(a) When an insurance policy has been assigned to the agency, the agency shall pay the premiums thereon unless it elects to take the paid-up value of the policy.

(b) When the agency is the assignee of the insurance policy, upon the death of the insured, the amount released for burial expenses shall be determined by the existing burial allowance. After deduction of such amount for burial expenses, any balance remaining, up to the amount of the cost of assistance and care rendered to the deceased, shall be taken by the agency for reimbursement, except, when the deceased leaves surviving him any relatives for whom he had been legally responsible and who are, or who are liable to become, public charges, the agency may release such balance to such relatives of the deceased.