December 28, 1972 M29-1, Part II\
Change 8

CONTENTS

CHAPTER 29. ALLOTMENT ACCOUNTS

PARAGRAPH PAGE\
29-I

29.01 General 29-1\
29.02 Reporting of Allotment transactions\
29.03 Computer processing of Allotment Transactions\
29.04 Clerical processing of Allotment Transactions 29-6\
29.05 Clerical processing of Requests for Distribution 29-12\
29.06 Use of RPO To Secure Allotment Information 29-13\
29.07 Direct Payments Received on Allotment Accounts 29-15\
29.08 processing of Renewed Term Accounts With Allotment shortage -
29-16\
29.09 processing of Converted Accounts With Allotment shortage 29-18\
29.10 Class E Allotment 29-21\
29.11 Adjustment of Allotments 29-21

29-i

VA Regional Office and Insurance Center Circular 29- 86-1

Philadelphia, PA January 2, 1986

[1986 ALLOTMENT PROCESSING SCHEDULE]{.underline}

1\. ORGANIZATIONAL ELEMENTS AFFECTED: Insurance Operations Div. -
VAROIC\
Operations Division - VARDPC

2\. REFERENCES: M29-1, Part II, Chapter 29

3\. PURPOSE: To furnish 1986 cut-off dates covering the preparation and\
transmission of the monthly magnetic transaction tape to the\
appropriate Service Departments. The Service Departments are:\
Army, Navy, Air Force, Marine Corps, Coast Guard, Army Retired\
and Air Force Retired.

4\. PROCEDURE:

a\. The monthly magnetic transaction tape will be transmitted in the
calendar month preceding the accounting month during which the
transactions are to be effected.

b\. Allotment requests stored in the Temporary Data File on the
Insurance Terminal System will be sent to the Input Unit, Philadelphia
DPC in accordance with the following cut-off schedule:

REGISTER ENTER ADP GENERATED MAILED TO

[MONTH]{.underline} [BY]{.underline} [ALLOTMENT REQUESTS]{.underline}
[SERVICE DEPARTMENTS]{.underline}

JAN. 1986 01-03-86 01-03-86 01-06-86\
FEB. 1986 02-05 02-05 02-06\
MAR. 1986 03-05 03-05 03-06\
APR. 1986 04-03 04-03 04-04\
NAY 1986 05-05 05-05 05-06\
JUN. 1986 06-05 06-05 06-06\
JULY 1986 07-02 07-02 07-03\
AUG. 1986 08-05 08-05 08-06\
SEPT. 1986 09-04 09-04 09-05\
OCT. 1986 10-03 10-03 10-06\
NOV. 1986 11-05 11-05 11-06\
DEC. 1986 12-04 12-04 12-05

2\.

5\. CONCURRENCE: The Director, Philadelphia Data Processing Center
concurs.

ROBERT W. CAREY

Director

[DISTRIBUTION]{.underline}:

A-I

D-1

E- 1-2-3-5

F-1-3-6-8-12-15-21-22-26-29-33

R-2-5

5-1-2

T-1

M29-I, Part II\
May 12, 1980 Change 16

CHAPTER 29. ALLOTMENT ACCOUNTS

29.01 GENERAL

a\. Personnel on active duty and retired members of the Armed Forces who
have United States Government Life Insurance and/or National Service
Life Insurance can pay their insurance premiums, including TDIP (Total
Disability Income Provision) premiums, by authorizing \[the VA to
establish a Class N insurance allotment from their active service or
retired pay.

b\. Class N insurance allotments cannot be established by the service
number or retiree to pay premiums for a third-party policyholder.

c\. Personnel on active duty can also repay insurance policy loan/lien
indebtedness by a Class N allotment from their active service pay.
Current Department of Defense regulations \[also permit the
establishment of a Class N allotment from retired pay for this purpose.
Inquiries regarding the possible establishment of an allotment for
repayment of insurance policy loan/lien indebtedness should be answered
accordingly. \[ j

d\. Only one monthly Class N insurance allotment for each insured is
permitted. Class N allotments authorized by the insured for payment of
multiple-policy premiums and/or insurance policy loan/lien indebtedness
are combined by the service department finance center before being
reported to the VA.

e\. All insurance accounts for which Class N \[ i allotments have been
established are maintained by the Philadelphia VA center. If an insured
notifies the St. Paul VA center that a Class N \[ \] allotment is being
established and the insurance records are in that office, \[ j a 90-day
951 policy callup freeze will be inserted in the master record and all
insurance records will be immediately transferred to the Philadelphia VA
center. If the insurance records cannot be located in the St. Paul VA
center, the insured\'s notification of intent to establish \[ \~ an
allotment will be forwarded to the Philadelphia VA center. \[In either
case, the insured will be notified

29.02 REPORTING OF ALLOTMENT TRANSACTIONS

a\. As tabulated below, a single \[ \] reporting office code \[ \] has
been assigned to each branch of service:

Reporting Office Service Location of

Code \[ \] Department Finance Center

l Army (active service) Indianapolis, IN\
2 Navy Cleveland, OH\
3 Air Force Denver, CO\
4 Marine Corps Kansas City, MO\
5 Coast Guard Washington, DC\
6 Army (retired pay) Indianapolis, IN\
Air Force (retired pay) Denver, COI

b\. Based upon a monthly accounting period, all Class N allotment
transactions processed by Army, Air Force, Coast Guard, Marine Corps and
Navy finance centers are reported to the Philadelphia VA center on
magnetic tape. A single alphabetic code identifies the type of
transaction being reported.

Transaction

Code Transaction Description

A ESTABLISHMENT (CURRENT AND RETROACTIVE EFFECTIVE DATES)\
V B DISCONTINUANCE (CURRENT AND RETROACTIVE EFFECTIVE DATES)\
D ESTABLISHMENT (CHANGE OF SSN)

29-I

M29-1, Part II May 12, 1980

Change 16

Transaction

Code Transaction Description

E DISCONTINUANCE (CHANGE OF SSN)\
J INACTIVE ALLOTMENT ADJUSTMENT (CREDIT DUE VA)\
K INACTIVE ALLOTMENT ADJUSTMENT (CREDIT DUE SD)

c\. All transactions, regardless of the type of action being reported,
are merged on one tape in triple **terminal digit** social security
account number order (000 through 999). **When an establishment**
transaction (code A) **and a discontinuous** transaction (code B) for
the same insured **are being reported simultaneously,** the
discontinuance transaction (code B) must always precede the
establishment **transaction** (code A).

d\. (Deleted.)

e\. The deduction transactions **are always reported under the** NSLI-V
**fund** (code 1) without **regard to** the number and/or fund(s) of the
policies which the insured **may have. Distribution** of funds is made,
based **upon** the insurance policy prefix, when the transaction is
**actually applied to the insurance** account(s).

f\. The service department will send the **monthly** Class N allotment
**transaction tape or** punched cards, along with a **summary** record
covering the certified run totals to **the** Philadelphia VA Center,
Attention: Finance Officer, Finance Division, **in** sufficient time to
arrive on or before the 10th **day** of the month following the date of
the actual allotment deduction **from** the insured\'s active service or
retired **pay.** The monthly payment check, payment voucher and a copy
of the summary record **will** be forwarded by certified \[ j **mail
addressed to the Philadelphia** VA Center, Attention: Collections and
Cashier Section. The monthly payment check will **also** be mailed **in
sufficient time** to be received in the Philadelphia VA center on or
before the date of receipt of the corresponding **allotment transaction
magnetic tape or** punched cards.

g\. The SLU (Subsidiary Ledger Unit), Finance Division, Philadelphia VA
center, maintains a control ledger for each of the reporting offices to
record the increase or **decrease** in the **total monetary amount** of
the running allotments. The total running allotment amount at the
beginning of the month, plus **the amount** of new establishments and
minus the amount of the discontinuance **reported** during the
accounting period **will constitute** the closing balance. This closing
balance amount plus the retroactive establishment amount and the
inactive allotment adjustment amount due the VA, minus the retroactive
discontinuance **amount and** the inactive **allotment adjustment
amount** due the service department, will constitute the check amount to
be paid by the service department. The **summary record** of the
certified run totals and the payment voucher will be verified against
the control ledger. **The appropriate reporting** office will be
immediately notified whenever the controlled balances to not agree
and/or the various transaction **amounts** do not crossfoot.

h\. The deduction transaction tape or punched **cards, along** with a
completed summary information listing for run 160 prepared by the SLU,
is delivered to the Philadelphia DPC **(data** processing center) for
processing in accordance with a schedule prepared by the Philadelphia VA
**center.** The Philadelphia DPC will immediately trap-print the
allotment transaction **tape** on five-part paper. These listings
**are** distributed **as follows:**

Original Insurance Specialist \[(291)\], **Insurance** Operations
Division

Duplicate \[ \] Subsidiary Ledger Unit (241), Finance Division

Triplicate Policy Service Unit (292A), **Insurance** Operations Division

Quadruplicate Policy Service **Unit** (292B) **Insurance Operations**
Division

Duplicate \[ \] Miscellaneous Accounts **and Service Unit** (292C),
Insurance Operations Division

i\. These listings, which **are retained for** 6 **months, will** be
used by all operating personnel \[ \] when it becomes necessary to
ascertain the current status of an insurance **account** which
**reflects a** pending allotment establishment or change. The allotment
transaction could have been reported by **the service department but**
not **yet** processed against the insurance master record. If the \[ \]
allotment **transaction is** of record, the \[ j information will be
annotated on the record printout and appropriate action, including the
refund of overdeductions, can be **taken immediately. \[ j**

29-2

M29-I, Part II\
May I2, 1980 Change I6

29.03 COMPUTER PROCESSING OF ALLOTMENT TRANSACTIONS

a\. Allotment Control Tape

\(l\) The allotment control tape contains a record for each insured who
is paying his \[or her\] insurance premiums and/or insurance policy
loan/lien by a Class N allotment. These records are retained in
ascending triple terminal-digit social security account number order
(000 through 999). A separate control tape is maintained for each branch
of service with one exception. There are two tapes for Army records
since their active service and retired pay Class N allotments are
reported to the VA on separate registers.

\(2\) Run 160 edits the format of all allotment transactions and
reconciles the amount of money forwarded or withdrawn by the service
department. Discrepancies are reflected on the run 160 transaction list
for corrective action by the SLU. In addition, punched cards for all
inactive allotment deduction transactions (codes J and K) are system
generated for the insurance file number identification by the SLU. These
transactions, when identified, are forwarded to the Policy Service
Section for clerical adjustment of flee corresponding insurance account.
These transactions are not reinserted into run 170.

\(3\) Run 170, which services the deduction control tape, provides for
the distribution of the allotment monetary amount to the various funds,
appropriations and general ledger accounts. Records are created and
deleted automatically by the allotment establishment and discontinuance
transactions received from the service departments. VA Forms 29-5923,
Allotment/DFB Input Card to Run 160, can also create, delete and change
the records on the allotment control tape.

b\. Establishment Transactions

\(I\) Allotment establishment transactions received from the service
department which pass the run 160 edit are processed in run 170 as
follows:

\(a\) Run 170 inserts the establishment transaction on the allotment
control tape. If an insurance file number is of record on the allotment
control tape, input for run 140 is created to update the corresponding
insurance master record. If the establishment transaction is
unidentified, VA Forms 29-5969, Allotment/DFB Output Card, and VA Forms
29-5970, Allotment Identification Workcard, ADP are system generated for
the insurance file number identification and subsequent insertion by the
SLU.

\(b\) Run 170 also records the initial deduction amount as Total
Unapplied and enters the Number of Months Unapplied (1 if a current
deduction effective date is involved; a larger number if the deduction
was established retroactively). When the entire allotment amount is
recorded as Total Unapplied, the money is transferred from
V-Undistributed Insurance Collections, to V-Unapplied Collections-Cash
Collections, and is retained there until distribution input is
subsequently received.

\(2\) When the allotment establishment output from run 170 is processed
in run 140 and there is a corresponding insurance master record, the
system either updates the insurance account or inserts the allotment
establishment as a pending transaction type 120 (establishment of a
deduction) or 129 (establishment of a deduction divided by the system so
that the establishment can be partially processed (one policy) or
processed (two policies)). It also creates input to insert the deduction
segment into the insurance master record. If the corresponding insurance
master record is not on tape, a VA Form 29-1675, Unassociated
Transaction Control Card, and a VA Form 29-1675a, Unassociated
Transaction Workcard, is generated by the system for correction of the
insurance file number or insertion of the insurance master record by the
MASU. In some cases, the insurance records must be obtained from the St.
Paul VA center as outlined in chapter 22.

\(a\) When run 140 updates the insurance master record, it generates a
punched card, transaction type 141, with distribution information. These
punched cards are retained in a hold file in the Philadelphia DPC
pending the next monthly runs 160/170. At that time they are used as
input to effect distribution of the Total Unapplied amount retained on
the allotment control tape. They also set the distribution pattern for
subsequent monthly allotment amounts.

29-3

M29-1, Part II May 12, I980

Change 16

\(b\) If run 140 inserts the allotment establishment as a pending
transaction type 120 or 129 because it cannot **properly** update the
insurance master record, a VA Form 29-5886b, Insurance Record Printout
(RPO), with a reason code in the 100 series, is system generated for
clerical action.

\(3\) The system-generated distribution punched cards, transaction type
141, from run 140 and the clerically prepared VA Forms 29-5923 are
processed with the next month\'s runs 160/170. At that time run 170
will:

\(a\) Deduct one monthly amount at a time from **the** Total Unapplied
amount and distribute it in accordance with distribution information
received. One month will also be deducted from the Number of Months
Unapplied each time a monthly amount is distributed.

\(b\) Run 170 cannot distribute money directly to insurance policy
loan/lien. If all or part of the deduction amount is for loan/lien,
posting media will be generated for each month deducted from the Number
of Months Unapplied. These posting media, transaction type 304, 305 or
306, are processed in run 140 to update the loan/lien segment of the
insurance master record provided:

[1]{.underline}. There are less than three policies for the insured;

[2]{.underline}. There is no life or policy freeze;

[3]{.underline}. The how paid indicator in the loan/lien segment of the
insurance master record is compatible; and

[4]{.underline}. The transaction amount agrees with the monthly
repayment amount in the insurance master \[record\] loan/lien segment.

If the loan/lien posting media cannot be applied by the system, a
pending transaction type 304, 305 or 306 is created and an RPO (record
printout), with a reason code in the 300 series, is system generated for
clerical action. All transaction types 306 \~ must be posted clerically
since the amount is a lump sum representing more than one monthly
deduction with more than one transaction date.

\(c\) When the Number of Months Unapplied is reduced to zero and there
is still a remaining Total Unapplied balance, the system will distribute
the remaining amount provided that it is less than one monthly premium.
Otherwise, a VA Form 29-5923a, DFB Allotment Distribution Request,
transaction type 114, will be generated for clerical distribution. These
VA Forms 29-5923a, when clerically completed, are also processed with
the next monthly runs 160/170.

\(4\) When the input for the next accounting month is being processed
and run 170 has not received a distribution card, transaction type 141,
from the prior month\'s run 140, a clerically prepared VA Form 29-5923
or 29-5923a or a discontinuance transaction from the service department,
run 170, will:

\(a\) Add one monthly allotment amount to the Total Unapplied balance
and transfer a like amount from V-Undistributed Insurance Collections to
V-Unapplied Collections-Cash Collections.

\(b\) Add I month to the Number of Months Unapplied.

29-4

**December** 28,1972 M29-Part, I Ii\
**Change 8**

\(c\) Generate **a** punched card request for distribution transaction
type 114, for processing in the following run

140\.

*(S)* When the request for distribution from run 170 is processed in run
140, the system will take one of the following actions:

\(a\) If the pending establishment transaction has not been deleted from
the insurance master record, it will disregard the request for
distribution.

\(b\) If the pending establishment transaction has been deleted and all
edit requirements have been met, it will generate a distribution punched
card, transaction type 141, for input into the next monthly runs
160/170.

9

\(c\) If all edit requirements have not been met, a VA Form 29-5923a,
code 114 or 115, and an RPO will be generated. Code 114, with
distribution code 3, indicates distribution should be made of the
Monthly Deduction Amount. Code 114, distribution code *S,* indicates
distribution should be made of the Total Unapplied Amount. Code 115
indicates the deduction control record does not agree with the master
record.

c\. Discontinuance Transactions

\(1\) Discontinuance transactions which do not match an allotment
control record with the same social security number, or which reflect
different original establishment effective dates or allotment amounts,
are rejected in run 170 for reconciliation, correction and reinsertion
by the SLU or returned to the reporting office if an excessive number of
discrepancies exist.

\(2\) If the discontinuance transaction is acceptable, the deduction
amount is deleted from the allotment control record. This skeletal
allotment control record is retained for a period of 1 year, at which
time it is automatically deleted from the allotment control tape.

\(3\) If there is no Total Unapplied balance in the allotment control
record, run 170 will:

\(a\) Generate allotment discontinuance input for run 140 to update the
insurance master record.

\(b\) Reverse all premium and TDIP amounts if the allotment was
discontinued retroactively. If a loan/lien repayment amount is involved,
the dollar amount of the loan/lien portions to be reversed is printed on
the run 170 transaction list.

NOTE: When the run 170 transaction list is received, the SLU will send a
memorandum to the Policy Service Section asking them to reverse the
corresponding loan/lien allotment payments.

\(4\) If there is a Total Unapplied balance in the deduction control
record, run 170 will:

\(a\) Set the Number of Months Unapplied to zero.

\(b\) Deduct the retroactive amount withheld by the service department
from the Total Unapplied balance, if the allotment was discontinued
retroactively.

\(c\) Generate a distribution request for the Total Unapplied balance,
if any.

\(d\) Generate allotment discontinuance input for run 140 to update the
insurance master record.

\(5\) When the allotment discontinuance output from run 170 is processed
in run 140 and there is a corresponding insurance master record, the
system will either update the account or insert the deduction
discontinuance as a pending transaction type 100, 109 or 110.

29-5

M29-1, Part II December 28,1972

change 8

\(a\) If run 140 updates the insurance master record, it deletes the
deduction segment. In addition, if the discontinuance reason code
indicates that the insured has been retired from active service (C for
Army transactions; T for Air Force transactions) the system will insert
a 120-day 951 policy freeze to prevent the release of premium notices,
lapse letters, etc., pending the receipt of a Class N allotment from
service retirement pay.

\(b\) When run 140 inserts the allotment discontinuance as a pending
transaction because it cannot logically update the insurance master
record, an RPO, with a reason code in the 100 series, is generated for
clerical action.

\(c\) If the corresponding insurance master record is not on tape, VA
Forms 29-1675 and 29-1675a are generated by the system. These
Unassociated deduction discontinuances are processed by the MASU as
outlined in chapter 21.

d\. Prior Pay Transactions

\(1\) Occasionally, the service department finance center will use
paired transaction codes A (establishment) and B (discontinuance) to pay
missing insurance premium payments which became due prior to the
effective date of the current running allotment.

\(2\) Since the effective date of these transactions are prior to the
effective date of the current running allotment, they are rejected and
VA Forms 29-5969 are system-generated for insertion into run 140 by the
SLU.

\(3\) Run 140 inserts these items as pending transaction types 120 and
100 and generates an RPO in the 100 series for clerical adjustment of
the insurance master record.

e\. Multiple Allotment Transactions

\(1\) Only one transaction code A (establishment) and/or one transaction
code B (discontinuance) can be processed by the system simultaneously.
If the service department finance center erroneously transmits multiple
transaction codes A and/or B during the same accounting month, the
excess transactions are rejected and VA Forms 29-5969 are system
generated for reinsertion into runs 160/170 during the following
accounting month by the SLU.

\(2\) When rejects are caused by the erroneous transmission of multiple
allotment transactions, a miscellaneous diary is system-generated and
inserted into the insurance master record. The ensuing RPO in the 100
series will reflect a diary message, MULTALLOT, to alert the recipient
that the rejected transactions being controlled by the SLU must be
considered before releasing a VA Form 29-1588, Request for Allotment
Deduction Change, or dictated letter to the appropriate service
department finance center and/or insured.

**29.04** CLERICAL PROCESSING OF ALLOTMENT TRANSACTIONS

a\. Establishment Transactions

\(1\) If run 140 cannot logically update the insurance account or there
are more than two policies involved, the allotment establishment is
inserted as a pending transaction type 120 on the insurance master
record. When run 140 can only update one account on a two-policy case,
the remaining portion of the allotment establishment is inserted as a
pending transaction type 129. In either case, an RPO, with a reason code
in the 100 series, is system generated for clerical action. A
description of the various RPO reason codes is contained in MP-6, part
II, supplement No. 1 A, chapter 1.

**(2)** The following actions will be taken when processing pending
transaction types 120 and 129:

\(a\) Prepare transaction type 083 to update the premium segment of the
insurance master record. Change the how paid code to 6 (allotment from
service or retired pay). The first day of the deduction effective month
and year will be used as the effective date how paid.

29-6

**December** 28, 1972 M29-1, Part II\
**Change** 8

[l]{.underline}. Allotments cannot pay premiums more than l month in
advance. If the current next month due is more than l month in advance
of the deduction effective date, downdate the next month due. The
resulting credit, plus any prior overage which is less than one monthly
premium amount, will be refunded immediately.

[2]{.underline}. If the deduction will pay premiums in arrears or on a
month-to-month basis, the insured will be requested to make a direct
payment in the amount necessary to place the deduction on a one month in
advance, premium paying basis.

[3]{.underline}. No action will be taken if the current how paid code is
5 (disability waiver) and the allotment deduction was established to pay
premiums. The RPO will be immediately forwarded to the Insurance Claims
Section for possible discontinuance of the disability waiver or
discontinuance of the allotment deduction.

\(b\) Prepare transaction type 087 to update the TDIP segment if
involved. If the deduction amount is insufficient to pay the combined
insurance and TDIP premiums as intended, the deduction will be applied
to pay the TDIP premium in full and the balance of the deduction amount
will be applied to the basic insurance premium.

\(c\) If part or all of the deduction amount is for loan/lien repayment,
prepare transaction type 025 (loan) or 026 (lien) to insert or change
the monthly repayment amount and/or the deduction type in the loan/lien
segment of the insurance master record.

\(d\) Prep are transaction type 040 (second day release) to insert, or a
transaction type 050 to change the deduction segment, if necessary.

\(e\) Prepare transaction type 080 to insert or change the social
security account number and/or insert or delete the retired service
indicator, if necessary.

NOTE: A VA Form 29.5896a, Life Input, containing a special batch number,
must be used to insert or change the social security account number on a
how paid 6 (allotment from service or retired pay) account These forms
must be delivered to the Systems Division, Philadelphia DPC, for special
key punch instructions and subsequent insertion.

\(i\) Prepare transaction type 098 to delete the pending transaction
type 120 or 129.

\(g\) If one or more of the following conditions exist, prepare VA Form
29-5923, transaction type 131, to provide for the distribution of the
Total Unapplied amount being retained on the deduction control tape:

[l]{.underline}. Two-policy account with different policy funds.

2\. The insured has three or more policies.

[3]{.underline}. The deduction amount does not equal the total premium
requirements, including any loan/lien repayment amount.

[4]{.underline}. The full deduction amount is only for loan/lien
repayment.

[5]{.underline}. Multiple loan/lien repayments on one policy.

[6]{.underline}. The total premium is more than \$99999.

[7]{.underline}. The how paid code in the insurance master record is
other than 6 (allotment from service or retired pay).

29-7

M29-I, Part II December 28, 1972

Change 8

\(h\) If the deduction amount does not agree with the total premium
requirements, a VA Form 29-1588, will be prepared. These forms when
completed as shown below, are forwarded to the Input/Output Section,
Philadelphia DPC, for keypunching and release to the appropriate service
department finance center.

Card Column Title Entry

l BR. OF SERV. CODE FOR BRANCH OF SERVICE\
2 ALLOTCLASS ALWAYS ALPHA N

3-11 SERVICE OR SOCIAL SOCIAL SECURITY NUMBER\
SECURITY NUMBER

12 PREFIX INSURANCE FILE PREFIX

13-20 INSURANCE FILE PRECEDED WITH ZEROS IF\
NUMBER LESS THAN EIGHT DIGITS

21-35 NAME CODE/BALANCE LAST NAME OF INSURED\
OF LAST NAME STARTING IN CC 21.\
MAXIMUM OF 15 CHARACTERS.\
UNUSED CC\'S TO RIGHT OF\
NAME, IF ANY, WILL BE\
LEFT BLANK

3641 FIRST NAME FIRST NAME OF INSURED\
STARTING IN CC 36. \_\_\_\
MAXIMUM OF 6 CHARACTERS.\
UNUSED CC\'S TO RIGHT OF\
NAME, IF ANY, WILL BE\
LEFT BLANK.

42 INIT MIDDLE INITIAL OF INSURED.\
LEAVE BLANK IF NONE.

43 TRANCODE 1 -Establishment\
2-Discontinuance\
3-Increase\
4-Decrease\
5-Inactive Adjustment

47 REAS. CODE NUMERIC REASON CODE\
(see table below)

REASON COMPATIBLE\
CODE EXPLANATION TRANSACTION CODE(S)\
3

3 or 4\
3 TDIP added or end of TDIP 2, 3 or 4\
premium-paying period\
4 Disability waiver 2, 3 or 4\
5 End of premium paying 2 or 4\
period on limited pay or\
maturing endowment contracts

29-8

M29-1, **Part** II\
**December** 28, 1972 **Change 8**

REASON COMPATIBLE

CODE EXPLANATION TRANSACTION CODE (S)

6 New insurance 1 or 3\
7 Reduction 4\
8 Reinstatement l or 3\
9 Inservice waiver 2 or 4\
0 Miscellaneous change l, 2, 3, 4 or 5

Card Column Title Entry

48-53 INSURANCE EFFECTIVE SINGLE-DIGIT MONTH AND\
DATE DAY NUMBERS WILL ALWAYS\
BE PRECEDED BY A ZERO.\
IF TRANSACTION CODE IS\
5, LEAVE BLANK.

54-57 EFFECTIVE DATE OF NEW\
ESTAB. ALLOTMENT BEING REQUESTED.

SINGLE DIGIT MONTH NUMBERS WILL ALWAYS BE PRECEDED BY ZERO. IF
TRANSACTION CODE IS 2 OR 5, LEAVE BLANK.

58-61 DISC. REQUIRED DISCONTINUANCE\
DATE OF CURRENT ACTIVE\
ALLOTMENT. SINGLE-DIGIT

w MONTH NUMBERS WILL ALWAYS\
BE PRECEDED BY ZERO.\
IF TRANSACTION CODE IS\
I, LEAVE BLANK

62-66 AMOUNT AMOUNT OF NEW ALLOTMENT\
BEING REQUESTED. LEAVE\
BLANK IF TRANSACTION\
CODE 152 OR 5.

67-70 ESTAB. EFFECTIVE DATE OF CURRENT\
ACTIVE ALLOTMENT. SINGLE-\
DIGIT MONTH NUMBERS WILL\
ALWAYS BE PRECEDED BY\
ZERO. LEAVE BLANK IF\
TRANSACTION CODE IS I.

71-74 DISC. DISCONTINUANCE EFFECTIVE\
DATE REPORTED BY SERVICE\
DEPARTMENT. SINGLE-DIGIT\
MONTH NUMBERS WILL ALWAYS\
BE PRECEDED BY ZERO.\
COMPLETE ONLY WHEN\
TRANSACTION CODE IS 5.

75-79 AMOUNT THE MONTHLY ALLOTMENT\
AMOUNT REPORTED BY SERVICE\
DEPARTMENT. LEAVE BLANK\
IF TRANSACTION CODE IS 1.

29-9

M29-I, Part II December 28, 1972

Change 8

The originator will sign and date the completed VA Form 29-1588.

l\. If the VA Form 29-1588 was prepared to establish or increase the
allotment amount, a transaction type 082 will be prepared to insert a
951 policy freeze. In addition, a transaction type 008 will also be
prepared to insert a 978 miscellaneous diary, callup code type 953, with
the legend 1588 (followed by the numeric transaction and reason codes
and the effective month number). The callup date for both inserts will
be 120 days subsequent to date of preparation.

[2]{.underline}. If the VA Form 29-1588 was prepared to discontinue or
reduce the deduction amount, only the transaction type 008 need be
prepared.

3\. Upon receipt of the requested allotment transactions, the 951 policy
freeze and/or the 978 miscellaneous diary will be automatically deleted
by the system.

[4]{.underline}. If the requested allotment transactions have not been
processed through the system prior to the 120-day callup date, a
followup RPO is system generated for clerical action. Unprocessed
registers, if any, will be reviewed to determine if the requested change
has been reported by the service department. If so, no further action is
required. However, if there are no unprocessed registers or the review
of unprocessed registers proves negative, another VA Form 29-1588 will
be prepared. This form will be noted in red SECOND REQUEST in the upper
right corner. The 951 policy freeze and/or the 978 miscellaneous diary
will be clerically updated 120 days from the current date.

b\. Discontinuance Transactions

\(1\) If run 140 cannot logically update the account or there are more
than two policies involved, the deduction discontinuance is inserted as
a pending transaction, type 100, in the insurance master record. If the
deduction was discontinued retroactively, a pending transaction, type
110, will be inserted. When run 140 can only update one account on a two
policy case, the remaining portion of the deduction discontinuance is
inserted as a pending transaction type 109. In each case, an RPO with a
reason code in the 100 series, is system-generated for clerical action.
A description of the various RPO reason codes is contained in MP-6, part
II, supplement No. 1.4, chapter 1.

\(2\) If the current how paid code is 5 (disability waiver), the RPO
will be immediately forwarded to the Insurance Claims Section for
determination as to the accuracy of the disability waiver refund which
was previously authorized on an assumption basis. Corrective action, if
any is required, and deletion of the pending transaction will be taken
by the Insurance Claims Section.

\(3\) The following actions will be taken when processing all other
pending transaction types 100, 109 and 110:

\(a\) Prepare transaction type 083 to update the premium segment of the
insurance master record. Change the how paid code to 9 (direct pay), Use
the first day of the discontinuance effective month number for the
effective date how paid. Determine and update the next month due.

[1]{.underline}. If the allotment was paying premiums on a 1
-month-in-advance basis, the next month due will be the second calendar
month following the allotment discontinuance effective date.

[2]{.underline}. If the allotment was paying premiums on a
month-to-month basis, the next month due will be the calendar month
following the allotment discontinuance effective date.

[3]{.underline}. If the allotment was paying premiums on a
1-month-in-arrears basis, the next month due will be the same as the
deduction discontinuance effective date.

\(b\) Prepare transaction type 087 to update the TDIP segment, if
involved.

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**May** 12, 1980 M29-1, Part **II\
Change** 16

• (c) If all or part of the allotment amount was for loan/lien
repayment, the following action will be taken:

[l]{.underline}. If the pending transaction type is 100 or 109, prepare
transaction type 025 (loan) or 026 (lien) to delete the monthly
repayment amount and the deduction type from the loan/lien segment.

[2]{.underline}. If the pending transaction type is 110 (retroactive
allotment discontinuance effective date) and/or a memorandum is received
from the SLU as stated in paragraph 29.03c(3) \[NOTE\], prepare
transaction type 065 (loan) or *066* (lien) to adjust the loan/lien
balance; delete the monthly repayment amount and the deduction type from
the loan/lien segment. The last day of the month is used when posting
loan/lien allotment repayments. Bad check control account procedures as
provided in chapter 24 are used for adjusting loan/lien moneys.
Accountability of the loan/lien reversal amount will be shown on the
input by debiting Cash Collections 02 (loan) or 06 (lien) and crediting
Undistributed Insurance Collections 38. These transactions will be
forwarded to the SLU along with an endorsed copy of their memorandum for
control and insertion.

\(d\) Prepare transaction type 090 to delete the deduction segment from
the insurance master record.

\(e\) If the allotment discontinuance reason code indicates that the
insured has been retired from active service (C for Army transactions; T
for Air Force transactions) prepare transaction type 082 to insert a
120-day callup 951 policy freeze to prevent the release of premium
notices, lapse letters, etc., pending the receipt of a Class N deduction
from service retirement pay. Upon receipt of the retired pay Class N
allotment establishment, the 951 policy freeze will be automatically
deleted by the system.

\(f\) Prepare transaction type 098 to delete the pending transaction
type 100, 109, or 110.

c\. Inactive Allotment Transactions

\(l\) Changes in the monthly deduction amount and/or effective date(s)
of allotments which were previously discontinued, are reported by the
service departments as inactive allotment transactions \[as\] code J
(credit due VA) or code K (credit due service department).

\(2\) Punched cards for these transactions are generated by run l 60 for
insurance file number identification by the SLU. These transactions
cannot be processed by run l 70. Therefore, when identified, they are
forwarded to the Policy Service Section for clerical adjustment of the
insurance account.

\(3\) In order to insure completion of the required action, these
transactions are received and controlled by a designated employee in the
Policy Service Section. An RPO will be requested and appropriate action
will be taken which may include a change in the next month due and/or
the overage/shortage amount, establishment or deletion of liens,
authorization of refunds and/or additional dividends, etc.

\(4\) The net adjustment amount received from the service department was
automatically placed in the NSLI-V fund (code

l). Therefore, transactions to adjust the fund or account must also be
prepared when necessary.

\(5\) If there is no insurance master record on tape, the inactive
allotment transaction punched card will be forwarded to the MASU for
association with the insurance records and completion of adjustment
action.

\(6\) When adjustment action has been completed, all inactive allotment
deduction transaction punched cards will be stamped Ready for File
\[initialed, dated -1 and filed in the insurance folder.

d\. Prior Pay Transactions

\(l\) Prior pay transactions will appear as pending transaction types
120 and 100 on a system-generated RPO in the 100 series. The effective
date of both transactions will be prior to the effective date of the
current running allotment.

\(2\) Normally these transactions provide for the payment of insurance
premiums which became due prior to the effective date of the current
running allotment. Therefore, history lookup may be necessary to
determine the required adjustment

29-11

M29-I, Part II May 12,1980

Change 16

action. In some cases, the adjustment action may be prior to the ADP
conversion and will require reference to photocopies of \~ the premium
record card and/or other historical records.

\(3\) The full amount of the prior pay transaction was placed in the
Premiums-Cash Collections account in the V fund. When the adjustment
action is taken and the fund and/or account is different, the proper
documents will be prepared to adjust the fund and/or account. However, a
VA Form 29-5923, **will** not be prepared to make distribution of the
allotment amount or change the effective date of the current running
allotment.

e\. Multiple Allotment Transactions

\(l\) When a system-generated RPO in the 100 series reflects a
miscellaneous message, MULTALLOT, there are additional allotment
transactions which were rejected by run 170. These rejected transactions
which are controlled by the SLU pending reinsertion during the following
accounting month must be considered before releasing a VA Form 29-I 588
or dictated letter to the appropriate service department finance center
and/or insured.

\(2\) \[ \] These rejected transactions will appear on the trap-print
listings as outlined in paragraph 29.02i. \[ \]

**29.05** CLERICAL PROCESSING OF REQUESTS FOR DISTRIBUTION

a\. Requests for distribution, transaction type 114 from run 170, will
be rejected in run 140 under the following conditions:

\(l\) Three-or-more policy case.

\(2\) Amount of monthly deduction does not equal the total premium
amount including loan/lien repayment amount.

\(3\) Multiple loan/lien accounts on any one policy.

\(4\) Deduction amount for repayment of loan/lien only.

\(5\) Total premium is more than \$999.99.

\(6\) Monthly deduction amount previously distributed but odd amount
remains in Total Unapplied.

\(7\) How paid code is not 6 on life and/or TDIP.

\(8\) Monthly repayment amount and/or deduction type incorrect or not
shown in loan/lien segment.

\(9\) Social security number, reporting office and/or effective date
fields in the insurance master record do not match with like fields in
the request for distribution.

\(10\) No deduction segment in the insurance master record.

b\. The rejected requests for distribution, transaction type 114, are
mechanically reproduced into VA Forms 29-5923a. A reject reason code 114
or 115 will be interpreted in the name code field. The \[Analysis and
Control Section\] , DPC, will associate the VA Forms 29-5923a with the
corresponding RPO\'s, reason code 114 or 115 which were simultaneously
system generated and forward them to the Policy Service Section.

c\. The reject and RPO reason code 114 or 115 will indicate the type of
clerical action required.

\(l\) Reason Code 114

\(a\) A distribution code 3 (transaction type 131) interpreted on the VA
Form 29-5923a indicates that distribution of the

29-12

May 12, 1980 M29-1, Part II\
Change 16

Monthly Deduction Amount is required. A distribution code 5 (transaction
type 151) indicates that distribution of the Total Unapplied amount is
required.

\(b\) The RPO and other insurance records, if necessary, **will** be
reviewed to determine the proper distribution of the amount shown on the
VA Form 29-5923a.

\(c\) Distribution will be made by entering the amount(s) and fund in
card columns 47 through 73. All other necessary information is
prepunched in the card.

\(d\) VA Forms 29-5923a can only be used to distribute deduction amounts
within the same fund. If more than one fund is involved, a separate VA
Form 29-5923 must be prepared for each additional fund.

\(2\) Reason Code 115

\(a\) Reason code 115 reflects that a discrepancy exists between the
deduction control record and the insurance master record in one or more
of the following fields:

[1]{.underline}. Social Security Number.

2\. Reporting Office.

[3]{.underline}. Effective Date.

[4]{.underline}. How Paid Code.

\(b\) The RPO and other insurance records, if necessary, will be
reviewed to ascertain the discrepant field. If the master record is
incorrect, prepare input to change the master record. **If** the
deduction control record is incorrect, advise the SLU by memorandum of
the required correction.

\(c\) Distribution of the allotment amount will only be made if the how
paid code in the insurance master record is not and should not be 6. All
other VA Forms 29-5923a, reject reason code 115, may be destroyed.

d\. VA Forms 29-5923a are forwarded directly to the \[Analysis and
Control Section\] for keypunching and insertion into the hold file
pending the next runs 160/170. VA Forms 29-5923 are forwarded to the SLU
for batch control purposes prior to being keypunched.

29.06 USE OF RPO TO SECURE ALLOTMENT INFORMATION

a\. Upon receipt of a system-generated allotment followup RPO or any
communication which indicates that a Class N allotment establishment or
change was authorized by the insured, and the insurance master record
has not been updated, the following action will be taken:

\(1\) \[ j The trap-print listings of the allotment transactions
reported by the respective service departments will be reviewed to
determine if the allotment establishment or change was reported to the
VA.

\(a\) If the review proves negative a VA Form 29-1588 will be prepared
as outlined in paragraph 29.04a(2)(h). If a communication which requires
a reply is involved, advise the correspondent of the action taken by the
VA.

\(b\) **If flu** allotment establishment or change has been reported and
is pending insertion into run 140, based upon the computer-processing
schedule prepared by the Philadelphia VA center, status can be furnished
the correspondent, if necessary; otherwise, no further action is
required.

\(c\) If the allotment transaction in question has been reported and
should have been previously inserted into run 140, the RPO will be used,
as outlined below, to locate the missing transaction.

29-13

M29-I, Part II May 12, 1980

Change 16

\(2\) The RPO will be used to obtain allotment information when:

\(a\) \[(Deleted.)\]

\(b\) Allotment transactions which were reported by the service
department and processed through run 140 must be located. These missing
transactions could be unidentified, Unassociated or rejected items.

\(c\) The amount and/or effective date of the current active allotment
which was reported prior to the earliest trap-print listing available
must be confirmed.

\(d\) The amount(s) and/or establishment and discontinuance date(s) of a
prior allotment(s) must be obtained for audit purposes or completion of
action on a death claim, cash surrender, matured contract payable, etc.

b\. When the RPO is used to obtain allotment information, the following
entries will be made, in red, on the RPO. If multiple policies are
involved, RPO\'s will be stapled together and the entries will be made
on the first RPO.

\(l\) Insert the following routing instructions in the upper right
corner of the RPO reason code area:

\(a\) SLU (24lB)

\(b\) Originating unit (symbol).

\(2\) Underline the reporting office code and social security number.
Insert and underline this information if not preprinted on the RPO.

\(3\) In the upper portion of the pending transaction area, insert the
allotment information which should be confirmed. Include the transaction
type (establishment, discontinuance or both discontinuance and
establishment), the allotment amount(s) and effective date(s). Also
enter the date and type of any interim information received from the
service department or insured. The originator will initial and date the
request directly below these entries.

\(4\) The RPO\'s will be forwarded to the SLU. The originator will
retain the insurance folder as a followup control.

c\. The SLU will review the latest run 730a deduction control listing
and subsequent registers, if any, for the requested allotment
information and take the following actions:

\(l\) If the allotment establishment or change has not been reported by
the service department, the latest allotment information available or
the notation *No allotment of record,* will be inserted in the lower
portion of the pending transaction area. The entry will be initialed and
dated and the RPO returned to the originating unit.

\(2\) If the transaction(s) is located as an unidentified item or is
pending insertion into run 140, the confirming entry will include the
approximate insertion date. The confirming entry will be initialed and
dated and the RPO returned to the originating unit.

\(3\) If the transaction in question was inserted into run 140
subsequent to the date of preparation of the RPO, the confirming entry
will include the actual insertion date. The confirming entry will be
initialed and dated and the RPO returned to the originating unit.

\(4\) If the transaction was inserted prior to the date of preparation
of the RPO and/or was inserted with an incorrect insurance file number,
the confirming entry will include the actual insertion date and the
erroneous insurance file number **if** known. The confirming entry will
be initialed and dated and the RPO routed to the MASU for location,
correction and reinsertion of a possible Unassociated transaction. MASU
will endorse the original confirming entry by showing:

\(a\) No record unassociated transaction.

29-14

May 12, 1980 M29-I, Part II\
Change 16

\(b\) Actual reinsertion date if previously inserted.

\(c\) Approximate insertion date if unassociated transaction is located
and is being reinserted.

After the endorsement is initialed and dated, the RPO will be returned
to the originating unit.

d\. Upon receipt of the returned RPO, the originator will take the
following action:

\(1\) If the allotment transaction(s) has not been reported by the
service department, a VA Form 29-1588 will be prepared as outlined in
paragraph 29.04a(2)(h). If necessary, advise the correspondent of the
action taken by the VA. If a death claim is involved, a teletype
requesting discontinuance of the allotment will be used in lieu of VA
Form 29-1588.

\(2\) If the allotment transaction(s) was or will be inserted subsequent
to the date of preparation of the RPO, the account will not be
clerically updated. Status can be furnished the correspondent, if
necessary; otherwise, no further action is required.

\(3\) If the allotment transaction(s) was inserted prior to the date of
preparation of the RPO and there is no record in MASU, a history
transaction will be requested. If the pending allotment transaction was
clerically deleted without updating the insurance master record, the
account can be clerically updated and status furnished the
correspondent, if necessary.

**29.07 DIRECT** PAYMENTS RECEIVED ON ALLOTMENT ACCOUNTS

**a.** Class N allotments cannot be applied to pay premiums more than l
month in advance. Payments in excess of this criterion are subject to
immediate refund as stated in paragraph 29.04a(2)(a)L. Therefore, direct
payments received on allotment accounts will only be accepted to:

\(l\) Place the account on a 1-month-in-advance premium-paying basis.
This payment will be immediately applied to update the next month due.

\(2\) Repay loan/lien indebtedness. This payment will be immediately
applied to update the loan/lien segment.

\(3\) Repay premium shortages. This payment will be immediately applied
to update the premium segment.

\(4\) Validate a policy conversion or change of plan. This payment will
be retained as a non-interest-bearing credit pending the required change
in the allotment amount.

\(5\) Pay future premiums provided the insured indicates that he \[or
she\] has authorized the discontinuance of his \[or her\] allotment.
This payment will be retained as a non-interest-bearing credit pending
the receipt of the allotment discontinuance.

\(a\) Insert a 120-day 978 miscellaneous diary, callup code 953, to
insure the prompt and proper disposition of the payment credit. If the
allotment discontinuance has not been reported prior to the callup date,
advise the insured that the non-interest-bearing credit is being
refunded since the allotment has not been discontinued.

\(b\) If the allotment discontinuance is received prior to the callup
date, the 978 miscellaneous diary **will** be automatically deleted by
the system. The payment credit will then be applied to pay premiums. If
the credit is sufficient to pay at least 3 months\' premiums **in**
advance, a discount will be allowed. In calculating the discount value,
the premium due date following the last month paid by allotment will be
considered as the date of tender of the payment credit.

\(c\) If a refund of the payment is requested before the allotment is
discontinued, only the actual amount tendered will be refunded since the
payment was retained as a non-interest-bearing credit.

b\. Inquiries regarding the acceptability of direct payments on
allotment accounts will be answered accordingly.

29-15

M29-I, Part II May 12, 1980

Change 16

c\. When a direct payment is received **on** an allotment account and
the intent of the insured is unknown, a dictated letter will be used to
advise the insured of the limited acceptability of such payments. The
payment will be retained as a non-interest-bearing credit pending a
reply. A 60-day to 978 miscellaneous diary will be inserted to insure
followup action.

\(l\) Upon receipt of the insured\'s reply, action will be taken in
accordance with paragraph 20.07a.

\(2\) If a reply is not received prior to the callup date, the insured
will be advised that the payment is being refunded.

**29.08** PROCESSING OF RENEWED TERM ACCOUNTS WITH ALLOTMENT SHORTAGE

a\. If the renewal allotment increase has not been processed through run
140 within 5 months of the actual renewal date, an RPO, reason code 951,
is system generated for clerical followup action.

b\. Upon receipt of the 951 RPO, current allotment information will be
obtained as outlined in paragraph 29.06, to determine if the allotment
increase was reported to the VA by the service department and is
currently pending insertion into run 140. If so, no further clerical
action is required.

c\. If the allotment increase has not been reported to the VA as of the
latest available register (a VA Form 29-1588 will be prepared as
outlined in paragraph 29.04a(2)(h) to request the increased amount.
Insert a 120-day 978 miscellaneous diary callup code type 953 and
advance the 951 policy freeze callup date to agree with the 978
miscellaneous diary callup date.\]

**29.09** PROCESSING OF CONVERTED ACCOUNTS WITH ALLOTMENT SHORTAGE

a\. When a term allotment account is converted to a permanent plan, (the
service department finance center is authorized to increase the Class N
allotment to agree with the converted monthly premium. Simultaneously, a
120-day 951 policy freeze is inserted in the insurance master record. If
the allotment increase has not been processed through run 140 prior to
the callup date, an RPO, reason code 951, is system generated for
clerical followup action.

b\. Upon receipt of the 951 RPO, current allotment information will be
obtained as outlined in paragraph 29.06, to determine if the allotment
increase was reported to the VA by the service department and is
currently pending insertion into run 140. If so, no further clerical
action is required.

c\. If the allotment increase had not been reported to the VA as of the
latest available register and the insured did not submit a direct
payment to validate the conversion, \[prepare a VA Form 29-1588 as
outlined in paragraph 29.04a(2)(h). Request a retroactive effective date
of change to provide for payment of the converted premium on a
month-in-advance basis\].

**29.10** CLASS E ALLOTMENT

a\. Only civilian employees of the various service departments, who are
employed overseas, can pay their United States Government Life Insurance
and/or National Service Life Insurance premiums by a Class E allotment
from their civilian pay.

b\. Occasionally, an active service member or retiree will erroneously
authorize the establishment of a Class E allotment from their active
service or retired pay, in lieu of the required Class N allotment, for
payment of their insurance premiums.

c\. The service department finance centers use U.S. Treasury Department
checks to transmit Class E allotment payments to the VA. These checks
are processed through the Reconciliation and Deposit Unit, Finance \[ \]
Division, as direct payments. Since the how paid code 9 (direct pay) is
retained when the insurance master record is updated, these allotment
payments are not readily identifiable.

d\. A control record of every Class E allotment payment received is
retained by the Reconciliation and Deposit Unit. These controls are
maintained in alphabetical surname order for each branch of service.
When a Class E allotment is identified as an insurance premium payment,
it is inserted as a transaction type 201 (not paid as billed) item.
Simultaneously, a transaction type 088 is prepared to insert a nonfreeze
978 miscellaneous diary, callup code 971, with the legend CL E ALLOT BR
(followed by the branch of service code) with a callup date 10 days from
the current date.

29-16

Ma i2 1980 M29-I, Part II

y Change I6

e\. Upon receipt of the RPO, reason code 971, in the Policy Service
Section, **a** letter will be released to the appropriate service
department finance center requesting the discontinuance of the **Class**
E **allotment** and the establishment of a Class N allotment as of a
current date. The 978 miscellaneous diary callup date will be changed to
120 days from the current date.

29.11 ADJUSTMENT OF ALLOTMENTS

a\. In accordance with Comptroller General\'s Decision B 123209, January
25, 1956, as contained in Decisions of the Comptroller General of the
United States, 35 Comp. Gen. 418, the service departments cannot
establish allotments from active service or retired pay to collect
United States Government Life Insurance and/or National Service Life
Insurance premiums unless:

\(1\) The service member or retiree actually authorized the allotment.

\(2\) The service member ratified the payment of insurance premiums on
his \[or her\] behalf by knowingly accepting a benefit arising out of
such payment.

b\. Accordingly, it is considered that this decision permits the service
departments to satisfy VA requests for allotment payment if the insured
signed an allotment authorization, but premiums were not deducted from
his \[or her\] service or retired pay, or if deducted were not reported
to the VA, or **if** the insured knowingly accepted a benefit, such as
an insurance dividend, arising from the payment of premiums by
allotment.

c\. In addition, and by mutual agreement, the service department
**will** take full credit for any and **all** allotment overpayments
made to the VA immediately upon detection of such overpaid amounts by
the service department. However, the service department will reimburse
the VA for any and all overpayments of insurance benefits which resulted
from the delayed receipt by the VA of such allotment retroactive
discontinuances or inactive allotment adjustments. Such reimbursements
will be made in the amount of the insurance benefit overpayment or in
the total amount of premiums payable through the premium month in which
the overpayment was made, whichever is the lesser.

d\. Whenever an insured contests the nonreceipt of an allotment by the
VA, or the allotment amount currently being received by the VA, or an
insurance benefit overpayment is created due to the delayed receipt of
an allotment discontinuance or inactive allotment adjustment, the
following action will be taken:

\(l\) A letter will be released to the appropriate service department
finance center citing the circumstances involved and requesting the
establishment or adjustment of the allotment. **If** an insurance
benefit overpayment is involved, specifically state the reimbursable
amount payable to the VA by the service department.

\(2\) Prepare a transaction type 082 to insert a 951 policy freeze. In
addition, a transaction type 008 will also be prepared to insert a 978
miscellaneous diary, callup code type 971, with the legend SD ADJ LTR.
The callup date for both inserts will be 120 days subsequent to the date
of release of the adjustment letter.

29-17