[Federal Register Volume 68, Number 169 (Tuesday, September 2, 2003)]
[Rules and Regulations]
[Pages 52100-52104]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-22047]


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POSTAL SERVICE

39 CFR Part 111


Indemnity Claims for Domestic Mail

AGENCY: Postal Service.

ACTION: Final rule.

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SUMMARY: This final rule amends the regulations for indemnity claims as 
set forth in the Domestic Mail Manual (DMM) S010, Indemnity Claims and 
related provisions of DMM S913, Insured Mail and DMM S921, Collect on 
Delivery (COD) Mail. Other than the changes concerning time periods for 
filing claims and retention periods for undelivered accountable mail, 
the changes clarify existing DMM provisions or codify, in the DMM, 
policies not currently set forth in that manual.

DATES: This rule becomes effective on October 1, 2003.

FOR FURTHER INFORMATION CONTACT: Gilbert LeMarier, 202-268-4632.

SUPPLEMENTARY INFORMATION: In a proposed rule published in the Federal 
Register on December 6, 2002 [Vol. 67, No. 235, pages 72626-72629], the 
Postal Service proposed to revise the procedures in the DMM for filing 
indemnity claims, to clarify the standards for payment of claims, and 
to incorporate policies not currently set forth in the DMM. One comment 
was received. After thorough consideration to the issues raised in this 
comment, the Postal Service adopts the proposed revisions with the 
modifications discussed below.
    The revisions to the procedures for filing claims are made in 
conjunction with the redesign of the Postal Service's claim system and 
are intended to facilitate the provision of more timely decisions to 
Postal Service customers' claims. For example, customers are permitted 
to file claims sooner in some circumstances, thereby allowing decisions 
to be made closer to the mailing date. In addition, either the sender 
or the addressee, whoever is in possession of the original mailing 
receipt, will be permitted to file a claim for the complete loss of a 
numbered Insured Mail, Registered Mail\TM\, COD, or Express Mail[reg] 
article. Under past rules, only the sender was permitted to submit such 
claims. The revisions do not change the procedures for unnumbered 
Insured Mail articles (insured for $50 or less). As before, only the 
sender will be allowed to file a claim for the complete loss of an 
unnumbered Insured Mail article.
    The revisions also provide further clarification of what is 
acceptable evidence of value, codifying current policies into the DMM. 
Claims for damage require that the article, packaging, and mailing 
container must be presented by the addressee to the Postal Service for 
inspection regardless of whether the sender or addressee files the 
claim.
    The new revisions will also:
    (1) Clarify situations under which indemnity will not be paid, 
ensuring that current policies are codified in the DMM.
    (2) Clarify the time limit in which a customer may forward an 
appeal to the Consumer Advocate at Headquarters.
    (3) Provide that the original sales receipt from a Postal Service 
retail terminal listing the mailing receipt number and insurance amount 
is acceptable evidence of insurance when the original mailing receipt 
is not available.
    (4) Clarify that a mailer of a collect on delivery (COD) article 
may not stipulate ``Cash Only.''
    (5) Provide that all appeals must be sent directly to Claims 
Appeals at the St. Louis Accounting Service Center.
    (6) Provide that local adjudication of unnumbered Insured Mail 
articles will end with the implementation of the Customer Claims 
Response System (CCRS).

Discussion of Comments

    A summary of the comments and our analysis of each follows:
    1. S010.2.2. The commenter raised two issues regarding the changes 
in the time for filing a claim for a lost or damaged COD article. 
First, the

[[Page 52101]]

commenter stated that the requirement for waiting 45 days before filing 
a claim for a lost COD article is excessive compared to the time frame 
for mail receiving other special services.
    The Postal Service does not believe the proposed rule should be 
changed. Since handling procedures differ depending on the special 
service provided, it is inappropriate to establish uniform limits for 
filing claims. A COD article may be held at a delivery unit for up to 
30 days before being returned to the sender if unclaimed by the 
addressee (see DMM, D042.1.7.f). It should also be noted, the Postal 
Service proposal reduced the current waiting period for filing a claim 
for a lost COD article from 60 days to 45 days. As for other classes of 
mail or service, the new time frames took into consideration that the 
holding period is 5 days for Express Mail and 15 days for Insured Mail 
items or Registered Mail items.
    Secondly, the commenter objected to the new requirement that 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 
container. The commenter states that if the COD article were not 
delivered until the 45th day after mailing, the sender could not file a 
damage claim because the 45 days would have already passed.
    Although the likelihood of the commenter's hypothetical occurring 
is remote, the Postal Service believes there is merit in the concern 
raised. Accordingly, the Postal Service will revise the proposed rule 
to allow customers to submit damage claims no later than 60 days from 
the mailing date.
    2. S010.2.5.a. The commenter states that the requirement for the 
original postmarked mailing receipt is inappropriate in that not all 
receipts will be postmarked.
    The Postal Service agrees that it erred in that Express Mail and 
point of service (POS) retail terminal imprinted receipts do not 
require a postmark. Therefore, the Postal Service withdraws this 
proposed rule.
    The commenter also states that the requirement for the original 
receipt is inappropriate in the case of Registered Mail or Express Mail 
service when the Postal Service has a copy of the mailing receipt, and 
can validate the claim because the mailer has provided the article 
number and date of mailing either from a photocopy or from other 
records.
    The Postal Service does not believe the rules should be amended to 
accommodate this suggestion. The requirement for the original receipt 
is to ensure that the proper party is indemnified. It is the customer's 
responsibility to provide the proof of insurance evidenced by an 
original mailing receipt. Moreover, under existing procedures, mailers 
utilizing these services are also permitted to submit the mailing 
wrapper as evidence of insurance.
    3. S010.2.6.b. The commenter states that the addition of the 
phrase, ``For items valued up to $100,'' appears to be a major change. 
The Postal Service maintains this revision does not represent a change 
in policy but merely codifies current policy. Acceptance of a 
customer's statement of value, in lieu of actual evidence of value, 
creates an opportunity for abuse, particularly when permitted for 
higher-value items.
    The commenter also suggests that Postal Service retail clerks 
should inform mailers what evidence will be needed to support claims. 
Mailers needing such information have access to policies concerning 
indemnity claims through the DMM, which is readily available on the 
Postal Service's Web site. They can also seek such information from 
Postal Service clerks or other Postal Service personnel.
    The commenter also asserts that eliminating reimbursement of the 
cost of labor from handmade items is too broad. The Postal Service 
offers coverage for the value of goods, based on the established value 
in the marketplace, whether or not those goods are handmade. However, 
if the item mailed is not commonly sold (e.g., a hobby, craft, or 
similar handmade item), there is no established value. In that case, 
the Postal Service provides compensation for the costs of the materials 
used, but not for the time used in making it. The Postal Service will 
amend the proposed rule to clarify this policy.
    4. S010.2.6.h. The commenter requests clarification of this 
proposed rule referring to a printout of a transaction that is made on 
the Internet. This comment pertains to the proposal for the provision 
of evidence of value for goods obtained through Internet transactions. 
These transactions are typically conducted through a Web-based payment 
network that offers payment services through a stored value account, 
commonly used to buy or sell items at online auctions.
    For transactions involving the use of a credit card online or 
payment by check, a copy of a credit card statement or canceled check 
could serve as evidence of value. The Postal Service will amend the 
proposed rule to clarify this policy.
    5. S010.2.14.r. The commenter states that this section appears to 
require the use of Registered Mail for obtaining insurance on 
negotiable items, currency, or bullion, which would be a change in 
current policy.
    Although the Postal Service generally recommends that customers 
send these items as Registered Mail items, it did not intend to 
eliminate the option of mailing them as Insured Mail items. 
Accordingly, in order to avoid confusion, the Postal Service will 
withdraw this proposed change to the DMM.
    6. S010.2.14.ae. The commenter objects to the proposed regulation 
that event or transportation tickets, received after the event, are not 
insured when there is a provable loss because of the delay and the 
article was mailed using Express Mail service. With Express Mail's 
guaranteed delivery time, if the article is not delivered by that time, 
and a provable loss results from the delay in delivery, then, the 
commenter argues, the loss should be covered by Postal Service 
insurance.
    The commenter raised a valid concern and the final rule 
incorporates an exception for Express Mail service.
    7. S010.2.14.af. The commenter objects to this revision regarding 
nonpayable claims for software installed onto computers that have been 
lost or damaged. The commenter states that if one paid to have software 
loaded on the lost or damaged computer, then the insurance should cover 
the cost of having the same software installed on a replacement 
computer. In addition, if software, recorded on compact disc or 
diskette(s), enclosed with the computer when shipped, is also lost or 
damaged, it should be covered by the insurance purchased.
    The Postal Service does not believe a change in the rule is 
warranted. Software loaded onto personal computers is licensed for use 
to the purchaser. Whether on compact disc or diskette(s), the software 
provides the purchaser the ability to reinstall the software on a 
computer. Software is generally designed to self load when the 
appropriate drive is selected with limited prompting or assistance from 
an individual. Also, a replacement personal computer typically will 
include replacement software. Software on a medium, such as compact 
discs or diskettes, recognized as a means to load the software onto a 
computer, would be covered for loss or damage dependent upon the amount 
of insurance coverage purchased at the time of mailing.
    8. S010.2.14.ag. The commenter observes that this proposed rule 
does not comply with the provisions stated in S921.1.5, Fee and 
Postage, in that it states that if the mailer does not receive the 
personal check that was mailed by

[[Page 52102]]

the delivery Post Office, it will be the mailer's responsibility to 
obtain a replacement check from the addressee. The fees for COD service 
include insurance against failure to receive a postal money order or 
the recipient's check.
    The Postal Service agrees that the proposed rule is in conflict 
with S921.1.5, and, therefore, the proposed rule is withdrawn.
    9. S010.2.14.ai. The commenter states that the concept of personal 
time should be clarified.
    The commenter previously raised this issue in item 3 and it was 
addressed by the Postal Service above.
    10. S913.2.7. The commenter raises the same issue as identified in 
item 2 regarding the requirement that all mailing receipts have a 
postmark (round date).
    The Postal Service does not believe the proposed rule should be 
changed. This revision relates to Insured Mail receipts, PS Form 3813, 
Receipt for Domestic Insured Parcel, or PS Form 3813-P, Insured Mail 
Receipt. There is an area on each of these receipts annotated either 
``Postmark of Mailing Office,'' or ``Postmark Here,'' that clearly 
indicates that a postmark (round date) or point of service (POS) retail 
terminal imprint, which includes a date, is required. Because these 
Postal Service mailing receipts are readily available in retail 
lobbies, a postmark or POS retail terminal imprint is required in order 
to provide validation that the special service was actually purchased.
    Based on the reasons discussed above, the Postal Service hereby 
amends the following standards of the DMM, incorporated by reference 
into the Code of Federal Regulations. See 39 CFR part 111.

List of Subjects in 39 CFR Part 111

    Administrative practice and procedure, Postal Service.

PART 111--[AMENDED]

0
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.

0
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 
Mail article.

[Revise new item b to read as follows:]

    b. Either the sender or addressee, who is in possession of the 
original mailing receipt, for the complete loss of a numbered Insured 
Mail, Registered Mail, COD, or Express Mail[reg] article.
* * * * *

2.2 When to File

[Revise 2.2 to read as follows:]

    A customer must file a claim immediately but no later than 60 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 sooner than         No later than
------------------------------------------------------------------------
Bulk Insured................  21 days.............  180 days
COD.........................  45 days.............  180 days
Express Mail................  7 days..............  90 days
Express Mail COD............  45 days.............  90 days
Insured Mail................  21 days.............  180 days
Registered Mail.............  15 days.............  180 days
Registered Mail COD.........  45 days.............  180 days
------------------------------------------------------------------------

    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 at the following times:
    a. After 45 days if article sent First-Class Mail service, 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.

2.3 Where to File

    A claim may be filed:
* * * * *
[Insert item c to read as follows:]

    c. On the Web at http://www.usps.com.

2.4 How to File

[Revise 2.4 to read as follows:]

    A customer may file a claim by presenting evidence of insurance, 
evidence of value, proof of damage, and for unnumbered Insured Mail 
claims, proof of loss or damage. (Proof of loss is not required for 
numbered Insured Mail, Registered Mail, COD, or Express Mail claims.) 
If the article was mailed Express Mail COD, the sender must provide 
both the original COD and Express Mail receipts. The customer must 
complete the applicable spaces on Form 1000.

2.5 Evidence of Insurance

[Revise introductory text to read as follows:]

    For a claim involving Insured Mail, Registered Mail, COD, or 
Express Mail service, the customer must present any of the following 
evidence showing that the particular service was purchased:
* * * * *
[Insert new item d to read as follows:]

    d. The original sales receipt from the USPS[reg] listing the 
mailing receipt number and insurance amount, if the original mailing 
receipt is not available. Reproduced copies of the USPS sales receipt 
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

[[Page 52103]]

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 the item was new or used 
(only if a sales receipt or invoice is not available). If the article 
mailed is a hobby, craft, or similar handmade item, the statement must 
include the cost of the materials used in making the item. 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 that offers payment services through a stored value account, 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. The 
printout must clearly identify the Web-based payment network provider 
through which the Internet transaction was conducted.

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 
USPS with the claim. Failure to do so will result in 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 USPS 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 USPS for inspection. Failure to do so will result in 
denial of the claim.

2.9 Proof of Loss

[Revise 2.9 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 numbered 
Insured Mail, Registered Mail, COD, or Express Mail claims. For proof 
of loss, the addressee must provide a letter or statement, dated at 
least 21 days after the date that the unnumbered Insured Mail 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.

2.10 Duplicate Claim

[Revise 2.10 to read as follows:]

    A customer must file any duplicate claim 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 Insured Mail, Registered Mail, COD, or 
Express Mail services in these situations:
* * * * *
[Add items ac through ah to read as follows:]

    ac. Mailer refuses to accept delivery of the parcel on return.
    ad. Mail not bearing the complete names and addresses of the sender 
and addressee, or that is undeliverable as addressed to either the 
addressee or sender.
    ae. Event or transportation tickets (e.g., concert, theater, sport, 
airline, bus, train, etc.) received after the event date. Such items 
are insured for loss, but not for delay or receipt after the event date 
for which they were purchased unless sent by Express Mail service and 
the loss is attributable solely to the failure to meet the guaranteed 
delivery standard under the terms and conditions for the Express Mail 
offering selected.
    af. Software installed onto computers that have been lost or 
damaged.
    ag. Damaged articles not claimed within 30 days.
    ah. Personal time used to make hobby, craft, or similar handmade 
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 original mailing receipt.
* * * * *
4.0 ADJUDICATION

4.1 Initial

[Revise 4.1 to read as follows:]

    The St. Louis Accounting Service Center (ASC) adjudicates and pays 
or disallows all domestic claims except those appealed under 4.3.

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. The customer must 
send the appeal directly to Claims Appeals (see G043 for address).

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, the customer may submit an additional appeal within 
60 days for final review and decision to the Consumer Advocate, USPS 
Headquarters, who may waive the standards in S010 in favor of the 
customer.

[Delete 5.0. Sampling process will be discontinued with the 
implementation of CCRS.]

* * * * *

S900 Special Postal Services

S910 Security and Accountability

* * * * *

S913 Insured Mail

* * * * *
2.0 MAILING
* * * * *

2.7 Receipt

[Revise 2.7 to read as follows:]

    For each Insured Mail article mailed, the mailer receives a USPS 
sales receipt and the appropriate postmarked (i.e., round date) Insured 
Mail form as follows:
    a. Form 3813 when the insurance coverage is $50 or less.
    b. Form 3813-P when the insurance coverage is more than $50.
* * * * *

S920 Convenience

S921 Collect on Delivery (COD) Mail

1.0 BASIC INFORMATION

[Insert text after first sentence to read as follows:]

    * * * The recipient has the option to pay the COD charges using 
either cash or personal check. Only one form of

[[Page 52104]]

payment may be used for a single mailpiece. * * *
* * * * *
3.0 MAILING
* * * * *

3.4 Indelible Ink, Mailer Errors

[Revise 3.4 to read as follows:]

    The particulars required on the COD form must be handwritten with 
ink, typewritten, or computer-printed. The USPS is not responsible for 
errors that a mailer makes in stating the charges to be collected. The 
mailer cannot stipulate ``Cash Only'' on the COD form.
* * * * *
    We will publish an appropriate amendment to 39 CFR 111.3 to reflect 
these changes.

Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 03-22047 Filed 8-29-03; 8:45 am]
BILLING CODE 7710-12-P