[Federal Register Volume 60, Number 115 (Thursday, June 15, 1995)]
[Rules and Regulations]
[Pages 31371-31375]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-14574]



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 Rules and Regulations
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  Federal Register / Vol. 60, No. 115 / Thursday, June 15, 1995 / Rules 
and Regulations  

[[Page 31371]]

OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 870, 871, 872, 873, and 874

RIN 3206-AG79


Federal Employees' Group Life Insurance Program: Living Benefits

AGENCY: Office of Personnel Management.

ACTION: Interim regulations with request for comments.

-----------------------------------------------------------------------

SUMMARY: The Office of Personnel Management (OPM) is issuing interim 
regulations to implement the ``FEGLI Living Benefits Act'' of 1994. 
This law requires OPM to issue regulations which state: that under the 
Federal Employees' Group Life Insurance (FEGLI) Program, basic life 
insurance may be elected to be paid to an insured individual who is 
certified as terminally ill with a life expectancy of 9 months or less; 
that an employee may elect that the basic benefit be paid in total or, 
in part in multiples of $1,000; that annuitants may elect only the 
total amount of basic; that there will be no increase in the actuarial 
value of the benefit; that OPM will have an Open Season of at least 8 
weeks duration beginning prior to the effective date of the law, during 
which employees who are not currently enrolled in basic may elect it; 
and that define an application process.

DATES: These interim regulations are effective June 15, 1995. Comments 
must be received on or before August 14, 1995.

ADDRESSES: Send written comments to Lucretia F. Myers, Assistant 
Director for Insurance Programs, Retirement and Insurance Service, 
Office of Personnel Management, P.O. Box 57, Washington, DC 20044; or 
deliver to OPM, Room 3451, 1900 E Street NW., Washington, DC; or FAX to 
(202) 606-0633.

FOR FURTHER INFORMATION CONTACT: Faith M. Hannon, (202) 606-0004.

SUPPLEMENTARY INFORMATION: Public Law 103-409, the ``FEGLI Living 
Benefits Act'', requires OPM to regulate a FEGLI Open Season in 1995 of 
at least 8 weeks duration prior to the effective date of the law, July 
25, 1995. The law also requires OPM to regulate provisions for: the 
election by a terminally ill individual covered by FEGLI basic 
insurance of a lump sum payment of basic insurance as a Living Benefit; 
the reduction of the Living Benefit so that it is actuarially 
equivalent to the basic insurance benefit that would have been paid in 
the absence of a Living Benefit election; and an application process. 
These interim regulations allow OPM to implement the statutory 
requirements of the law prior to its effective date.

Open Season

    The interim regulations provide that OPM will hold a 9-week FEGLI 
Open Season from May 22, 1995, through July 21, 1995. The Open Season 
will be of 9 weeks duration to allow for the 2 legal holidays during 
this period. During this Open Season, employees who have waived or 
cancelled basic insurance and who are not excluded from eligibility by 
law or regulation, may enroll in basic insurance only. Optional 
insurance may not be elected or increased during this Open Season. This 
Open Season is limited to election of basic insurance because its 
purpose is to implement the Living Benefits Act which only applies to 
basic insurance.
    Employees who have been on Leave Without Pay for 12 or more months, 
compensationers who have been on Leave Without Pay for 12 or more 
months, and annuitants, may not participate in this Open Season. The 
law specifically limits participation in the Open Season to employees 
as defined by section 8701(a) of title 5, United States Code.
    The effective date of basic insurance elected during this Open 
Season will be the first day of the first pay period beginning on or 
after the date the employing office received the enrollment form. 
Unlike in previous Open Seasons, there will be no requirement for the 
employee to be in a pay and duty status for the enrollment elected 
during this Open Season to become effective. The legislative intent of 
this law clearly was to make a Living Benefit available to the greatest 
number of eligible employees possible. It would be contrary, therefore, 
to the intent of the law to require that employees be in a pay and duty 
status before the Open Season election becomes effective. However, we 
must emphasize that it is OPM's firm intent to have a pay and duty 
status requirement for coverage elections to be effective in any and 
all future FEGLI Open Seasons.
    An election during this Open Season will not be considered a first 
opportunity to enroll for purposes of meeting the requirements to carry 
life insurance into retirement. In order to carry coverage elected 
during this Open Season into retirement, the coverage must be in effect 
for the 5 years of service immediately preceding the date of 
retirement, or for the entire period(s) of service during which it was 
available, if less than 5 years.

Living Benefits

    Public Law 103-409 requires that terminally ill employees who have 
FEGLI basic insurance be allowed to elect as a Living Benefit either a 
lump-sum payment of the total amount of their basic insurance or a 
partial payment of their basic insurance in a multiple of $1,000. 
Eligible compensationers and annuitants may only elect to receive a 
lump-sum payment of the total amount of their basic insurance. The law 
also defines a terminally ill individual as one who has been certified 
as having a life expectancy of 9 months or less. The Living Benefits 
Act does not apply to and has no effect on Optional Insurance.
    This interim regulation specifies the parameters of the total/
partial requirements of the law and also explains that a Living Benefit 
election will either reduce the accidental death and dismemberment 
coverage upon an effective election of a partial Living Benefit or 
terminate the accidental death and dismemberment coverage upon an 
effective election of a total Living Benefit. In addition, this 
regulation describes how the Basic Insurance Amount (BIA) will be 
reduced in proportion to the amount elected for a partial Living 
Benefit. The remaining BIA, or post-election BIA, will not change after 
the computation of the partial Living Benefit regardless if there is a 
change in other circumstances, e.g., salary, or age. When the insured 
[[Page 31372]] dies, the remaining BIA will be multiplied by the age 
factor that was in effect at the time the completed Living Benefit 
application was received by the Office of Federal Employees' Group Life 
Insurance (OFEGLI) in order to compute the final payment of basic 
insurance benefits.
    Once an insured has made an effective Living Benefit election, that 
election is irrevocable. In addition, an insured may make only one 
Living Benefit election. That is to say, the insured who has made a 
partial Living Benefit election may not make a subsequent Living 
Benefit election for any portion of the remaining basic insurance.

Assignments

    This regulation stipulates that individuals who have assigned their 
insurance under the authority of 5 U.S.C. 8706(e) may not elect a 
Living Benefit and that those individuals who have elected a Living 
Benefit may not assign their insurance.

Actuarial Reduction

    OPM is required by law to assure that there is not an increase in 
the actuarial value of the benefit paid. This is accomplished by 
regulating that the amount of Living Benefit payment is actuarially 
reduced to account for the amount of interest lost to the Employees' 
Life Insurance Fund (Fund) and the time difference between when the 
Living Benefit payment is made and when the death benefits would have 
been paid in the absence of a Living Benefit election. The actuarial 
reduction will be based on an assumption of the interest rate and the 
time period that reflects the earlier payment date. Initially, the 
actuarial reduction will be 4.9 percent of the benefit. This 4.9 
percent actuarial reduction factor will change, if necessary, after 
Living Benefits have been in effect long enough to analyze the 
experience. Any change in the actuarial reduction factor will be 
published in the Federal Register.

Withholdings and Contributions

    This interim regulation specifies that the withholdings and 
contributions for basic insurance will terminate at the end of the pay 
period in which a total Living Benefit election is effective. The 
withholdings and contributions for basic insurance after a partial 
Living Benefit has been elected will be based on the remaining BIA 
(post-election BIA) in effect at the end of the pay period in which the 
Living Benefit election is effective. A Living Benefit election is 
effective on the date the Living Benefit payment check is cashed or 
deposited.

Application Process

    OPM is required by law to regulate the application process. 
Therefore, this regulation provides how an insured individual may apply 
for the Living Benefit through OFEGLI and the subsequent steps that 
need to occur in order for a Living Benefit to be paid. Only the 
insured individual may make a Living Benefit election. No one else, 
e.g., a spouse, a guardian, or someone with a power of attorney, may 
make a Living Benefit election on the insured's behalf. It also 
explains that, if the physician's certification of the nature of the 
illness and the life expectancy of the insured are not sufficient for 
OFEGLI to approve or disapprove the application, OFEGLI may request 
additional medical evidence from the attending physician. If necessary, 
OFEGLI may then also request a medical examination of the insured at 
OFEGLI's expense.
Additional Information

    Detailed guidance will be provided to agencies and employing 
offices through Benefits Administration Letters (BAL's) and Payroll 
Office Letters. This information and guidance will address the 
obligations of the agencies and employing offices in the administration 
of the Living Benefit.
    OPM believes that, at this time, it is required to withhold 10% of 
the Living Benefit payment for Federal and/or State taxes unless the 
insured requests on the application that the amount for taxes not be 
withheld. This policy is subject to change if applicable tax law or 
regulations change.

Waiver of Notice of Proposed Rulemaking

    Pursuant to section 553(b)(3)(B) of title 5 of the U.S. Code, I 
find that good cause exists for waiving the general notice of proposed 
rulemaking. OPM must issue regulations to implement Public Law 103-409, 
which is effective July 25, 1995. In addition, employing offices need a 
certain amount of lead time in order to implement the regulations by 
the effective date. These concerns make it impractical to publish 
proposed regulations.

Regulatory Flexibility Act

    I certify that this regulation will not have a significant economic 
impact on a substantial number of small entities because the 
regulations primarily affect individuals currently enrolled under the 
Federal Employees' Group Life Insurance Program and those Federal 
employees who would enroll during this mandated Open Season.

List of Subjects

5 CFR Part 870

    Administrative practice and procedure, Government employees, 
Hostages, Iraq, Kuwait, Lebanon, Life insurance, Retirement.

5 CFR Part 871

    Administrative practice and procedure, Government employees, Life 
insurance, Retirement.

5 CFR Part 872

    Administrative practice and procedure, Government employees, Life 
insurance, Retirement.

5 CFR Part 873

    Administrative practice and procedure, Government employees, Life 
insurance, Retirement.

5 CFR Part 874

    Government employees, Life insurance, Retirement.

Office of Personnel Management.
James B. King,
Director.
    Accordingly, OPM is amending 5 CFR parts 870, 871, 872, 873, and 
874 as follows:

PART 870--FEDERAL EMPLOYEES' GROUP LIFE INSURANCE PROGRAM

    1. The authority citation for part 870 is revised to read as 
follows:

    Authority: 5 U.S.C. 8716; Sec. 870.202(c) also issued under 5 
U.S.C. 7701(b)(2); subpart J is also issued under section 599C of 
Pub. L. 101-513, 104 Stat. 2064, as amended; subpart K is also 
issued under Pub. L. 103-409.

    2. In Sec. 870.203, paragraph (e) is added to read as follows:


Sec. 870.203  Effective dates of insurance.

* * * * *
    (e) An open enrollment election of basic life insurance filed 
during the period from May 22, 1995, through July 21, 1995, is 
effective on the 1st day of the first pay period beginning on or after 
the date the employing office received the enrollment form. There is no 
requirement to be in a pay and duty status for the enrollment to be 
effective.
    3. In Sec. 870.204, paragraph (h) is added to read as follows:


Sec. 870.204  Waiver and cancellation of waiver of insurance coverage.

* * * * *
    (h)(1) An Open Season will be held from May 22, 1995, through July 
21, 1995, during which time employees otherwise eligible for coverage 
may [[Page 31373]] cancel their existing waivers of coverage by 
affirmatively electing to be insured on a form designated by OPM.
    (2) An employing office may make a determination, within 6 months 
after the May 22, 1995, through July 21, 1995, Open Season, that an 
employee was unable, for cause beyond his/her control, to cancel his/
her then existing waiver of coverage by affirmatively electing to be 
insured during the 1995 Open Season. The employee will be permitted to 
submit an affirmative election of coverage within 31 days after he/she 
is advised of that determination. Basic life insurance coverage in that 
case is retroactive to the 1st day of the first pay period beginning on 
or after July 21, 1995.
    4. In Sec. 870.301, paragraph (c) is added to read as follows:


Sec. 870.301  Basic insurance amount (BIA).

* * * * *
    (c) The post-election BIA of an employee who elected a partial 
Living Benefit is the BIA as of the date OFEGLI received the completed 
Living Benefit application reduced by the percentage which the partial 
lump-sum payment represents of the pre-election BIA multiplied by the 
age factor as stated in Sec. 870.301(b)(rounded up or down to the 
nearest multiple of $1,000 or, if midway between multiples, to the next 
higher multiple of $1,000). The post-election BIA will not change after 
the effective date of the partial Living Benefit election. For purposes 
of computing the payment of benefits upon the death of the insured 
individual who elected a partial Living Benefit, the BIA will be 
multiplied by the age factor in effect as of the date OFEGLI received 
the completed Living Benefit application.
    5. Section 870.402 is added to read as follows:


Sec. 870.402  Withholdings and contributions following a Living 
Benefits election.

    (a) The basic insurance withholding for an insured individual who 
has elected a total payment of basic insurance for a Living Benefit 
will cease the end of the pay period in which the election of Living 
Benefits is effective.
    (b) The amount withheld for basic insurance from the pay of an 
insured employee who has elected a partial Living Benefit will be based 
on the amount of BIA remaining after the partial Living Benefit 
election is effective.
    (c) The amount withheld for basic insurance from the annuity of an 
annuitant who elected a partial Living Benefit as an employee will be 
based on the amount of BIA remaining after the partial Living Benefit 
election is effective.
    (d) The amount withheld for basic insurance from the compensation 
of a compensationer who elected a partial Living Benefit as an employee 
will be based on the amount of BIA remaining after the partial Living 
Benefit election is effective.
    6. In Sec. 870.501, paragraph (a) is revised to read as follows:


Sec. 870.501  Termination and conversion of insurance coverage.

    (a) Except as provided in Secs. 870.601 and 870.701, the basic 
insurance of an insured employee stops on the date of his/her 
separation from the service, subject to a 31-day extension of basic 
life insurance coverage, or on the effective date of a full Living 
Benefits election.
* * * * *
    7. In Sec. 870.601, paragraphs (c) introductory text and (c)(4) are 
revised to read as follows:


Sec. 870.601  Eligibility for life insurance.

* * * * *
    (c) An individual who makes an election under paragraph (b) of this 
section must select one of the following options, except that those 
individuals who have elected a partial Living Benefit must select the 
option under paragraphs (c)(1) or (c)(4) of this section:
* * * * *
    (4) Continuation or reinstatement of basic life insurance coverage 
with no reduction after age 65, and with continuous premiums withheld 
from annuity. An insured individual may cancel an election under 
paragraphs (c)(3) or (c)(4) of this section at any time, except for 
those individuals who have elected a partial Living Benefit as an 
employee. An insured individual who has elected a partial Living 
Benefit may only cancel an election under paragraph (c)(4) of this 
section if he/she is electing to terminate the insurance under 
paragraph (c)(1) of this section.
* * * * *
    8. In Sec. 870.602 the current paragraph is redesignated as 
paragraph (a) and paragraph (b) is added to read as follows:


Sec. 870.602  Amount of life insurance.

* * * * *
    (b) The post-election BIA of an annuitant who elected a partial 
Living Benefit as an employee is the BIA as of the date OFEGLI received 
the completed Living Benefit application reduced by the percentage 
which the partial lump-sum payment represents of the pre-election BIA 
multiplied by the age factor as stated in Sec. 870.301(b) (rounded up 
or down to the nearest multiple of $1,000 or, if midway between 
multiples, to the next higher multiple of $1,000). For the purpose of 
computing the payment of benefits upon the death of an insured 
annuitant who elected a partial Living Benefit as an employee, the BIA 
will be multiplied by the age factor in effect as of the date OFEGLI 
received the completed Living Benefit application.
    9. In Sec. 870.701, paragraphs (c) introductory text and (c)(4) are 
revised to read as follows:


Sec. 870.701  Eligibility for life insurance.

* * * * *
    (c) An individual who makes an election under paragraph (b) of this 
section must select one of the following options, except that those 
individuals who have elected a partial Living Benefit must select the 
option under paragraphs (c)(1) or (c)(4) of this section:
* * * * *
    (4) Continuation or reinstatement of basic life insurance coverage 
with no reduction after age 65, and with continuous premiums withheld 
from compensation. An insured individual may cancel an election under 
paragraphs (c)(3) or (c)(4) of this section at any time, except for 
those individuals who have elected a partial Living Benefit as an 
employee. An insured individual who has elected a partial Living 
Benefit may only cancel an election under paragraph (c)(4) of this 
section if he/she is electing to terminate the insurance under 
paragraph (c)(1) of this section.
* * * * *
    10. In Sec. 870.702 the current paragraph is redesignated as 
paragraph (a) and paragraph (b) is added to read as follows:


Sec. 870.702  Amount of life insurance.

* * * * *
    (b) The post-election BIA of a compensationer who elected a partial 
Living Benefit as an employee is the BIA as of the date OFEGLI received 
the completed Living Benefit application reduced by the percentage 
which the partial lump-sum payment represents of the pre-election BIA 
multiplied by the age factor as stated in Sec. 870.301(b) (rounded up 
or down to the nearest multiple of $1,000 or, if midway between 
multiples, to the next higher multiple of $1,000). For the purpose of 
computing the payment of benefits upon the death of an insured 
compensationer who elected a partial Living Benefit as an employee, the 
BIA will be multiplied by the age factor in effect as of the date 
OFEGLI received the completed Living Benefit application. 
[[Page 31374]] 
    11. In Sec. 870.801 the current paragraph is redesignated as 
paragraph (a) and paragraph (b) is added to read as follows:


Sec. 870.801  Assignments.

* * * * *
    (b) If an individual has assigned his/her insurance, he/she may not 
elect a Living Benefit and if an individual has elected a Living 
Benefit, he/she may not assign his/her insurance.
    12. In part 870, subpart K is added to read as follows:

Subpart K--FEGLI Living Benefits

Sec.
870.1101  Purpose.
870.1102  Definitions.
870.1103  Open season.
870.1104  Living benefits.
870.1105  Actuarial reduction.
870.1106  Withholdings and contributions for basic insurance.
870.1107  Application procedures.

Subpart K--FEGLI Living Benefits


Sec. 870.1101  Purpose.

    This subpart sets forth the circumstances under which employees may 
enroll in basic insurance during the 1995 Open Season and terminally 
ill individuals enrolled in basic insurance may elect to receive a 
payment of their basic insurance as a Living Benefit on or after July 
25, 1995.


Sec. 870.1102  Definitions.

    In this subpart--
    Effective date of Living Benefits election means the date on which 
the Living Benefits payment is cashed or deposited.
    Terminally ill means the individual has a medical prognosis of a 
life expectancy of 9 months or less.


Sec. 870.1103  Open season.

    (a) An Open Season will be held from May 22, 1995, through July 21, 
1995, during which time an employee who has waived or cancelled basic 
insurance and is not excluded from eligibility by law or under 
Sec. 870.202 of subpart B, may enroll in basic insurance only. Optional 
insurance may not be elected or increased during this Open Season. 
Employees who have been on Leave Without Pay for 12 or more months, 
compensationers who have been on Leave Without Pay for 12 or more 
months, and annuitants, may not participate in this Open Season.
    (b) The effective date of basic insurance elected during this Open 
Season is the 1st day of the first pay period beginning on or after the 
date the employing office received the enrollment form. There is no 
requirement to be in a pay and duty status for the enrollments elected 
during this Open Season to become effective.


Sec. 870.1104  Living benefits.

    (a) An individual who is covered by basic insurance and who is 
certified as terminally ill, as defined in Sec. 870.1102, may elect to 
receive a lump-sum payment of basic insurance on or after July 25, 
1995. Only the insured individual may make a Living Benefits election.
    (b)(1) An employee may elect to receive the basic insurance in 
total or in part, in a multiple of $1,000.
    (2) A compensationer or an annuitant may only elect to receive a 
lump-sum payment of the total amount of basic insurance.
    (c) If the employee elects to receive a partial payment of basic 
insurance, the remaining BIA, the post-election BIA, will be reduced in 
proportion to the amount of basic insurance elected as a Living 
Benefit, as prescribed by Pub. L. 103-409. The post-election BIA will 
not change after the effective date of the partial Living Benefit 
election. Only the basic benefits remaining will be payable at death.
    (d)(1) If the employee receives the total amount of basic insurance 
as a Living Benefit, accidental death and dismemberment coverage will 
terminate as of the effective date of election.
    (2) If the employee receives a partial payment of basic insurance 
as a Living Benefit, accidental death and dismemberment coverage will 
be reduced to equal the post-election BIA.
    (e) Once an election of Living Benefits has become effective, the 
election may not be revoked and no further election of Living Benefits 
may be made.
    (f) If an individual has assigned his/her insurance, he/she may not 
elect a Living Benefit and if an individual has elected a Living 
Benefit, he/she may not assign his/her insurance.


Sec. 870.1105  Actuarial reduction.

    The amount of basic insurance elected as a Living Benefit will be 
reduced in order to produce a basic insurance benefit that is 
actuarially equivalent, to the extent practicable, to the basic 
insurance benefit of those who do not elect to receive a Living 
Benefit. The actuarial reduction will be based on assumptions of the 
amount of interest lost to the Fund because of the early payment and 
the time difference between when the Living Benefit payment is made and 
when the death benefits would have been paid in the absence of a Living 
Benefits election.
Sec. 870.1106  Withholdings and contributions for basic insurance.

    (a) Withholdings and contributions for basic insurance for those 
individuals who receive a lump-sum payment of their total basic 
insurance as a Living Benefit will terminate at the end of the pay 
period in which the Living Benefit election is effective.
    (b) Withholdings and contributions for basic insurance for those 
employees who receive a lump-sum payment of a partial amount of their 
basic insurance as a Living Benefit will be reduced in proportion to 
the amount of benefit elected and will be based on the post-election 
BIA in effect at the end of the pay period in which the Living Benefit 
election is effective.


Sec. 870.1107  Application procedures.

    (a) The insured individual must request information on Living 
Benefits and an application form directly from OFEGLI.
    (b) The insured individual must complete the first part of the 
application (General Information) and have his/her physician complete 
the second part of the application (Physician's Statement). The insured 
then submits the completed application directly to OFEGLI.
    (c)(1) OFEGLI will review the application and the certification by 
the physician of the nature of the illness and that the insured is 
terminally ill, with a life expectancy of 9 months or less.
    (2) If additional information is needed, OFEGLI will contact the 
insured or the insured's physician.
    (3) Under certain circumstances, OFEGLI may require a medical 
examination prior to making an approval decision. In these cases, 
OFEGLI will be financially responsible for the cost of the medical 
examination.
    (d)(1) If the application is approved, OFEGLI will send the insured 
a check for the Living Benefit payment and an explanation of benefits. 
In addition, once the payment has been cashed or deposited, OFEGLI will 
send explanations of benefits to the insured's employing office and 
payroll office so that they will change basic insurance withholdings 
and contributions in accordance with Sec. 870.1106.
    (2) If the application is not approved, OFEGLI will notify the 
insured individual and the employing office. The decision will not be 
subject to administrative review. However, the insured individual may 
reapply at a later date if future circumstances 
warrant. [[Page 31375]] 

PART 871--STANDARD OPTIONAL LIFE INSURANCE

    13. The authority citation for part 871 continues to read as 
follows:

    Authority: 5 U.S.C. 8716.

    14. In Sec. 871.501, paragraph (a) is revised to read as follows:


Sec. 871.501  Termination and conversion of insurance.

    (a) The standard optional insurance of an insured person stops when 
his/her basic insurance stops as provided in Sec. 870.501 of this 
chapter, subject to a 31-day extension of standard optional life 
insurance coverage, except when the basic insurance stops due to a full 
Living Benefits election, in which case the standard optional insurance 
will continue unless voluntarily cancelled by the insured.
* * * * *

PART 872--ADDITIONAL OPTIONAL LIFE INSURANCE

    15. The authority citation for part 872 continues to read as 
follows:

    Authority: 5 U.S.C. 8716.

    16. In Sec. 872.501, paragraph (a) is revised to read as follows:


Sec. 872.501  Termination and conversion of insurance.

    (a) The additional optional insurance of an insured person stops 
when his/her basic insurance stops as provided in Sec. 870.501 of this 
chapter, subject to a 31-day extension of additional optional insurance 
coverage, except when the basic insurance stops due to a full Living 
Benefits election, in which case the additional optional insurance will 
continue unless voluntarily cancelled by the insured.
* * * * *

PART 873--FAMILY OPTIONAL LIFE INSURANCE

    17. The authority citation for part 873 continues to read as 
follows:

    Authority: 5 U.S.C. 8716.

    18. In Sec. 873.501, paragraph (a) is revised to read as follows:


Sec. 873.501  Termination and conversion of insurance.

    (a) The family optional insurance of an insured person stops when 
his/her basic insurance stops as provided in Sec. 870.501 of this 
chapter, subject to a 31-day extension of family optional insurance 
coverage, except when the basic insurance stops due to a full Living 
Benefits election, in which case the family optional insurance will 
continue unless voluntarily cancelled by the insured.
* * * * *

PART 874--ASSIGNMENT OF LIFE INSURANCE

    19. The authority citation for part 874 continues to read as 
follows:

    Authority: 5 U.S.C. 8716.

    20. In Sec. 874.201, paragraph (g) is added to read as follows:


Sec. 874.201  Assignments permitted.

* * * * *
    (g) An insured individual who has elected a Living Benefit may not 
assign his/her insurance and an insured individual who has assigned 
his/her insurance may not elect a Living Benefit.

[FR Doc. 95-14574 Filed 6-14-95; 8:45 am]
BILLING CODE 6325-01-P