[Federal Register Volume 69, Number 172 (Tuesday, September 7, 2004)]
[Rules and Regulations]
[Pages 54005-54006]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-20185]


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POSTAL SERVICE

39 CFR Part 111


Eligibility Requirements for Certain Nonprofit Standard Mail 
Material

AGENCY: Postal Service.

ACTION: Final rule.

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SUMMARY: In this final rule, the Postal Service adopts an amendment to 
Domestic Mail Manual standards governing insurance advertising in 
Nonprofit Standard Mail. The amendment sets forth guidelines for 
determining whether the coverage provided by an insurance policy 
offered by an authorized nonprofit organization to its members is not 
generally otherwise commercially available.

DATES: Effective September 8, 2004.

FOR FURTHER INFORMATION CONTACT: Jerome M. Lease, Mailing Standards, 
United States Postal Service, 202-268-7264.

SUPPLEMENTARY INFORMATION: In a proposed rule published in the Federal 
Register on June 15, 2004 (69 FR 33341), the Postal Service proposed an 
amendment to Domestic Mail Manual (DMM) E670.5.5, which provides 
guidelines for determining whether insurance solicitations are eligible 
to be mailed at Nonprofit Standard Mail rates (``nonprofit rates''). 
The Postal Service has determined to adopt the proposed amendment. The 
change sets forth additional circumstances where the coverage provided 
by a general type of insurance, such as homeowner's, property, 
casualty, marine, and professional liability, would be considered not 
generally otherwise commercially available and, accordingly, mail 
promoting that coverage would be eligible to be mailed at Nonprofit 
Standard Mail rates.
    Mailings permitted at nonprofit rates according to the policies in 
effect since 1991 will continue to be eligible for the nonprofit rates. 
These include, as discussed in the proposal, material promoting 
charitable gift annuities and material promoting insurance to a target 
group that does not otherwise have a source to obtain that type of 
coverage. The change amends the DMM to clarify that section E670.5.5 
does not restrict the use of the nonprofit rates for mailings of an 
authorized fraternal benefit society or any other nonprofit 
organization when the material advertises, promotes, or offers 
insurance that is underwritten by the nonprofit organization itself. 
Nor does it restrict the use of the nonprofit rates for mailings of an 
authorized organization's material that advertises, promotes, or offers 
insurance, if the coverage is provided or promoted by the nonprofit 
organization to its members, donors, supporters, or beneficiaries in 
such a way that those parties may make tax-deductible donations to the 
organization of their proportional shares of income in excess of costs 
that the nonprofit organization receives from the purchase of the 
coverage by its members, donors, supporters, or beneficiaries. The 
changes take into account court rulings, the Postal Service 
Appropriations Act of 1991, and related legislative history.
    As explained in the proposal, mailings that are ineligible for 
Nonprofit Standard Mail rates under the cooperative mail rule or other 
standards remain ineligible for nonprofit rates, regardless whether 
they violate the amended standards related to insurance. Moreover, 
mailers continue to bear the burden to substantiate that mailings 
qualify for nonprofit rates, and may be asked to provide evidence to 
support eligibility for those rates before a mailing is accepted.
    The Postal Service received one comment concerning its proposal. 
This comment supported the amendments proposed by the Postal Service.
    Accordingly, for the reasons explained here and in the notice 
proposing the amended standard, the Postal Service adopts the rule as 
proposed.

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. Revise the Domestic Mail Manual (DMM) as set forth below:

E Eligibility

* * * * *

E600 Standard Mail

* * * * *

E670 Nonprofit Standard Mail

* * * * *
5.0 ELIGIBLE AND INELIGIBLE MATTER
* * * * *

5.5 Definitions, Insurance

    [Revise 5.5 to read as follows:]
    For the standard in 5.4b:
    a. Except as specified in 5.5c, the phrase not generally otherwise 
commercially available applies to the actual coverage stated in an 
insurance policy, without regard to the amount of the premiums, the 
underwriting practices, and the financial condition of the insurer. 
When comparisons are made with other policies, consideration is given 
to coverage benefits, limitations, and exclusions, and to the

[[Page 54006]]

availability of coverage to the targeted recipients. When insurance 
policy coverages are compared to determine whether coverage in a policy 
offered by an organization is not generally otherwise commercially 
available, the comparison is based on the specific characteristics of 
the mailpiece recipients (e.g., geographic location or demographics).
    b. Except as specified in 5.5c, the types of insurance considered 
generally otherwise commercially available include, but are not limited 
to, homeowner's, property, casualty, marine, professional liability 
(including malpractice), travel, health, life, airplane, automobile, 
truck, motorhome, motorbike, motorcycle, boat, accidental death, 
accidental dismemberment, Medicare supplement (Medigap), catastrophic 
care, nursing home, and hospital indemnity insurance.
    c. Coverage is considered not generally otherwise commercially 
available if either of the following conditions applies:
    (1) The coverage is provided by the nonprofit organization itself 
(i.e., the nonprofit organization is the insurer).
    (2) The coverage is provided or promoted by the nonprofit 
organization in a mailing to its members, donors, supporters, or 
beneficiaries in such a way that the members, donors, supporters, or 
beneficiaries may make tax-deductible donations to the nonprofit 
organization of their proportional shares of any income in excess of 
costs that the nonprofit organization receives from the purchase of the 
coverage by its members, donors, supporters, or beneficiaries.
* * * * *
    An appropriate amendment to 39 CFR part 111 will be published to 
reflect these changes.

Neva R. Watson,
Attorney, Legislative.
[FR Doc. 04-20185 Filed 9-3-04; 8:45 am]
BILLING CODE 7710-12-P