Skip to Content

Proposed Rule

Indemnity Claims; Notice of Changes

Document Details

Information about this document as published in the Federal Register.

Published Document

This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

Start Preamble

AGENCY:

Postal Service.

ACTION:

Proposed rule.

SUMMARY:

The Postal Service proposes to revise its standards concerning indemnity claims as set forth in the Domestic Mail Manual (DMM) S010, Indemnity Claims; and related provisions of S913, Insured Mail, and S920, Collect on Delivery (COD) Mail. Other than the proposed changes concerning time periods for filing claims and retention periods for undelivered Insured Mail, the changes clarify existing DMM provisions or codify, in the DMM, policies not currently set forth in that manual.

DATES:

Comments must be received on or before 30 days from date of publication.

Start Printed Page 72627

ADDRESSES:

Written comments should be mailed or delivered to the manager, Revenue and Field Accounting, 475 L'Enfant Plaza SW, Room 8831, Washington, DC 20260-5242. Copies of all written comments will be available at the above address for inspection and photocopying between 9 a.m. and 4 p.m. Monday through Friday.

Start Further Info

FOR FURTHER INFORMATION CONTACT:

Gilbert LeMarier, 202-268-3333.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

The proposed changes fall into several categories. Each is addressed separately below.

I. Claim Filing Time Limits

The Postal Service is redesigning the claims system to ensure a more timely response to claims filed by our customers. The Customer Claims Response System (CCRS) will provide an interactive means, utilizing Web technology, to capture claim information from designated field units and to expedite claim adjudication. The product tracking system will be utilized to obtain delivery information.

In conjunction with the redesign of the claim system, time limits for filing a claim will be revised. The current policy that a customer must file a claim immediately when the contents of an article are damaged or missing will now have a clearly stated time limit of no later than 45 days from the mailing date. Also, for a lost article, a customer would be able to file sooner for certain special service products. Insured and bulk insured service customers would be able to file a claim 21 days from the mailing date versus the current 30-day requirement. Customers of COD mail, Express Mail COD, and registered COD special services would be able to file a claim 45 days from the mailing date versus the current 60-day requirement.

For Insured Mail, Registered Mail, and COD services, the Postal Service proposes that the maximum time limit for filing a claim be reduced to no later than 180 days from the mailing date. These proposed changes will enhance the efficient and timely processing of claims and reduce the retention period of undeliverable, accountable mail.

II. Retention Periods

The Postal Service also proposes to reduce the retention of undelivered Insured Mail items. Currently, undeliverable mail is forwarded to mail recovery centers (MRCs). Under current procedures, information about undeliverable accountable mail items (Insured Mail, Registered Mail, and COD mail) is logged into a national claims database and the accountable article is held for 1 year from the date of receipt, the maximum time limit allowed for filing a claim from the mailing date. The Postal Service proposes that retention periods for accountable mail be shortened to 180 days from the date of receipt to match the new proposed maximum time limit allowed for filing a claim. This also would relieve capacity constraints on MRCs.

III. Documentation in Support of Claims

Under current mailing standards, only the sender may file a claim for the complete loss of Registered Mail, Insured Mail, COD, or Express Mail articles. The Postal Service proposes that either the sender or addressee, whoever is in possession of the mailing receipt, may now file a claim for the complete loss of a Registered Mail, numbered Insured Mail, COD, or Express Mail article. Only the sender would be allowed to file a claim for the complete loss of an unnumbered, insured article.

As evidence of value when a sales receipt or invoice is not available, the acceptance of a customer's statement with sufficient detail to determine whether the value claimed is accurate would be accepted only for items valued up to $100. Other acceptable evidence of value would be a copy of a canceled check, money order receipt, credit card statement, or other documentation indicating the amount paid. For Internet transactions conducted through a Web-based payment network, acceptable evidence of value is a computer printout of an online transaction identifying the purchaser and seller, price paid, date of transaction, description of item purchased, and an indication the status of the transaction is completed.

As is the case with current policy, customer statements, receipts, or other evidence of value supplied by the customer will not necessarily be determinative of the value of the lost or damaged article, particularly if other information indicates the actual value at the time of mailing is different.

IV. Damage

To file a claim, the addressee must present the article, packaging, and mailing container to the Postal Service for inspection. If the sender, in conjunction with the CCRS, files the claim and the damaged article is in the custody of the addressee, the sender's Post Office or designated site will enter the claim data into the CCRS. The CCRS will generate a letter to the addressee instructing that the article, packaging, and container be presented to the Postal Service for inspection.

V. Additional Grounds for Denial of Claims

The Postal Service proposes that indemnity will not be paid for collect on delivery (COD), Insured Mail, Registered Mail, or for Express Mail service in the following situations:

  • Mailer refusing to accept delivery of the mailpiece on return.
  • Mail not bearing the complete names and addresses of the sender and addressee, or both the recipient's address and return address, and therefore is undeliverable.
  • Event tickets received after the event.
  • Software installed onto computers that have been lost or damaged.
  • A personal check remitted to the mailer for a COD article and not honored by the financial institution upon which it is drawn.
  • Damaged articles not claimed within the prescribed time limits set forth in Postal Operations Manual (POM) 147.3.
  • Personal time used to make handmade, hobby, or craft items.

VI. Time Limit To Appeal to the Consumer Advocate

The Postal Service proposes to clarify the time limit in which a customer may forward an appeal to the Consumer Advocate, Headquarters. If the manager of Claims Appeals at the St. Louis Accounting Service Center (ASC) sustains a denial of a claim, any further appeal must be filed with the Consumer Advocate, within 60 days from the date of that decision.

VII. Valid Mailing Receipt

The Postal Service proposes to clarify that the appropriate mailing receipt must be postmarked in order to be acceptable evidence of insurance.

VIII. COD Changes

The Postal Service proposes to clarify that the mailer of a collect on delivery (COD) article may not stipulate “CASH ONLY” and that the recipient has the option to pay the charges by cash or personal check.

Although exempt from the notice and comment requirements of the Administrative Procedure Act (5 U.S.C. 553(b), (c)) regarding proposed rulemaking by 39 U.S.C. 410(a), the Postal Service invites comments on the following revisions of the Domestic Mail Manual (DMM), incorporated by reference in the Code of Federal Regulations. See 39 CFR part 111.

Start List of Subjects

List of Subjects in 39 CFR Part 111

End List of Subjects Start Part Start Printed Page 72628

PART 111—[AMENDED]

1. The authority citation for 39 CFR part 111 continues to read as follows:

Start Authority

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.

End Authority

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 sender, for the complete loss of an unnumbered, insured article.

[Revise new item b to read as follows:]

b. Either the sender or addressee, who is in possession of the mailing receipt, for the complete loss of a registered, numbered insured, COD, or Express Mail article.

* * * * *

2.2 When to File

[Revise 2.2 to read as follows:]

A customer must file a claim no later than 45 days from the mailing date 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.

Mail type or serviceWhen to file (from mailing date)
No sooner than (days)No later than (days)
Bulk Insured21180
COD45180
Express Mail790
Express Mail COD4590
Insured21180
Registered15180
Registered COD45180

Exceptions: Claims for loss of insured and COD articles (including insured articles sent to APO and FPO addresses) originating at or addressed to post offices outside the contiguous 48 states may be filed only:

a. After 45 days if article sent First-Class Mail, space available mail (SAM), or parcel airlift (PAL) services.

b. After 45 days if article sent COD.

c. After 75 days if article sent by surface.

* * * * *

2.5 Evidence of Insurance

For a claim involving registered, insured, 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 postmarked mailing receipt issued at the time of mailing (reproduced copies are not acceptable).

* * * * *

[Revise item c to read as follows:]

c. The original sales receipt from an automated retail terminal listing the mailing receipt number and insurance amount, only if the original mailing receipt is not available (reproduced copies are not acceptable).

2.6 Evidence of Value

The customer 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 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 new or used (only if a sales receipt or invoice is not available). If the article is handmade, the statement must include the price of the materials. 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.

[Add new item h to read as follows:]

h. For Internet transactions conducted through a Web-based payment network, 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.

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 container and packaging to the Postal Service when a claim is filed. Failure to do so results in the 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 article with the packaging and mailing container to the Postal Service for inspection. If the sender files the claim, the St. Louis ASC will notify the addressee by letter to present the article, packaging, and container to the Postal Service for inspection. Failure to do so results in the denial of the claim.

2.9 Proof of Loss

[Revise introductory text and item a to read as follows:]

To file a claim, the sender must provide proof of loss for unnumbered, insured mail. Proof of loss is not required for registered mail, numbered insured, COD, or Express Mail claims. Any one of these documents is acceptable:

a. A letter or statement from the addressee, dated at least 21 days after the date that the unnumbered insured article was mailed, reporting that the addressee did not receive the article. The statement or a copy of it must be attached to the claim.

* * * * *

[Delete item c.]

2.10 Duplicate Claim

[Revise 2.10 to read as follows.]

A customer must file any duplicate claim for any mail type or service within the following time limits:

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 collect on delivery (COD), insured mail, registered mail, or Express Mail services in these situations unless otherwise stated:

* * * * *

[Revise item r to read as follows:]

r. Negotiable items (defined as instruments that can be converted to cash without resort to forgery), currency, or bullion except as provided in S911.2.0 for registered mail items or S010.2.12.c for Express Mail items.

* * * * *
Start Printed Page 72629

[Add items ac through aj to read as follows:]

ac. Mailer refusing to accept delivery of the parcel on return.

ad. Mail not bearing the complete names and addresses of the sender and addressee, or not deliverable to either the addressee or sender.

ae. Event tickets (e.g., nonrefundable tickets for concert, theater, sport, or similar events) received after the event and, for insurance purposes, insured for loss, not for delay or receipt after the event for which they were purchased.

af. Software installed onto computers that have been lost or damaged.

ag. Personal check remitted to the mailer for a COD article and not honored or otherwise payable by the financial institution upon which it is drawn. If the personal check is lost in transit, it is the mailer's responsibility to obtain a replacement check from the addressee. Indemnity to the mailer is limited to stop payment charges incurred by the addressee for the issuance of a replacement check, if the mailer establishes that the addressee incurred the charge and was reimbursed by the mailer for this amount.

ah. Damaged articles not claimed within the prescribed time limits set forth in Postal Operations Manual 147.3.

ai. Personal time used to make handmade, hobby, craft, or similar items.

* * * * *

3.0 PAYMENT

* * * * *

3.3 Dual Claim

[Revise 3.3 to read as follows:]

If the sender and the addressee both claim insurance and cannot agree on which one should receive the payment, any payment due is made to the sender unless the claim has already been paid to the addressee upon presentation of the mailing receipt.

* * * * *

4.0 ADJUDICATION

* * * * *

4.2 Appeal

[Revise 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 article, the customer must send the appeal directly to Claims Appeals (see G043 for address). For an unnumbered, insured 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 Appeal 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, then the customer may submit an additional appeal within 60 days for final review and decision to the Consumer Advocate, Postal Service Headquarters, who may waive standards in S010 in favor of the customer.

* * * * *

S900 Special Postal Services

S910 Security and Accountability

* * * * *

S913 Insured Mail

* * * * *

2.0 MAILING

* * * * *

[Revise 2.7 to read as follows:]

2.7 Receipt

For each insured article mailed, the mailer receives the appropriate postmarked receipt:

a. Form 3813 when the insurance coverage is $50 or less.

b. Form 3813-P when the insurance coverage is more than $50.

c. Form 3877 when multiple accountable mail articles are mailed at one time.

* * * * *

S920 Convenience

* * * * *

S921 Collect on Delivery (COD) Mail

* * * * *

3.0 MAILING

* * * * *

3.4 Indelible Ink, Mailer Errors

[Revise 3.4 to read as follows:]

The particulars required on the form must be filled in by hand with ink, typewritten, or computer printed. The Postal Service is not responsible for errors that a mailer makes in stating charges to be collected. The mailer can not stipulate “CASH ONLY”. The recipient has the option to pay the charges by cash or personal check.

* * * * *

An appropriate amendment to 39 CFR 111.3 to reflect these changes will be published if the proposal is adopted.

Start Signature

Stanley F. Mires,

Chief Counsel, Legislative.

End Signature End Part End Supplemental Information

[FR Doc. 02-30935 Filed 12-5-02; 8:45 am]

BILLING CODE 7710-12-P