[Federal Register Volume 69, Number 83 (Thursday, April 29, 2004)]
[Rules and Regulations]
[Pages 23436-23439]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-9750]


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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: May 1, 2004.

FOR FURTHER INFORMATION CONTACT: Jim Pretlow, 202-268-5389

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 Domestic Mail 
Manual (DMM) for filing indemnity claims, to clarify the standards for 
payment of claims, and to incorporate policies not currently set forth 
in the DMM. (Note: Two minor procedural changes contained in the 
proposed rule have been eliminated in the final rule: elimination of 
local adjudication and the ability to enter claims via the web. Also, 
the word ``sender'' has been changed to ``mailer''). One comment was 
received. After thorough consideration of 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 mailer 
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, collect on delivery (COD), or 
Express Mail article. Under past rules, only the mailer 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 mailer 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 and mailing container, 
including any wrapping, packaging, and any other contents that were 
received must be presented by the addressee to the Postal Service for 
inspection regardless of whether the mailer 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) 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.
    (3) Provide that initial appeals must be sent directly to Claims 
Appeals at the St. Louis Accounting Service Center (ASC), except 
appeals for unnumbered Insured Mail articles, which must be mailed to 
the Post OfficeTM where the claim was filed.
    (4) Clarify the time limit in which a customer may forward a final 
appeal to the Consumer Advocate at Headquarters.
    (5) Clarify that a mailer of a COD article may not stipulate ``Cash 
Only.''

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 commenter stated that the requirement for waiting 45 days 
before filing a claim for a lost COD article is excessive compared to 
the timeframe 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 mailer 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 items and 15 days for Insured 
Mail 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 date of 
mailing 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 mailer could not file a 
damage claim because the 45 days would have already passed.
    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

[[Page 23437]]

terminal imprinted receipts do not require a postmark. Therefore, the 
original postmarked receipt will be required for Insured Mail, 
Registered Mail, and COD items only. This is due to the fact that 
anyone can pick up a receipt in a Post Office lobby for Insured Mail or 
Registered Mail items and get a COD tag over the counter.
    The commenter also states that the requirement for the original 
receipt is inappropriate in the case of Registered Mail or Express Mail 
items 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. 
The Postal Service trains sales and services associates to be able to 
provide this information to customers. In addition, the Postal Service 
has taken steps to make this information available through a wide 
variety of public sources. This information is printed on the back of 
the mailing receipts. Customers may call our toll-free number for 
information at 1-800-ASK-USPS. The same information is also contained 
in the DMM, which can be accessed through http://pe.usps.gov.
    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, 
where 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 service 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 
service'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 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 Mail 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 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

[[Page 23438]]

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 (CFR). 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 mailer, for the complete loss of an unnumbered Insured 
Mail article.
    [Revise new item b to read as follows:]
    b. Either the mailer 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 article.
* * * * *

2.2 When To File

    [Revise 2.2 to read as follows:]
    A customer should file a claim immediately, but no later than 60 
days from the date of mailing, 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
                                             (in days)       (in days)
------------------------------------------------------------------------
Insured Mail............................              21             180
COD.....................................              45             180
Registered Mail.........................              15             180
Registered COD..........................              45             180
Express Mail............................               7              90
Express Mail COD........................              45              90
APO/FPO Insured (First-Class Mail, SAM,               45             180
 PAL, or COD)...........................
APO/FPO Insured (Surface Only)..........              75             180
------------------------------------------------------------------------

* * * * *

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 only, proof of loss. (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 or Registered Mail COD, the 
claimant must provide both the original COD receipt with either the 
Express Mail or the Registered Mail receipt. The customer must complete 
the applicable spaces on PS Form 1000.

2.5 Evidence of Insurance

    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:
* * * * *
    [Revise item a to read as follows:]
    a. The original mailing receipt issued at the time of mailing 
(Insured Mail, Registered Mail, and COD receipts must contain a USPS 
postmark). Reproduced copies are not acceptable.
* * * * *
    [Insert item d to read as follows:]
    d. The original sales receipt from the USPS 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

    [Revise introductory text to read as follows:]
    The customer, either the mailer or the addressee, 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 a to read as follows:
    a. Sales receipt, invoice or bill of sale, or statement of value 
from a reputable dealer.
    [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. For 
Internet purchases, a copy of the front and back of the canceled check, 
money order, or a copy of the credit card billing statement is 
required.
    [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, 
provide 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

[[Page 23439]]

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 mailing container, including 
any wrapping, packaging, and any contents that were received, 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 
damaged article and mailing container, including any wrapping, 
packaging, and any other contents that were received, to the USPS for 
inspection. If the mailer files the claim, the St. Louis ASC will 
notify the addressee by letter to present the damaged article and 
mailing container, including any wrapping, packaging, and any other 
contents that were received, 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:]
    The mailer must provide proof of loss for unnumbered Insured Mail 
only. Proof of loss is not required for numbered Insured Mail, 
Registered Mail, COD, or Express Mail claims. The mailer must present 
written and signed documentation from the addressee (such as a letter) 
dated at least 21 days from the date of mailing, stating the addressee 
did not receive the article.
    [Delete items a, b and c.]

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 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 mailer 
and addressee, or is undeliverable as addressed to either the addressee 
or mailer.
    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 and the loss 
is attributable solely due 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 the prescribed time limits 
set forth in Postal Operations Manual 146.3.
    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 mailer and the addressee both claim insurance and cannot 
agree on which one should receive the payment, any payment due is made 
to the mailer unless the claim has already been paid to the addressee 
upon presentation of the original mailing receipt.
* * * * *
4.0 ADJUDICATION
* * * * *

4.2 Appeal

    [Revise the first sentence of 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 Mail article, the customer must send the appeal 
directly to Claims Appeals at the St. Louis ASC (see G043 for address). 
For an unnumbered Insured Mail 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 Appeals 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, the customer may submit an additional appeal within 
60 days for final review and decision to the Consumer Advocate, USPS 
Headquarters (see G043 for address), 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

1.1 Description

    [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 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. 04-9750 Filed 4-28-04; 8:45 am]
BILLING CODE 7710-12-P