5 C.F.R. Subpart I—Assignments of Life Insurance
Title 5 - Administrative Personnel
(a) (1) Section 208 of the Bankruptcy Amendments and Federal Judgeship Act of 1984, Pub. L. 98–353 (98 Stat. 355), effective July 10, 1984, permits Federal judges to irrevocably assign their FEGLI coverage to one or more individuals, corporations, or trustees. Section 4 of Pub. L. 103–336 (108 Stat. 2661), effective October 3, 1994, extended this right to all Federal employees, annuitants, and compensationers. (2) An individual may assign ownership of all life insurance under this part, except Option C. If an individual wishing to make an assignment owns more than one type of coverage, he/she must assign all the insurance; an individual cannot assign only a portion of the coverage. Option C cannot be assigned. (b) An individual cannot name conditional assignees in case the primary assignee dies before the insured individual. (c) If the insurance is assigned to two or more individuals, corporations, or trustees, the insured individual must specify percentage shares, rather than dollar amounts or types of insurance, to go to each assignee. (d) If an individual who has made an assignment later elects increased insurance coverage under §870.506 or during an open enrollment period, the increased coverage is considered included in the already existing assignment. The right to increase coverage remains with the insured individual, rather than transferring to the assignee. (e) An individual who assigns ownership of insurance continues to be the insured individual, but the assignee receives those rights of an insured individual that are specified in this part. (f) Once assigned, the value of the insurance increases or decreases automatically as provided by this part. Exception: if the insured individual elected a Living Benefit before assigning the remainder of his/her insurance, the amount of Basic insurance does not increase or decrease. (g) An insured individual who has assigned his/her insurance cannot elect a Living Benefit; nor can an assignee elect a Living Benefit on behalf of the insured individual. (h) An insured individual who has elected a Living Benefit under subpart K of this part may assign the remainder of his/her insurance. The assignment would affect Option A, Option B, and, for an employee who elected a partial Living Benefit, Basic insurance. (i) A court order can direct that an insured individual make an irrevocable assignment to the person(s) named in the court order. For an assignment to be effective, the insured individual must follow the procedures in §870.902. [62 FR 48731, Sept. 17, 1997, as amended at 64 FR 16602, Apr. 6, 1999] (a) To assign insurance, an insured individual must complete an approved assignment form. Only the insured individual can make an assignment; no one can assign on behalf of an insured individual. (b) The individual must submit the completed and signed form to the appropriate office indicating the intent to irrevocably assign all ownership of the insurance. The form must also be witnessed and signed by 2 people. (1) For employees, the appropriate office is the employing office. (2) For annuitants and compensationers, the appropriate office is OPM. (3) For employees and former employees who have ported Option B coverage, the appropriate office is the Portability Office. [64 FR 72464, Dec. 28, 1999] An assignment under this subpart is effective on the date the employing office receives the properly completed, signed, and witnessed assignment form. The amount of insurance is the amount of the insured individual's Basic insurance, plus any Option A and Option B coverage. Premium withholdings for assigned insurance are withheld from the salary, annuity, or compensation of the insured individual, as provided in subpart D of this part. (a) The right to cancel (or reduce) insurance transfers to the assignee; the insured individual cannot cancel (or reduce) insurance after making an assignment. (b) The assignee has the right to cancel insurance according to the provisions of §§870,502 and 870.505. When there is more than one assignee, all assignees must agree to the cancellation. A cancellation of Basic insurance also cancels all Optional insurance. (a) Assigned insurance terminates under the conditions stated in subpart F of this part. (b)(1) When an insured individual's insurance terminates, an assignee has the right to convert all or part of the group insurance to an individual policy on the insured individual. The conditions stated in subpart F of this part apply to assignees who elect to convert. (2) When there is more than one assignee, each assignee has the right to convert all or part of his/her share of the insurance. Any assignee who doesn't convert loses all ownership of the insurance. (3) When there is more than one assignee, the maximum amount of insurance each assignee will be able to convert is determined by the dollar amount corresponding to the assignee's share of the total insurance. This amount will be rounded up to the next higher thousand, if it's not already an even thousand dollar amount. (4) Premiums for converted life insurance are based on the insured individual's age and class of risk at the time the conversion policy is issued. (5) The employing office must notify each assignee of the conversion right at the time the assigned group insurance terminates. (c) An assignment terminates 31 days after the insurance terminates, unless the insured individual is reemployed in or returns to a position in which he/she is entitled to coverage under this part within 31 days after the insurance terminates. Exception: If an employee elects portability for Option B coverage, an assignment remains in effect. If the individual returns to Federal service, Basic insurance and any Option A insurance acquired through returning to service is subject to the existing assignment. [62 FR 48731, Sept. 17, 1997, as amended at 64 FR 72465, Dec. 28, 1999] (a) If an employee assigns Basic insurance and later becomes eligible to continue such insurance coverage as an annuitant or compensationer as provided in §870.701: (1) At the time he/she retires or becomes eligible as a compensationer, the insured individual may elect unreduced or partially reduced insurance coverage as provided in §870.702(a). This right remains with the insured individual and does not transfer to the assignee. Exception: if the insured individual elected a partial Living Benefit as an employee under subpart K of this part, he/she can only elect unreduced insurance coverage. (2) After the individual has made the election described in paragraph (a)(1) of this section, the assignee (or, if more than one, all of the assignees acting together) may, at any time, elect to cancel the annuitant's or compensationer's election of increased coverage, as provided in §870.702(b). The right to cancel the election transfers to the assignee; the annuitant or compensationer cannot cancel the election after making an assignment. Exception: if the individual elected a partial Living Benefit as an employee under subpart K of this part, the assignee(s) cannot cancel the election of unreduced insurance coverage. (b) When more than one assignee has been named, at the time the insured individual becomes eligible to continue coverage as an annuitant or compensationer, some assignees may choose to convert their part of the insurance, while others may choose to continue the coverage during the insured individual's retirement or receipt of compensation. The amount of each type of continued insurance is determined by the total percentage of the shares of the assignees who choose to continue the coverage. (c)(1) When an annuitant who has assigned his/her insurance is reemployed in a position in which he/she is entitled to life insurance coverage, the coverage he/she acquires as a reemployed annuitant is subject to the existing assignment. (2) The right of a reemployed annuitant to elect Option B coverage as an employee rather than as an annuitant under §870.705(d)(3) remains with the insured individual and does not transfer to the assignee. Any Option B coverage elected as an employee is subject to the existing assignment. (a)(1) An assignment automatically cancels an insured individual's prior designation of beneficiary. After making an assignment, an individual cannot designate a beneficiary; the right to designate beneficiaries transfers to the assignee. (2) Each assignee may designate a beneficiary or beneficiaries to receive insurance benefits upon the death of the insured individual and may also later change the beneficiaries. An assignee may designate himself/herself the primary beneficiary and name another contingent beneficiary(ies) to receive insurance benefits if the assignee dies before the insured individual. (b) Benefits for assigned insurance are paid to the assignee(s) if the assignee(s) did not designate a beneficiary. (c) Benefits for assigned insurance are paid to an assignee's estate if the assignee dies before the insured individual and: (1) The assignee (or the assignee's heirs) did not designate a beneficiary; or (2) The assignee's designated beneficiary dies before the insured individual. (d) The provisions of §870.802 apply to designations of beneficiary made by assignees. Each assignee and each beneficiary of an assignee must keep the office where the assignment is filed informed of his/her current address.
Title 5: Administrative Personnel
PART 870—FEDERAL EMPLOYEES' GROUP LIFE INSURANCE PROGRAM
Subpart I—Assignments of Life Insurance
§ 870.901 Assignments permitted.
§ 870.902 Making an assignment.
§ 870.903 Effective date of assignment.
§ 870.904 Amount of insurance.
§ 870.905 Withholdings.
§ 870.906 Cancellation of insurance.
§ 870.907 Termination and conversion.
§ 870.908 Annuitants and compensationers.
§ 870.909 Designations and changes of beneficiary.
§ 870.910 Notification of current addresses.
