[Federal Register Volume 67, Number 235 (Friday, December 6, 2002)]
[Proposed Rules]
[Pages 72626-72629]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-30935]


=======================================================================
-----------------------------------------------------------------------

POSTAL SERVICE

39 CFR Part 111


Indemnity Claims; Notice of Changes

AGENCY: Postal Service.

ACTION: Proposed rule.

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

SUMMARY: The Postal Service proposes to revise its standards concerning 
indemnity claims as set forth in the Domestic Mail Manual (DMM) S010, 
Indemnity Claims; and related provisions of S913, Insured Mail, and 
S920, Collect on Delivery (COD) Mail. Other than the proposed changes 
concerning time periods for filing claims and retention periods for 
undelivered Insured Mail, the changes clarify existing DMM provisions 
or codify, in the DMM, policies not currently set forth in that manual.

DATES: Comments must be received on or before 30 days from date of 
publication.

[[Page 72627]]


ADDRESSES: Written comments should be mailed or delivered to the 
manager, Revenue and Field Accounting, 475 L'Enfant Plaza SW, Room 
8831, Washington, DC 20260-5242. Copies of all written comments will be 
available at the above address for inspection and photocopying between 
9 a.m. and 4 p.m. Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Gilbert LeMarier, 202-268-3333.

SUPPLEMENTARY INFORMATION: The proposed changes fall into several 
categories. Each is addressed separately below.

I. Claim Filing Time Limits

    The Postal Service is redesigning the claims system to ensure a 
more timely response to claims filed by our customers. The Customer 
Claims Response System (CCRS) will provide an interactive means, 
utilizing Web technology, to capture claim information from designated 
field units and to expedite claim adjudication. The product tracking 
system will be utilized to obtain delivery information.
    In conjunction with the redesign of the claim system, time limits 
for filing a claim will be revised. The current policy that a customer 
must file a claim immediately when the contents of an article are 
damaged or missing will now have a clearly stated time limit of no 
later than 45 days from the mailing date. Also, for a lost article, a 
customer would be able to file sooner for certain special service 
products. Insured and bulk insured service customers would be able to 
file a claim 21 days from the mailing date versus the current 30-day 
requirement. Customers of COD mail, Express Mail COD, and registered 
COD special services would be able to file a claim 45 days from the 
mailing date versus the current 60-day requirement.
    For Insured Mail, Registered Mail, and COD services, the Postal 
Service proposes that the maximum time limit for filing a claim be 
reduced to no later than 180 days from the mailing date. These proposed 
changes will enhance the efficient and timely processing of claims and 
reduce the retention period of undeliverable, accountable mail.

II. Retention Periods

    The Postal Service also proposes to reduce the retention of 
undelivered Insured Mail items. Currently, undeliverable mail is 
forwarded to mail recovery centers (MRCs). Under current procedures, 
information about undeliverable accountable mail items (Insured Mail, 
Registered Mail, and COD mail) is logged into a national claims 
database and the accountable article is held for 1 year from the date 
of receipt, the maximum time limit allowed for filing a claim from the 
mailing date. The Postal Service proposes that retention periods for 
accountable mail be shortened to 180 days from the date of receipt to 
match the new proposed maximum time limit allowed for filing a claim. 
This also would relieve capacity constraints on MRCs.

III. Documentation in Support of Claims

    Under current mailing standards, only the sender may file a claim 
for the complete loss of Registered Mail, Insured Mail, COD, or Express 
Mail articles. The Postal Service proposes that either the sender or 
addressee, whoever is in possession of the mailing receipt, may now 
file a claim for the complete loss of a Registered Mail, numbered 
Insured Mail, COD, or Express Mail article. Only the sender would be 
allowed to file a claim for the complete loss of an unnumbered, insured 
article.
    As evidence of value when a sales receipt or invoice is not 
available, the acceptance of a customer's statement with sufficient 
detail to determine whether the value claimed is accurate would be 
accepted only for items valued up to $100. Other acceptable evidence of 
value would be a copy of a canceled check, money order receipt, credit 
card statement, or other documentation indicating the amount paid. For 
Internet transactions conducted through a Web-based payment network, 
acceptable evidence of value is a computer printout of an online 
transaction identifying the purchaser and seller, price paid, date of 
transaction, description of item purchased, and an indication the 
status of the transaction is completed.
    As is the case with current policy, customer statements, receipts, 
or other evidence of value supplied by the customer will not 
necessarily be determinative of the value of the lost or damaged 
article, particularly if other information indicates the actual value 
at the time of mailing is different.

IV. Damage

    To file a claim, the addressee must present the article, packaging, 
and mailing container to the Postal Service for inspection. If the 
sender, in conjunction with the CCRS, files the claim and the damaged 
article is in the custody of the addressee, the sender's Post Office or 
designated site will enter the claim data into the CCRS. The CCRS will 
generate a letter to the addressee instructing that the article, 
packaging, and container be presented to the Postal Service for 
inspection.

V. Additional Grounds for Denial of Claims

    The Postal Service proposes that indemnity will not be paid for 
collect on delivery (COD), Insured Mail, Registered Mail, or for 
Express Mail service in the following situations:
    [sbull] Mailer refusing to accept delivery of the mailpiece on 
return.
    [sbull] Mail not bearing the complete names and addresses of the 
sender and addressee, or both the recipient's address and return 
address, and therefore is undeliverable.
    [sbull] Event tickets received after the event.
    [sbull] Software installed onto computers that have been lost or 
damaged.
    [sbull] A personal check remitted to the mailer for a COD article 
and not honored by the financial institution upon which it is drawn.
    [sbull] Damaged articles not claimed within the prescribed time 
limits set forth in Postal Operations Manual (POM) 147.3.
    [sbull] Personal time used to make handmade, hobby, or craft items.

VI. Time Limit To Appeal to the Consumer Advocate

    The Postal Service proposes to clarify the time limit in which a 
customer may forward an appeal to the Consumer Advocate, Headquarters. 
If the manager of Claims Appeals at the St. Louis Accounting Service 
Center (ASC) sustains a denial of a claim, any further appeal must be 
filed with the Consumer Advocate, within 60 days from the date of that 
decision.

VII. Valid Mailing Receipt

    The Postal Service proposes to clarify that the appropriate mailing 
receipt must be postmarked in order to be acceptable evidence of 
insurance.

VIII. COD Changes

    The Postal Service proposes to clarify that the mailer of a collect 
on delivery (COD) article may not stipulate ``CASH ONLY'' and that the 
recipient has the option to pay the charges by cash or personal check.
    Although exempt from the notice and comment requirements of the 
Administrative Procedure Act (5 U.S.C. 553(b), (c)) regarding proposed 
rulemaking by 39 U.S.C. 410(a), the Postal Service invites comments on 
the following revisions of the Domestic Mail Manual (DMM), incorporated 
by reference in the Code of Federal Regulations. See 39 CFR part 111.

List of Subjects in 39 CFR Part 111

    Administrative practice and procedure, Postal Service.

[[Page 72628]]

PART 111--[AMENDED]

    1. The authority citation for 39 CFR part 111 continues to read as 
follows:

    Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 414, 
416, 3001-3011, 3201-3219, 3403-3406, 3621, 3626, 5001.

    2. The following sections of the Domestic Mail Manual (DMM) are 
revised as set forth below:

Domestic Mail Manual (DMM)

* * * * *

S Special Services

S000 Miscellaneous Services

S010 Indemnity Claims

* * * * *
2.0 GENERAL FILING INSTRUCTIONS
2.1 Who May File
    A claim may be filed by:

[Reletter current items a, b, c, and d as new items b, c, d, and e. Add 
new item a to read as follows:]

    a. Only the sender, for the complete loss of an unnumbered, insured 
article.

[Revise new item b to read as follows:]
    b. Either the sender or addressee, who is in possession of the 
mailing receipt, for the complete loss of a registered, numbered 
insured, COD, or Express Mail article.
* * * * *
2.2 When to File
[Revise 2.2 to read as follows:]

    A customer must file a claim no later than 45 days from the mailing 
date when the contents of an article are damaged or missing from the 
mailing container. For a lost article, a customer must file a claim 
within the time limits in the chart below.

------------------------------------------------------------------------
                                                      When to file (from
                                                         mailing date)
                                                     -------------------
                Mail type or service                     No        No
                                                       sooner     later
                                                        than      than
                                                       (days)    (days)
------------------------------------------------------------------------
Bulk Insured........................................        21       180
COD.................................................        45       180
Express Mail........................................         7        90
Express Mail COD....................................        45        90
Insured.............................................        21       180
Registered..........................................        15       180
Registered COD......................................        45       180
------------------------------------------------------------------------

    Exceptions: Claims for loss of insured and COD articles (including 
insured articles sent to APO and FPO addresses) originating at or 
addressed to post offices outside the contiguous 48 states may be filed 
only:
    a. After 45 days if article sent First-Class Mail, space available 
mail (SAM), or parcel airlift (PAL) services.
    b. After 45 days if article sent COD.
    c. After 75 days if article sent by surface.
* * * * *
2.5 Evidence of Insurance
    For a claim involving registered, insured, COD, or Express Mail 
service, the customer must present any of the following evidence 
showing that the particular service was purchased:

[Revise item a to read as follows:]

    a. The original postmarked mailing receipt issued at the time of 
mailing (reproduced copies are not acceptable).
* * * * *
[Revise item c to read as follows:]

    c. The original sales receipt from an automated retail terminal 
listing the mailing receipt number and insurance amount, only if the 
original mailing receipt is not available (reproduced copies are not 
acceptable).
2.6 Evidence of Value
    The customer must submit acceptable evidence to establish the cost 
or value of the article at the time it was mailed. (Other evidence may 
be requested to help determine an accurate value.) Examples of 
acceptable evidence are:
* * * * *
[Revise item b to read as follows:]

    b. For items valued up to $100, the customer's own statement 
describing the lost or damaged article and including the date and place 
of purchase, the amount paid, and whether new or used (only if a sales 
receipt or invoice is not available). If the article is handmade, the 
statement must include the price of the materials. The statement must 
describe the article in sufficient detail to determine whether the 
value claimed is accurate.
* * * * *
[Add new item g to read as follows:]

    g. A copy of a canceled check, money order receipt, credit card 
statement, or other documentation indicating the amount paid.

[Add new item h to read as follows:]

    h. For Internet transactions conducted through a Web-based payment 
network, a computer printout of an online transaction identifying the 
purchaser and seller, price paid, date of transaction, description of 
item purchased, and assurance that the transaction status is completed.
2.7 Missing Contents
[Revise 2.7 to read as follows:]

    If a claim is filed because some or all of the contents are 
missing, the addressee must present the container and packaging to the 
Postal Service when a claim is filed. Failure to do so results in the 
denial of the claim.
2.8 Damage
[Revise 2.8 to read as follows:]

    If the addressee files the claim, the addressee must present the 
article with the packaging and mailing container to the Postal Service 
for inspection. If the sender files the claim, the St. Louis ASC will 
notify the addressee by letter to present the article, packaging, and 
container to the Postal Service for inspection. Failure to do so 
results in the denial of the claim.
2.9 Proof of Loss
[Revise introductory text and item a to read as follows:]

    To file a claim, the sender must provide proof of loss for 
unnumbered, insured mail. Proof of loss is not required for registered 
mail, numbered insured, COD, or Express Mail claims. Any one of these 
documents is acceptable:
    a. A letter or statement from the addressee, dated at least 21 days 
after the date that the unnumbered insured article was mailed, 
reporting that the addressee did not receive the article. The statement 
or a copy of it must be attached to the claim.
* * * * *
[Delete item c.]
2.10 Duplicate Claim
[Revise 2.10 to read as follows.]

    A customer must file any duplicate claim for any mail type or 
service within the following time limits:
    No sooner than 30 days and no later than 60 days from the date the 
original claim was filed.

[Delete the table.]
* * * * *
2.14 Nonpayable Claims
[Revise introductory text to read as follows:]

    Indemnity is not paid for collect on delivery (COD), insured mail, 
registered mail, or Express Mail services in these situations unless 
otherwise stated:
* * * * *
[Revise item r to read as follows:]

    r. Negotiable items (defined as instruments that can be converted 
to cash without resort to forgery), currency, or bullion except as 
provided in S911.2.0 for registered mail items or S010.2.12.c for 
Express Mail items.
* * * * *

[[Page 72629]]

[Add items ac through aj to read as follows:]

    ac. Mailer refusing to accept delivery of the parcel on return.
    ad. Mail not bearing the complete names and addresses of the sender 
and addressee, or not deliverable to either the addressee or sender.
    ae. Event tickets (e.g., nonrefundable tickets for concert, 
theater, sport, or similar events) received after the event and, for 
insurance purposes, insured for loss, not for delay or receipt after 
the event for which they were purchased.
    af. Software installed onto computers that have been lost or 
damaged.
    ag. Personal check remitted to the mailer for a COD article and not 
honored or otherwise payable by the financial institution upon which it 
is drawn. If the personal check is lost in transit, it is the mailer's 
responsibility to obtain a replacement check from the addressee. 
Indemnity to the mailer is limited to stop payment charges incurred by 
the addressee for the issuance of a replacement check, if the mailer 
establishes that the addressee incurred the charge and was reimbursed 
by the mailer for this amount.
    ah. Damaged articles not claimed within the prescribed time limits 
set forth in Postal Operations Manual 147.3.
    ai. Personal time used to make handmade, hobby, craft, or similar 
items.
* * * * *
3.0 PAYMENT
* * * * *
3.3 Dual Claim
[Revise 3.3 to read as follows:]

    If the sender and the addressee both claim insurance and cannot 
agree on which one should receive the payment, any payment due is made 
to the sender unless the claim has already been paid to the addressee 
upon presentation of the mailing receipt.
* * * * *
4.0 ADJUDICATION
* * * * *
4.2 Appeal
[Revise 4.2 to read as follows:]

    A customer may appeal a claim decision by filing a written appeal 
within 60 days of the date of the original decision. Except for an 
unnumbered, insured article, the customer must send the appeal directly 
to Claims Appeals (see G043 for address). For an unnumbered, insured 
article, the customer must send the appeal to the post office where the 
claim was filed. That post office forwards the appeal to the manager of 
Claims Appeal at the St. Louis ASC.
4.3 Final USPS Decision
[Revise 4.3 to read as follows:]

    If the manager of Claims Appeals at the St. Louis ASC sustains the 
denial of a claim, then the customer may submit an additional appeal 
within 60 days for final review and decision to the Consumer Advocate, 
Postal Service Headquarters, who may waive standards in S010 in favor 
of the customer.
* * * * *

S900 Special Postal Services

S910 Security and Accountability

* * * * *

S913 Insured Mail

* * * * *
2.0 MAILING
* * * * *
[Revise 2.7 to read as follows:]
2.7 Receipt
    For each insured article mailed, the mailer receives the 
appropriate postmarked receipt:
    a. Form 3813 when the insurance coverage is $50 or less.
    b. Form 3813-P when the insurance coverage is more than $50.
    c. Form 3877 when multiple accountable mail articles are mailed at 
one time.
* * * * *

S920 Convenience

* * * * *

S921 Collect on Delivery (COD) Mail

* * * * *
3.0 MAILING
* * * * *
3.4 Indelible Ink, Mailer Errors
[Revise 3.4 to read as follows:]

    The particulars required on the form must be filled in by hand with 
ink, typewritten, or computer printed. The Postal Service is not 
responsible for errors that a mailer makes in stating charges to be 
collected. The mailer can not stipulate ``CASH ONLY''. The recipient 
has the option to pay the charges by cash or personal check.
* * * * *
    An appropriate amendment to 39 CFR 111.3 to reflect these changes 
will be published if the proposal is adopted.

Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 02-30935 Filed 12-5-02; 8:45 am]
BILLING CODE 7710-12-P