Consequence of
his Personal Acts (or those of his depen-
dents) and Assessments Arising from Appli-
cation of Maritime Law (General Average
& Salvage).
PERSONAL
FINANCIAL
RESOURCES
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Risks Related to Foreign
Travel or Residence
The individual seeking insurance pro-
tection against adversities which could
directly or indirectly result from foreign
travel or residence should bear in mind
that the specific risks with which he is
concerned vary greatly from one for-
eign country or area to another. There-
fore, prior to purchasing insurance ap-
plicable to overseas travel, the
prospective traveler should make a per-
sonal assessment of the foreign area(s)
in question. This review can be based on
available post reports, discussion of the
matter with an international insurance
representative, and questions put to oth-
er persons who have recently returned
from the area. Examples of some of the
major risks warranting careful consid-
eration are presented below:
(a) The transportation of personal
property involves an almost.. unlimited
range of risks which the shipper is
powerless to prevent or alleviate. The
full cycle of movement involves packing
and crating, varied means of transport,
standby- storage, loading and unloading,
and eventual transfer to a foreign
residence.
(b) Maritime insurance laws may
cause an individual shipper to be sub-
ject to general average and salvage
claims, causing him to suffer an unex-
pected financial setback or temporary
impounding of his property unless he is
protected against this contingency by a
clause in his insurance policy (see sec-
tion entitled "General Average and Sal-
vage," page 10).
(c) In some foreign countries, a fire
originating in the abode of one person
which causes damage to adjoining
structures may cause that person to be
liable for all damages or loss which
results. International personal liability
insurance can be written to protect the
insured against this risk.
(d) In many countries, automobile
owners are required to carry adequate
liability insurance for personal injury
and property damage which might re-
sult from operation of their cars. For-
eign customs officers may deny entry or
impound an automobile which is not so
insured (see section entitled "Interna-
tional Automobile Insurance," page
12).
(e) In a foreign country, the risk of
loss from theft, pilferage, larceny and
other criminal acts is often inversely
proportional to the country's level of
prosperity. Added caution should be
exercised in protecting and safeguard-
ing property in an area where the level
of prosperity is low since a high fre-
quency of loss may endanger one's
insurability:
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(f) Damages to or loss of property or
life caused by an individual's personal
acts or activities may subject him to
various types of liability claims. Igno-
rance of foreign laws and practices
tends to enlarge such risks. Then, too,
this risk is often accentuated by preju-
dice against the "American."
International Insurance for
Personal Property (excluding
Automobiles)
An individual's household goods and
personal effects usually represent a ma-
jor investment, the loss of which would
cause severe financial hardship. The
risks to which personal property is sub-
jected while being transported overseas
or to storage and during the period of
overseas residence arc greatly in-
creased. The property is handled and
packed by the employees of numerous
packing, transfer, steamship and rail-
.way companies and is continuously ex-
posed to risks of theft, damage, fire and
mysterious disappearance. Adequate in-
surance, therefore, to protect this prop-
erty is of primary concern to Federal
employees scheduled for foreign
assignments.
The transfer of all or part of an
individual's personal property into the
custody of a commercial warehouse
rarely provides the individual with ade-
quate protection against loss or dam-
age. The owner continues to bear the
major risk of loss or damage to his
property even though the loss occurs
while property is in storage under cir-
cumstances over which he has no direct
control. In facing this risk, an individ-
ual has the following alternatives:
In the event of loss or damage, he may
place his trust in obtaining a just settle-
ment from the storage company based
on the legal liabilities normally accept-
ed in warehousing. If total recovery of
loss or damage is expected, the property
owner would have to prove gross negli-
gence on the part of the storage com-
pany, obtain the services of a legal
counselor, take his case to court, and
win in order to enjoy total reimburse-
ment. Since a property owner's chances
of finding positive proof of gross negli-
gence are slight, the owner usually has
to settle for negligence occurring during
the normal course of storage handling
and operations, for which the normal
rate of reimbursement is sixty cents
(60c) per pound of stored goods. If a
warehouse fire resulted from arson, the
storage company would probably not be
held liable for any loss or damage suf-
fered by property owners.
In lieu of attempting to negotiate with
a storage company for reimbursement
of property loss or damage which re-
sults from company negligence, the
property owner can purchase insurance
protection by means of a separate poli-
cy, an amendment to his current insur-
ance policy, or possibly as a part of one
of the "Floater Policies" described
later. If insurance is purchased from
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the storage company it is well to make
sure that the storage company is acting
as agent for an insurance company and
not underwriting the insurance itself. In
each case, the property owner can be
afforded reliable protection through a
third party, namely the insurance un-
derwriter, who is bound by his insur-
for loss or damage specifically listed in
the terms of the policy. Third party
protection is positive, it provides fairly
rapid and effective settlement of claims,
and transfers responsibility for any de-
sired legal action to a party other than
the property owner.
Federal employees who have insur-
ance policies to cover their personal
property within their DOMF'STic resi-
dence from theft, fire, and extended
coverage (damage or destruction from
smoke, explosion, natural hazards, etc.)
companies will permit converted poli-
cies to cover the owner's property while
it is in domestic storage if timely notifi-
cation is made to the company. Since
the coverage and rates of such policies
residence, the policies generally have to
coverage for personal property in a spe-
cific warehouse. Warehouses are in-
spected and rated by underwriters, on a
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used to determine the cost of premiums.
An increased premium or it premium
refund may result.
Whether an individual insures person-
al property in storage by amendment
and continuation of his domestic insur-
ance policies or by purchase of a
"Floater Policy" which includes storage
of personal property, he should be
aware of a factor known as coinsurance.
Coinsurance may be illustrated by the
case of an individual who purchases
$3,000 of insurance to protect $10,000
of property. In the event loss or damage
is suffered which amounts to $3,000 of
the total value of $10,000, the policy-
holder may discover that he is entitled
only to $900 reimbursement (three-
tenths of the loss) even though he sus-
tained a S3,000 loss. Coinsurance im-
plies that if the insured is willing to
insure only three-tenths of the total
value of his personal property, then the
underwriter, in turn, is willing to as-
sume responsibility for only threc-
tenths of any loss a policyholder may
suffer. Coinsurance clauses are often
encountered in fire insurance and other
policies designed to protect property in
storage.
If the individual is not willing to ac-
cept the limitations of coinsurance, he
should request a full coverage contract.
Most underwriters grant full coverage
and require that the total or near total
value of the goods be insured against
loss or damage.
C. Inventory
To establish a sound basis for possible
future claims, the property owner
should prepare a comprehensive inven
... an individual will be well advised to personally supervise the packing and inventoring of his more valuable
property.
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tory of his household goods and person-
al effects. The inventory should list
dates of purchase and the amount paid
for the various items. For such items as
fine jewelry, art objects, and antiques,
an appraisal of fair market value is
usually preferable to using cost prices.
Sales and appraisal slips should be at-
tached to the inventory.
An inventory will be prepared by the
packers at the time that the effects are
being prepared for overseas shipment.
This inventory of property serves as a
detailed receipt of the property surren-
dered to a shipping authority or storage
company. If packers are permitted to
make an inadequate or incomplete in-
ventory, the shipping company may
very likely deny liability for missing
items since there will be no basis to
substantiate the claim. A dishonest
packer can easily misappropriate and
fail to inventory valuable items of prop-
erty. For these reasons, an individual
will be well advised to personally super-
vise the packing and inventorying of his
more valuable property, especially
items of small size and high value.
Copies of inventories signed by the
shipping company representatives
should be carefully retained until full
delivery has been made and all claims
settled.
floater personal property policies usual-
ly limit coverage to a specified location.
The "All Risk Floater Policy" pro-
vides the insured with the greatest
amount of protection. Rather than
name the perils which are insured
against, the policy limits or excludes
those for which the insurance company
does not assume responsibility. For ex-
ample, if it does not list flood under
"exclusions," protection is provided
against this peril. If there are only a
reasonable number of exclusions, the
policy will give excellent protection.
The standard exclusions found in most
"All Risk Floater Policies" are war,
invasion, insurrection, atomic fission,
gradual deterioration, moth, vermin,
and inherent defects in the property.
The "All Risk Floater Policy" is gen-
erally offered by insurance firms with a
deductible clause which may vary from
50 to $ l00 for each occurrence. In the
event of any loss or damage, the
amount of the deductible stated in the
insurance policy would be automatical-
ly subtracted from the approved claim.
Most companies are loathe to handle
small claims because of the administra-
tive expense required to process them.
The main purpose of this form of insur-
ance protection is to provide assurance
against large or heavy loss or damage
which would cause financial hardship.
One of the more effective types of
international personal property insur-
ance is termed the "Floater Policy."
This form of insurance contract pro-
tects the property of the insured any-
where in the world (i.e., at any place of
domicile excluding U.S. residence,
while in transit, or, if specified, during
warehouse storage). In contrast, non-
Since most overseas tours are for two
or more years, it can be to your advan-
tage to insure for a period of three years
since there is often a savings in pre-
mium rate and a continuing need for
insurance against the fact that a per-
son's possessions usually follow after his
departure from an overseas post [ex-
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The "All Risk Floater policy" provides the ir.:.urce with the greatest :{+ count of protection.
t -bile
tending the insurance requirement past
the two year tour]. During the period of
insurance, policy coverages can be.
modified, cancelled, reinstated, etc., in
cooperation with the insurance repre-
sentative. In almost every instance, a
refund of the unused portion of the
premium can be obtained on an appro-
priate basis when a policy is no longer
needed. Thus, a three year policy may
cost less, provide flexibility, and ensure
against inadvertent lapse in coverage
through oversight.
Nore.-Refer to pages 17-21 for a
"Summary of Basic Policies-Interna-
tional Personal Property Insurance."
Marine Automobile
Insurance
Marine automobile insurance protects
the insured against direct and acciden-
tal loss of or damage to his au on
from external cause while the auto-
mobile is in ocean transit. The coverage
begins at the time the automobile is
delivered into the custody of the ship-
ping company or port authorities and
terminates when the automobile is
landed, plus 72 hours on the dock or
until driven away, whichever is sooner.
In some instances, policies limit cover-
age after delivery to the dock by the
insured or his agent to 72 hours. The
time limit can often be waived with a
minimal additional premium. Supple-
mental transportation to or from the
dock by rail, truck, or other means
requires additional insurance.
The protective features, availability,
and premium rates charged for marine
automobile insurance are factors sub-
ject to considerable variation among
different underwriters and insurance
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companies. They also vary with the
circumstances for which the insurance
is written. The following points, how-
ever, illustrate general practices:
(a) Protection or coverage offered
In the case of an automobile less than
four (4) years old, international under-
writers and insurance companies gen-
rally offer all risk protection to the
owner. They will reimburse him for any
loss or damage incurred during ocean
transit unless specifically excluded in
the terms of the insurance contract.
The owner is also protected against
possible assessments which could result
from application of maritime insurance
laws (e.g., general average and
salvage).
Although automobiles five (5) and six
(6) years old can be protected with
marine automobile insurance, they are
often restricted to coverage under a
policy termed "F.P.A." (free of particu-
lar average). F.P.A. means that under
normal shipping conditions, the owner
is protected only against total loss and
general average assessments. If, howev-
er, the vessel is stranded, sunk, or suf-
fers fire or collision, the policyholder is
repaid for loss or damage in a manner
similar to the reimbursement he would
receive if he had an all risk policy less
any assessments which might be levied
because of maritime insurance law. In
effect, owners of automobiles restricted
to F.P.A. type of insurance have no
protection against damages which
might occur during the normal course
of ocean shipment and handling.
Automobiles over six (6) years old
may not be insurable for marine ship-
ment with some insurance companies.
In other instances, the value and identi-
ty, not age, may determine insurability
[Example--nminimum value of 51,000
Automobiles over six years of age may not be
insurable for marine shipment.
or morel. Because of variations in the
insurance industry, the age factor
should be explored by persons who need
marine coverage for the older car.
(b) Some underwriters have now com-
bined marine automobile coverage with
international automobile operating or
land insurance. This practice may make
it difficult to purchase marine auto-
mobile insurance separately without ob-
taining the additional, standard types of
operating insurance simultaneously.
From a general coverage standpoint,
however, a combined policy has many
advantages in that it protects the in-
sured from the time his car is released
to shipping authorities to the time he
returns to the United States with no
lapses in coverage. If an individual ob-
tained marine insurance only, it would
be necessary for him to arrange for
additional operating insurance which
would be in effect the moment his car
was landed at a port of debarkation as
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protection against collision, comprehen-
sive loss or damage from perils other
than collision, and particularly public
liability involving bodily injury or prop-
erty damage.
(c) The variation in premium rates
charged for marine automobile insur-
ance is warranted by the differing con-
ditions and facilities in various foreign
countries, particularly in relation to
conditions and facilities at ports of de-
barkation, the necessity for unloading
cars by lighter or other landing craft,
and the need for transshipment of auto-
mobiles, by varying means, to a receiv-
ing area.
Prospective policyholders should keep
the following points in mind when pur-
chasing marine automobile insurance:
(a) A policy offering marine coverage
does not protect the insured in the
United States even when purchased
prior to departure. An automobile own-
er should ensure that domestic auto-
mobile insurance is continued up to
and somewhat beyond the expected
date of departure to protect against the
unexpected.
(b) The marine features of policies
offered by most underwriters are effec-
tive only when an automobile is shipped
below deck or crated in an approved
manner. The owner, therefore, should
first determine the mode of shipment
and then ensure that appropriate cover-
age is obtained.
(c) Most marine automobile insur-
ance policies offer protection against
assessments arising from general aver-
age and salvage. This feature should be
investigated, however, to determine
that such coverage is written into the
policy.
(d) Because of the mandatory insur-
ance requirements of many foreign
countries, an automobile owner should
consider broad international insurance
which will protect him during shipment
and subsequent operation of his car
overseas with no time lapse in coverage.
General Average and
Salvage
In accordance with maritime insur-
ance law, the owners of cargo which is
destroyed or damaged under conditions
of common peril will be compensated
by contributions from all participants it
the voyage. When a ship is in peril, the
ship's master may, on occasion, be
forced to jettison or sacrifice cargo,
without discrimination, for the mutual
protection of all interests (the owners of
the ship and owners of the freight or
cargo). Since it is desirable that all
parties concerned be placed in the same
or equivalent position, in the time of
common peril, the material values
saved as well as lost or sacrificed are
combined to provide the basis for com-
puting a general average loss, a loss
which is averaged and shared on a
mutual basis.
In applying general average, the term
"peril" includes factors other than jetti-
soning. For example, the cost of repair-
ing an engine, damaged by excessive
use in freeing a ship forced aground
during a storm, may be assessed propor-
tionately against all shippers using the
vessel. Or if water or chemicals are
used to extinguish a fire in one hold, the
cost of damage to the ship or cargo is
often assessed against the owners of the
remaining cargo which is not damaged
because the remaining cargo would
have been jeopardized if the fire had
not been confined and brought under
control.
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Salvage, as it affects general average,
has two meanings. The first is the sal-
vage of value resulting from the recov-
ery, reconditioning and sale of damaged
goods. The proceeds gained from such
sales are subtracted from the total loss
and serve to reduce the amount of
general average assessment levied
against the shippers and the vessel's
owner. The second is the cost of marine
salvage operations incurred in saving
ships and their cargoes from peril and
impending loss at sea. The salvager is
not only reimbursed for such costs but
is granted an award for his effort. The
amount or cost of it salvage operation is
added to the loss when general average
assessments arc levied.
In each instance in which the proce-
dure is applicable, a general average
adjustor takes charge of compiling a
report of the circumstances, calculating
the loss versus the total values, assuring
completion of a general average bond
(an agreement by all parties to share
loss), and obtaining security from each
party in the form of cash, the guarantee
of an insurance underwriter, or the
holding of goods as collateral. This is.
usually a lengthy process and the indi-
vidual cannot obtain possession of his
property until he posts collateral nor
will he be paid for loss or damage until
the total assessment has been computed
and funds are available for distribution.
The U.S. Government has undertaken
to reimburse the Government employee
against contributions or assessments
levied against him resulting from the
shipment of any personal property spe-
cifically authorized to be transported at
Government expense by law or regula-
tion pursuant to law. This protection is
provided for in Executive Order No.
10614. The provisions of the order,
however, do Nor apply:
(a) In case the shipment of household
goods is made under law or regulation
pursuant to law which provides for re-
imbursement to the military person or
civilian employee concerned on a com-
muted basis in lieu of payment by the
Government of the actual costs of the
shipment;
(b) In case the military person or
civilian employee concerned has himself
selected the means of shipment; or
(c) To quantities of household goods
(excluding automobiles) shipped in ex-
cess of quantities authorized to be
transported by law or regulation pursu-
ant to law. In any case of such excess
shipment, the liability of the Govern-
ment for the employee's general-aver-
age contribution shall not exceed the
proportion that the applicable limita-
tion, by weight or volume, bears to the
total quantity, by weight or volume, of
the household goods shipped.
Notwithstanding the protection af-
forded by the Government, the traveler
will find that some floater policies and
marine automobile insurance policies
routinely incorporate "General Aver-
age" protections without additional or
identifiable cost. This protection is very
worthwhile since the insurance policy
itself usually acts as collateral, provides
for completion of all paperwork by the
insurance company, and assures prompt
payment for loss or damage to the
employee's property or prompt release
of the employee's undamaged property.
For these reasons, and to ensure protec-
tion should any of the limitations in the
Executive order apply, the traveler
should at least consider the desirability
of obtaining general average coverage
in planning his insurance protection
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against the other types of losses which
may be suffered in the shipment of
personal property.
International Automobile
Insurance
As noted in the section "Risks Related
to Foreign Travel or Residence," many
foreign countries have laws which
make the purchase of automobile lia-
bility insurance mandatory.
For employees being assigned to Eur-
ope, international insurance under-
writers issue a "Carte Internationale
d'Assurancc Automobile" or "Interna-
tional Motor Insurance Card," usually
referred to as the "green card," which
attests to the fact that the policyholder
has complied with mandatory insurance
requirements. The card carries a regis-
tered serial number, data concerning
the insured and his automobile, and
specifies the countries in which the
insurance is effective. Some countries
...the green card attests to the fact that the
policyholder has complied with manadatory insur-
ance requirements.
may require that the card be surren-
dered at the frontier post while other
countries permit the individual to retain
the card in his possession during the
course of his travel or residence in the
foreign country.
Some countries in Europe as well as
others throughout the world may re-
quire additional documentation as evi-
dence of compliance with mandatory
insurance requirements. Insurance
agents and brokers can provide employ-
ees with complete details concerning
these special requirements and arrange
for appropriate documentation.
The types of international automobile
insurance available are equivalent to
domestic policies. International policies
may be written to provide protection
against public liability (bodily injury
and property damage), comprehensive
damage, collision and basic or extended
medical payments to protect the driver
and passengers. The three broad op-
tions available to- employees for the
purchase of automobile insurance are:
(a) Package Automobile Policy.-I t
is possible to purchase from a United
States company one policy which 'pro-
vides coverage against all risks of loss
or damage to the automobile. This in-
cludes marine coverage from the port of
origin to final destination (see para-
graph (b), page 9. It also includes cov-
erage while at the overseas post. (Many
countries of the world require that li-
ability insurance be purchased from a
local firm.)
(b) Two Separate Policies.--The fol-
lowing two types of policies may be
purchased from U.S. insurance
companies:
( I ) Marine policy which provides pro-
tection from the U.S. port to the desti-
nation port.
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(2) Standard policy to provide protec-
tion from the date of arrival of the
automobile at the destination port and
cessation of the marine coverage.
(c) Marine Insurance Only. Marine
insurance may be purchased from a
U.S. company to provide coverage from
the date of shipment of the automobile
from the U.S. port and terminates when
the automobile is landed plus 72 hours
on the dock or until driven away,
whichever is sooner. Regular insurance
to be effective the day the ship docks
may be purchased at the post from a
local agent (from approved U.S. Em-
bassy-USAID list). (See page 15, "in-
surance Purchased From Foreign Coin
panies or Underwriters.")
As in the case of domestic automobile
insurance, the applicant must meet cer-
tain eligibility requirements before an
international policy will be issued.
Many underwriters will NOT insure
persons if they have had more than two
(2) accidents during the prior two (2)
year period of driving, are above or
below specified age levels, have had
their driver's permit revoked, or are
defendants in a legal liability suit. Re-
quirements, however, vary from com-
pany to company with some require-
ments being relatively standard. The
average, safe driver will have no diffi-
culty meeting prerequisites.
International insurance companies re-
serve the right to cancel an individual's
automobile insurance. Cancellation
most frequently results from specified
types or sequences of traffic accidents.
An example of how some insurance
companies may classify accidents is as
follows:
Tvpe A.-No fault of the insured.
Type B.-Fault of the insured but
NOT the result of criminal negligence.
Ti pe C.--Attributable to criminal
negligence, drunken driving, etc., on the
part of the insured, or leaving the scene
of an accident (fleeing from responsi-
bility).
Action taken to cancel insurance (as a
rule):
Type A or B.-First accident; no ac-
tion taken, record made.
Type B and several Type A.-Evalua-
tion made of individual policyholder;
could result in cancellation or
nonrenewal.
Type C.-Immediate cancellation; lit-
tle chance of regaining. insurance with
any underwriter.
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Personal Liability-An Interrelated Domestic/
International Risk
Under the laws of most countries and under varying conditions, an individual may
be held legally responsible to other persons for bodily injury or damage to their
property. The principal situations from which this legal liability arise are as follows:
(a) Legal responsibility by reason of being the owner or lessor of a residence
and related real estate upon which persons claim to have suffered damages.
(b) Legal responsibility for personal injury or damage to the property of
others by reason of negligent acts of an individual, his dependents or animals
owned by him.
(c) Legal responsibility to servants or other employees injured in the perform-
ance of duties, a responsibility inherent in the employer-employee relationship.
Federal employees traveling abroad face increased personal liability risks. This
amplification of risk is the result of:
(a) The increase in the number of legal jurisdictions within which legal action
may be brought against the individual. A U.S. citizen can be sued in U.S. courts
for injuries or damages allegedly caused abroad or may be sued in the courts of
the foreign country of temporary residence.
(h) The concurrent ownership or lessorship of real estate, both in the United
States and at the foreign post.
(c) Lack of awareness of local laws and resulting violation thereof, creating
prima facie evidence of negligence.
(d) Lack of awareness of foreign legal processes resulting in failure to respond
properly thereto, leading to judgments by default.
(e) The greater utilization of personal servants abroad.
(f) The possibility of bias on the part of foreign nationals, witnesses, and
courts against the "American."
In view of the above, it is important that an individual scheduled for foreign
assignment consider his need for comprehensive personal liability insurance that will
protect him in various situations he may encounter. An insurance contract or policy
routinely purchased for domestic protection may, in certain instances, have to be
exchanged for a comparable international policy if the insured desires to safeguard
himself against the increased and interrelated domestic/international risks. At the
same time, an owners, landlords and tenants policy may be needed to protect the
owner from suits arising from his ownership of property in the U.S. during his
absence (the regular fire and extended coverage policy protecting only against
property loss and damage-. NoT liability claims).
At foreign posts where servants are hired, a desirable form of comprehensive
personal liability insurance is the type which provides medical payments to the third
party injured on or about the premises occupied by the insured. If a servant falls,
suffers a severe cut or other injury, this type of policy will usually pay up to $250 for
any medical expenses resulting therefrom.
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Insurance Purchased From
Foreign Companies or
Underwriters
Insurance protection for the traveler is
not necessarily limited to policies ob-
tainable from U.S. insurance compa-
nies underwriting international policies.
Federal employees overseas generally
find that insurance is readily available
from local, foreign companies. Now-
ever, certain features of foreign com-
pany insurance must be considered:
(a) Policies may be written in a for-
eign language in foreign legal terminol-
ogy. They may be difficult to translate
unless the services of a language expert
(with legal training) are immediately
available.
(b) Foreign company policies may
limit the degree and type of protection
offered to the insured. Such policies
may NOT be effective beyond the
boundaries of the country in which the
insurance is issued.
(r) A foreign insurance company may
Nor be bound by the strict ethics or
legal requirements which govern reli-
able U.S. insurance underwriters. In
some instances Federal employees have
found that certain non-American com-
panies are evasive, hardheaded in re-
spect to claim settlement, tend to seek
technical loopholes, etc. Although this
factor certainly is NOT universal among
all non-U.S. underwriters, individuals
should check carefully before purchas-
ing said insurance.
(d) Persons traveling to an overseas
area where there arc many other
Americans should determine whether
or not personal liability and automobile
liability policies which they contem-
plate purchasing from a foreign insi!T--
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anCC him will t,rutect them' in the
I holed tiLttc' is well as the Country in
which the polio IS issued. II an indi-
idu,ll i~ Irrld Ieq,tdy liable for personal
ntun d,tntage .sintered by another
\rnrris ii. he hots he faced wiih ,t civil
mill file danriges r1 /w/1 he rc'trcrnrs lo tic
I(rile[! "tutt?.c and subsequently find he
is Niii protested b~ a policy issued h\ a
I oI e1L rl 0111 pa ny
titans Iorrien countries require auto-
nu>Itile r,rners to purchase automohilc
liability it,urance loc: dl-%, i.e.. Front ,In
irlsur:.nr~ c~rntt=an~. bi is Hp its Ironic of-
fice \sitlrin the country concerned. In
iceri.'nilurn of this fact, many F\nterictn
urndcnsriters offer "excess liahilits in-
Y~~~+7
When a loss : n to Ur red, the en~o ee oti contact his" admtnis
~:,?g3,= x irlu+at tp: s'Y~~ ~LK'~^!E ? ~>sN }~ 4Gkat r'f'r ~''1 .~(~d~'"~~?bi55.~`?''al
five PoffiCeir the ppriate3ofi0ia v>Serseas postfortadvicky
concerning w}~e a or np f eigi 1 im under the Viii( a
Persognel and? i t tail mp oyees Cif i 4, as amen1ed
z ~z. t~_; r ~... ~x s v "'~. t3~S1'4*zkd . "?: "` ss `. x d t 4 rw
The employeeshould check `his insurance>;po ivies to ascertain his dunes in
q;., I 'ow t ,; gar
the event"of ra loss` Viost tpolic es,srequire a eL}following things be done
promptly: l~ti~'i>s?c~,a" r#~t 9n+"z(a) Notify; local authorities-,an if De , get copy of police report for
thefts and vandalism
t. ?
(b)11 Notify'Flpcal insurance claims agent dr,a f none available or desig
3 ~ Y < ~ rx E ~ r! #r N`~15hx5 v~' ~ a'`~~ f a
Hated, notify the insurarlce agent or compan ,from whom you purchased
your poli~y~or~gma~ly ~^+ {~ ~..r~~'~`# ~, ~ ~ r
c1>A~dvisecrner orshlpper,wlietaz priate 4'
surance to pn+teet the operttor against
.lily nonprotective features which nrav
be inherent in policies sold hH lo=.a
foreign atntpanics
nlllwtw~h variouti ner'.itrse I',tcI rs
hays been cmphas icd recog ii
lion must be given io the Incl that there
,tre reliable non I ti insurance cons
parries which rifler es-cllent insurance.
protection to the American Iravelcr
Individuals wIto desire In investigaIe
the desirability of punvh,tsing insurance.
from non-U.S. conrpalie, sill find that
one of their hest s0MCCs ',l infrrniation
is the c.Ypericncc ill other Americat'
C111/en" who have lived in a particular
foreign country for sd cr.il years.
laims
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Government Service Floater (Personal Property)
CIRCUMSTANCES
L You are being processed for overseas assignment.
2. You desire to consolidate extensive fire, theft and other personal property protection at the
overseas location with protection during transportation.
3. You are subject to reassignment while overseas, additional goods or property may be shipped at a
later date, or travel or residence may not be limited to one country.
PROTECTION OFFERED
1. Protection of most personal property in-transit including household goods and unaccompanied,
baggage under a bill of lading. Protection is "residence-to-residence" and may include breakage,
marring and scratching; generally on a $50 to $100 deductible basis (varies among insurance
companies).
2. Protection of most property in your foreign residence against criminal acts, natural hazards, fire
and similar perils.
YOU ARE NOT PROTECTED AGAINST
I. First $50 to $100 of any loss (varies from company to company).
2. Loss of money, personal papers, tickets, animals, etc.
3. Loss or damage to automobiles, automobile accessories, and other conveyances.
4. Loss or damage to personal property remaining in the U.S., at your U.S. residence or in storage.
There can be exceptions to this exclusion-ask your agent or broker.
5. War, civil strife, insurrection, riot, and related risks.
6. Loss of personal effects ?accompanving the insured or members of his family. Again, there may
be exceptions to this exclusion-ask your agent or broker.
APPROXIMATE RATE SCHEDULE
On a 1-year term policy.
$2.30 to $2.50 per $100 of coverage depending on amount purchased (example: $117.50 for
$5,000 coverage).
There are definite savings generally available for pre-payment of premiums for two and three
year policies. Example: $5,000 coverage=$117.50 for I-year or $293.75 for 3-year; a savings of
$58.75 for pre-payment on 3 year policy.
Minimum premium is usually $50.
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I. You arc ou doi C"I", x,aItmment but are subtcct ttu forego assignment - a rc.t~ul::r t :I f iEno
apwintuirnt aid yw wish to be covered at all times, at home arid ibn?.d
it me s hedelcd or being processed for overseas assignment.
f ... see footnote]
2. Y"u wish to of Lain very broad and extensive insurance protection of personal propels owned,
uxd or worn I-, vii cell or ruined ale numbers of your family with limiter I over,,!,C f Cu"
3. You wish in Ir %e :r policy to which special endorscmer is can be added to fully {>rolcd!:
articles or pro rile leverage in "other than normal" circumstances.
the policy) of personal property at a foreign residence, a U.S. residence, in transit, during travel
in foreign countries, and while in U.S. or foreign storage. Coverage is afforded to the insured, his
[.:.see footnote]
NOTE: Separate marine certificates may be required by some companies for ocean transport
2.- -Loss or .d magerof property , under: circumstances noted wit the `Exclusions'.',
t4. Loss or damage to artielcsused for;busi>essor;professtonal,purposes by the insured
protection in these instances).
amount of the premium. Other underwriters have one premium rate worldwide.
Minimum amount of insurance required ranges from $4,000 to $7,5G0 of coverage.
Some companies have rate categories for various countries by which tbey,determinc 'the
underwriters.
NOTE: There are several versions of personal property floaters-they vary principally in the
locations in which they are effective. Some are worldwide, without qualification and others
-limit coverage to locations outside the United States or to specified groups of countries.
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'
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Scheduled Property Floater
1. You own special articles of value (cameras, jewelry, silver, fur, stamp collection, recreation
equipment, etc.) generally worth $250 or more per class of article (e.g., camera with
interchangeable lenses and electronic flash).
2. You wish to insure onlt? the specific, prized items or ensure greater for a scheduled item not
covered adequately or at all by another policy.
1. All risk protection on a worldwide basis in-transit, while carried, in and out of your residence,
and most other circumstances.
2. Reimbursement for loss or damage to articles designated on the policy form for the value insured
(deductible does not apply).
1. Loss or damage for reasons of normal wear and tear, gradual deterioration, inherent defects,
moths or vermin, and while article is being worked on (in the repair shop).
2. Loss or damage suffered because of war, civil strife, riot, insurrection, and related perils.
'RU1!,tf III li-ill. ~( i// AT I.l.
1. ANNUAL premium ranges from $1 to $3 per $100 of value, depending on the type of article
insured.
2. There can be a savings for prepayment for two and three year policies ranging from 10% to .20%.
3. Minimum premium rules invariably apply.
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Comprehensive Package Policy
1. You are shed "Co' itt being pint css.'d Iur an otier,eas assignment OR - you are ;rer