M29-l, Part II

Advance Manual Change No. 1-87 September 15, 1987

[Chapter 7. Refunds]{.underline}

A. [Change:]{.underline} M29-l Part II, Chapter 7. This change adds an
additional\
condition for the need to process a refund manually. The\
system is designed to accomodate a refund from the pending\
transaction area, if the amount does not exceed *\$9999.99.* Any\
combination of pending amounts and/or amounts being inserted\
to the pending transaction area that exceeds *\$9999.99,* [must
be]{.underline}\
refunded manually via VA Form 4-706, notice of refund\
worksheet. If an erroneous attempt is made to disburse\
amounts exceeding *\$9999.99* from the pending area, the pending\
transaction refund program will attempt to combine the\
amounts, so that a single amount will be disbursed. This\
amount is then reinserted to the pending area for immediate\
refund. The problem is that the pending amount field can only\
accomodate six positions. Therefore, the high order position\
of the refund amount will be truncated, causing a \$10,000 out\
of balance condition. EXAM: Combined amounts totalling\
\$12,000.00 will be reinserted by the system as a \$2,000.00\
amount.

B. [Procedure]{.underline}: Page 7-2, add to subparagraph 7. 02b the
following manual processing condition:

\(7\) A combination of refund amounts exceeds *\$9,999.99.*

C. New or Revised

[Insurance Forms]{.underline}: None.

PAUL F. KOONS

Assistant Director for Insurance

[Distribution]{.underline}

335/29 92\
310/290 51\
310/291 l\
310/292 142\
310/295 67

310/Library l

CO/311D 2

M29-I, Part II

Advance Manual Change No. 15-84 December 21, 1984

[Chapter 7. Refunds]{.underline}

A. [Change:]{.underline} M29-1, Part 11, Chapter 7. This change removes
the \$350.00\
refund threshold for processing an off-tape (VAF 4-706) refund\
amount to an incompetent policyholder, except for Philippine\
fiduciary accounts. An ADP program modif ication has been\
installed to extend the \$350.00 on tape refund restriction (for\
incompetent veterans with guardian appointed) to \$9999.99. The\
ADP system will now allow a transaction type 008 and/or\
transaction type 088 refund to be processed from the pending\
transaction area on the RPO. The requirement to secure current\
certification of guardian remains unchanged.

B. [Procedure]{.underline}: Page 7-2, delete subparagraph 7.O2b(2) and
substitute the following:

\(2\) Philippine fiduciary account.

Page 7-3, delete subparagraph 7.O3f(1)

C. New or Revised

[Insurance Forms]{.underline}: None

ROBERT W. CA

Assistant Director for Insurance

[DISTRIBUTION]{.underline}:

335/29 92\
310/290 51\
310/291 111\
310/Library j\
2O3/SDA 2\
CO/311D 2

February 13,1979 M29-

Change 15

CONTENTS

CHAPTER 7. REFUNDS

PARAGRAPH PAGE\
7.01 General 7-1\
7.02 Processing Refunds 7-I\
7.03 Disbursements to Incompetent Insureds 7-3\
7.04 Control of Pending Refunds 7-3\
7.05 Processing Refunds Without Insurance Folder 7-4

7-j

**September** 30, 1977 M29-1, **Part** ll.\
Change 14

CHAPTER 7. REFUNDS

7.01 GENERAL

a\. Refunds are automatically initiated **by** the system in the
following instances:

\(l\) Final lapse action is taken automatically and there is a credit of
\$1 or more, including any remaining dividend credit balance, and there
are no pending posting transactions.

\(2\) When a repayment of a loan or lien exceeds the actual amount due
by \$1 or more on single policy cases with no other indebtedness
involved. The amount not applied will appear as a pending transaction
with a transaction **type** in the 300 series and a 609 callup.
Disbursements are also automatic when both the transaction type and
callup type are 609. Disbursement will be made by the system on the
callup date.

\(3\) When a permanent **plan** limited-pay life policy is paid to the
end of the premium-paying period and there is a credit of \$1 or more.

b\. When the system initiates a disbursement and fails to complete
action, it will cause a VA Form 29-5886b, Insurance Record Printout, to
be generated with a reason code in the 600 series. Clerical action is
required to correct the condition which prevented the system **from
making** the disbursement or to take any action which the system is not
programed to accomplish.

c\. When a refund is authorized manually or processed by the system with
clerically prepared input, and it is necessary to eliminate an overage
or a shortage, the following will apply:

\(I\) **Direct** Pay **Accounts.** In a routine refund, a history lookup
will not be required when including overages \_\_\_\_\_ of less than 90
percent of a monthly premium, or deducting shortages of not more than 30
percent of a monthly

**premium,** except when the overage or shortage appears to be
questionable. This applies only to amounts shown in the Credit or
Shortage field of the Premium segment of the record printout. An overage
or shortage will not be included in the refund calculations if the
insured has been or will be advised of the amount on a premium notice
(billing callup within 30 days of refund).

\(2\) **Deduction Accounts.** If the amount of the overage does not
exceed a monthly premium or a shortage is less than \$l, it will not be
necessary to verify the amount. If the overage is more **than** a
monthly premium or the shortage is in excess of \$l, the amount will be
verified by history lookup or any other means available.

7.02 PROCESSING REFUNDS

a\. When processing refunds, the following input documents may be
required to initiate disbursements, adjust the master record and insert
and delete pending transactions. These documents will be completed as
outlined in MP-6, **part** II, supplement Nos. 2.1 and 2.2.

\(l\) VA Form 29-5895a, Pending Transaction Input Card, or VA Form
29-8526, Pending Transaction, to delete or insert pending transactions.

\(2\) VA Form 29-5893a, Premium Input Card, or VA Form 29-8523,
Premium/TDIP, to update the premium segment in the master record.

\(3\) VA Form 29-5892a, Policy Input Card, or VA Form 29-8522, Policy,
to insert or change policy information in the master record.

b\. Refunds are authorized manually or can be processed by the system as
initiated with various clerically prepared input documents. VA Form
4-706, Notice of Refund and Refund Worksheet, will be prepared **to**
authorize the refund manually when one of the following conditions
exists:

\(l\) Account is not on tape.

7-1

M29-1, Part II **September** 30, 1977

Change 14

\(2\) Fiduciary case involved, and amount of refund is \$350 or more, or
a Philippine fiduciary account, regardless of the amount.

\(3\) A third-party refund is involved.

\(4\) An immediate refund is required, and a life or policy freeze
prohibits accomplishing the refund on tape.

\(5\) Refund cannot be accomplished on tape because refund date is after
the action date on RPO.

\(6\) Insured requests refund of an amount less than \$1.

NOTE: When processing refunds manually and there is a master record on
tape, prepare the appropriate input to adjust the master record.

c\. When a request for refund of unearned premiums or PIR (Pure
Insurance Risk) is received, request an RPO and freeze the master
record. Refunds of a pending posting or disbursement transaction do not
require that the master record be frozen. When the refund involves PIR,
computation of the amount due will be requested on VA Form 29-320,
Request for Calculation, overprinted for that purpose.

d\. To initiate the disbursement of the full amount of a pending \[item
in the\] (200 series transaction type) \[on how paid codes other than 5,
7, 8 or 9, or pending items in the (300 and 600 series\] transaction
type) by the system, prepare input document using transaction type 088,
for each transaction to be refunded. The refund will be made by the
system even if the master record is frozen. \[It is not necessary to
obtain the insurance folder when this transaction is being used.\]

e\. When only a part of a pending posting or disbursement transaction is
to be refunded, prepare input document(s) with transaction type 098, to
delete the pending transaction, and transaction type 008 to insert a
pending disbursement for the amount to be refunded. If the part to be
retained is to be applied as premium, prepare input document with
transaction type 083 to update the next premium due date on the master
record. If applied on a loan or lien indebtedness, prepare input
document with transaction type 008, to insert the amount as a pending
300 or 302 posting transaction.

f\. To insert a pending disbursement transaction, prepare input document
with transaction type 008. The refund will be made on the callup date if
both pending transaction and callup type are 609. The amount inserted as
a pending disbursement may be a combination of the following:

\(I\) Overages in the credit field on the premium segment.

\(2\) Unearned premiums.

\(3\) PIR credits.

\(4\) Section 712 or 748 waiver credits.

g\. When refunding unearned premiums, prepare input documents with
transaction type 083, to correct the master record and make the
necessary adjustments of control accounts. If TDIP (total disability
insurance provision) is involved, use transaction type 087 to correct
the TDIP segment and make necessary adjustments of control accounts. To
change PIR or section 724 waiver information, it will be necessary to
prepare an input document using transaction type 082.

h\. When \[VA Form 4-706, is used to initiate a refund and the RPO
(record printout) is not being used as an input document\], the amount
to be refunded will be clearly indicated on the RPO and circled in red
ink. The RPO will be noted to show: F-706, REAU, the date and the name
of the clerk initiating the refund. \[It is not

necessary to prepare a refund flash reference slip.\] The input
documents, RPO, insurance folder and other related \_\_\_ material will
be sent to the Voucher Audit \[activity\] for review and verification.

7-2

February 10,1975 M29-1, Part II\
Change 12

h\. When input documents and/or a VA Form 4-706 are prepared, the amount
to be refunded will be clearly indicated on the RPO and circled in red
ink. The RPO will be noted to show 4-706 REAU, the date and the name of
the clerk initiating the refund. The input documents, RPO, insurance
folder and other related material will be sent to the Voucher Audit Unit
for review and verification.

7.03 DISBURSEMENTS TO INCOMPETENT INSUREDS

a\. The system will automatically disburse payments to the legal
guardian of an incompetent insured, if the amount is less than \[\$250\]
and it is not a Philippine fiduciary account. An RPO will be generated
with reason code 672.

b\. The system will establish a pending disbursement transaction with a
970 callup code when any of the following conditions are indicated on
the master record:

\(l\) The insured is incompetent but no legal guardian has been
appointed.

\(2\) The amount of the disbursement is \[\$250\] or more.

\(3\) Philippine fiduciary account, regardless of amount.

c\. VA Form 29-505, Request for Information, will be prepared and
released to the (Veterans Services Officer\] of the regional office
involved, in the following instances:

\(l\) No legal guardian has been appointed.

\(2\) A current certification of guardianship is required when the
amount of disbursement is (\$250\] or more. Certifications for these
disbursements must be no more than 6 months old. If more than 6 months
old, a current certification must be obtained. The certification of
guardianship may be authorized in a letter from the Veterans Services
Officer, VA Form 27-555, Certification of Legal Capacity To Receive and
Disburse Benefits, or other

suitable forms.

d\. VA Form 29-504, Notice of Payment Due Incompetent Veteran, will be
clerically prepared and released to the (Veterans Services Officer\] of
the regional office involved, when any disbursement is processed
clerically or automatically by the system.

NOTE: VA Form 29-504 will not be released to the \[Veterans Services
Officer\] of the regional office involved when the Director of a VA
hospital or domiciliary has been designated the fiduciary.

e\. VA Form 4-706 will be clerically prepared to disburse the following:

\(l\) Refunds of (\$250\] or more after current certification has been
received.

\(2\) refunds, regardless of amount, on Philippine fiduciary accounts.
These forms must be addressed to the guardian in care of the \[Veterans
Services Officer\] , Manila regional office.

7.04 CONTROL OF PENDING REFUNDS

a\. A positive control (see subpar. b below) over pending refunds will
be limited to those cases in which:

\(l\) A dictated letter was sent to the insured containing a specific
promise of refund.

\(2\) An inquiry is received from an insured who refers to a previous
unanswered request for a refund.

\(3\) An underwriting application, other than new issue, is disapproved
and a form or dictated letter is released

a promising the applicant a refund.\
b. A VA Form 29-5895a, or 29-8526 transaction type 008, will be used to
insert a nonfreeze refund diary

with a 15-day callup date.

7-3