An Act to amend the Federal Employees Group Life Insurance Act of 1954.
PL 84-356 (S.1792), enacted 08/11/1955

PUBLIC LAW 355-AUG. 11, 1955 
[69 S T A T . 
IRC 1954 amend-
ments* 
68A Stat. 483. 
26 u s e 4091. 
26 u s e 4092. 
26 u s e 4093. 
Public Law 355 
CHAPTER 793 
August 11, 1955 
AN ACT 
[H. R. 4581] 
r
p
Q amend the Internal Revenue Code of 1954 with respect to the tax on cutting 
oils. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled, That (a) section 
4091 of the Internal Revenue Code of 1954 is amended to read as 
follows: 
•'SEC, 4091. IMPOSITION OF TAX. 
"There is hereby imposed upon the following articles sold in the 
United States by the manufacturer or producer a tax at the following 
rates, to be paid by the manufacturer or producer: 
" (1) cutting oils, 3 cents a gallon; and 
" (2) other lubricating oils, 6 cents a gallon." 
(b) Section 4092 of the Internal Revenue Code of 1954 is amended 
to read as follows: 
"SEC. 4092. DEFINITIONS. 
"(a) CERTAIN VENDEES CONSIDERED AS MANUFACTURERS.—For pur-
poses of this subpart, a vendee who has purchased lubricating oils 
free of tax under section 4093 shall be considered the manufacturer or 
producer of such lubricating oils. 
"(b) CUTTING OILS.—For purposes of this subpart, the term 'cut-
ting oils' means oils sold for use in cutting and machining operation 
(including forging, drawing, rolling, shearing, punching, and stamp-
ing) on metals." 
(c) The table of sections to subpart B of part I I I of subchapter A 
of chapter 32 of the Internal Revenue Code of 1954 is amended by 
striking out "Definition of certain vendees as a manufacturer" and 
inserting in lieu thereof "Definitions". 
SEC. 2. Section 6416 (b) (2) of the Internal Revenue Code of 1954 
is amended by striking the period at the end of subparagraph (H) 
and inserting in lieu thereof a semicolon, and by inserting after sub-
paragraph (H) the following new subparagraph: 
" (I) In the case of lubricating oils in respect of w^hich tax was 
paid at the rate of 6 cents a gallon, used or resold for use on or 
after the effective date of this subparagraph as cutting oils 
(within the meaning of section 4092 (b)) ; except that the amount 
of such overpayment shall not exceed an amount computed at the 
rate of 3 cents a gallon." 
SEC. 3. The amendments made by this Act shall take effect on the 
first day of the first calendar quarter which begins more than ten 
days after the date of the enactment of this Act. 
Approved August 11, 1955. 
26 u s e , 
p r e c . 
4091. 
26 u s e 6416. 
Effective date. 
August 11, 1955 
[S.1792] 
Public Law 356 
C H A P T E R 794 
AN ACT 
To amend the Federal Employees' Group Life Insurance Act of 1954. 
Government em-
ployees insurance. 
68 Stat. 738. 
5 u s e 2094. 
Use of insurance 
fund. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled, That (a) section 
5 (c) of the Federal Employees' Group Life Insurance Act of 1954 
is amended to read as follows: 
"(c) The sums withheld from employees under subsection (a) and 
the sums contributed from appropriations and funds under subsec-
tion (b) shall be deposited in the Treasury of the United States to 
the credit of a fund which is hereby created. 
Said fund is hereby 
69 
S T A T . ] 
PUBLIC LAW 356-AUG. 11, 1955 
677 
made available without fiscal year limitation for premmm payments 
\inder any insurance policy or policies purchased as authorized in 
sections 7 and 10 of this Act, for the payment of any obligations 
under agreements assumed pursuant to section 10 of this Act, and 
for any expenses incurred by the Commission in the administration 
of this Act within such limitations as may be specified annually in 
appropriation acts: Provided^ That appropriations available to the 
Commission for salaries and expenses for the fiscal year 1955 shall 
be available on a reimbursable basis for necessary administrative 
expenses of carrying out the purposes of this Act until said fund shall 
be sufficient to provide therefor. 
The income derived from any divi-
dends or premium rate adjustments received from insurers shall con-
stitute a part of said fund." 
(b) Section 5 of said Act is amended by adding the following 
subsection at the end thereof: 
"(d) The Secretary of the Treasury is authorized to invest and 
reinvest the moneys in the fund created by section 5 (c), or any part 
thereof, in interest-bearing obligations of the United States and to 
sell such obligations of the United States for the purposes of the^und. 
The interest on and the proceeds from the sale of any such obligations 
shall become a part of the fund." 
SEC. 2. (a) Section 6 of said Act is amended to read as follows: 
"SEC. 6. Each policy purchased under this Act shall contain a pro-
vision, in terms approved by the Commission, to the effect that any 
insurance thereunder on any employee shall cease upon his separa-
tion from the service or twelve months after discontinuance of his 
salary payments, whichever first occurs, subject to a provision which 
shall be contained in the policy for temporary extension of coverage 
and for conversion to an individual policy of life insurance under 
conditions approved by the Commission, except that if upon such 
date as the insurance would otherwise cease the employee retires on 
an immediate annuity and (a) his retirement is for disability or (b) 
he has completed fifteen years of creditable service, as determined by 
the Commission, his life insurance only may, under conditions deter-
mined by the Commission, be continued without cost to him in the 
amounts for which he would have been insured from time to time had 
his salary payments continued at the same rate as on the date of 
cessation. Periods of honorable active service in the Army, Navy, 
Air Force, Marine Corps, or Coast Guard of the United States shall 
be credited toward the required fifteen years provided the employee 
has completed at least five years of civilian service." 
(b) The amendments made by subsection (a) shall be effective as 
of August 17, 1954. 
SEC. 3. (a) The third proviso of section 7 (d) of said Act is hereby 
repealed. 
(b) Section 7 (e) of said Act is amended to read as follows: 
"(e) The companies eligible to participate as reinsurers, and the 
amount of insurance under the policy or policies to be allocated to 
each issuing company or reinsurer, may be redetermined by the Com-
mission for and in advance of any policy year after the first, on a 
basis consistent with subsections (c) and (d) of this section, wdth 
any modifications thereof it deems appropriate to carry out the intent 
of such subsections, and based on each participating company's group 
life insurance in force in the United States on the most recent Decem-
ber 31 for which information is available to it, excluding that under 
any policy or policies purchased under this Act, and shall be so redeter-
mined in a similar manner not less often than every three years or at 
any time that any participating company withdraws from partici-
pation : Provided, That if, upon any such redetermination, in the case 
Inve stment of 
fund. 
Dis ab ility re-
tirees. 
Armed Forces 
Effective date. 
5 use 2096. 
Repeal. 
Reallocation 
reinsurance. 
of 
678 
PUBLIC LAW 356-AUG. 11, 1955 
[69 STAT* 
of any issuing company or reinsurer which insured employees of the 
Federal Government on December 31, 1953, under policies issued to 
an association of Federal employees, the amount which results from 
the application of the formula referred to in subsection (d) of this 
section is less than the totaj decrease, if any, since December 31, 1953, 
in the amount of such company's insurance under such policies, the 
amount allocated to such company shall be increased to the amount 
of such decrease: Provided further^ That any increase in the amount 
allocated to such company by application of the preceding proviso 
shall be reduced by the amount or amounts of any policy or policies 
purchased from such company under the authorization of section 10 
of this Act, and in force on the date of such redetermination," 
5 use 2099. 
gj,(-. 4 Section 10 of said Act is amended to read as follows: 
Retired employ- 
"SEC. 10. (a) The Commissioii is authorized to arrange with any 
a^eements.'^"*^* iioiiprofit associatiou of Federal or District of Columbia employees 
for the assumption by the fund created by section 5 (c) of all life 
insurance agreements, including all benefits contained 
therein, 
obtained or provided by such association for its members. 
"(b) The Commission is authorized, without regard to other sec-
41 use 5. 
tions of this Act and without regard to section 3709 of the Revised 
Statutes as amended, to purchase from one or more life insurance 
companies, as determined by the Commission, a policy or policies 
of group life insurance to insure all or any portion of the life insur-
ance agreements obtained or provided by an association for its mem-
bers and assumed under this section: Provided^ That any such com-
pany must be either (1) the company then insuring such members 
under a policy or policies issued to such association; or (2) a com-
pany which is an insurer or a reinsurer under section 7 of this Act. 
The Commission may at any time discontinue any policy or policies 
it has purchased from any insurance company. 
"(c) Any association accepting such arrangement shall, in con-
sideration therefor, pay over and transfer to the Commission (1) an 
amount equal to the actuarial value, as determined by the Commis-
sion, of the insurance obligations assumed by the fund created by 
section 5 (c), or (2) the total assets of the life insurance fund of such 
association, whichever is the lesser. 
Such payment and transfer shall 
be a premium for the purchase of the Government insurance arrange-
ment, shall be deposited in the fund created by section 5 ( c ) , and shall 
be accomplished in accordance with the procedures and conditions 
prescribed by the Commission, and in accordance with the require-
ments of applicable law. 
"(d) The arrangements authorized by this section shall be made 
within six calendar months following the date of enactment of this 
amending Act, or such later date as the Commission may agree when 
there are extenuating circumstances, but not later than August 17, 
1957, and such arrangements shall apply only to life insurance agree-
ments existing on both the date of the approval of tliis amendment 
and on the date of the respective arrangement. 
"(e) Any such arrangement shall provide that the continuation of 
the insurance coverage of such members shall be conditioned upon 
their payment to the fund created by section 5 (c), in such manner 
and under such conditions as the Commission may prescribe, of pre-
mium payments equal to the premiums or dues previously payable by 
them for such insurance coverage. 
"(f) The members of such associations shall not by reason of any 
such arrangements be disqualified from any other insurance benefits 
provided by this Act if otherwise eligible therefor." 
Approved August 11, 1955.