The Auxiliary Manual, COMDTINST M16790.1G describes the requirements for flying the Coast Guard Auxiliary Ensign.
Ch. 3, D.2.d.(3) discusses flying of the Auxiliary Ensign by members in AP status, but it is the same for all members except retired members.
Auxiliarists may fly the Auxiliary Ensign on any currently inspected facility that displays a current facility decal, including vessel, aircraft, or radio facilities, in accordance with Chapter 3 of the Auxiliary Operations Policy Manual, COMDTINST M16798.3 (series). They may also fly the Auxiliary Ensign on their own vessels that are not offered/accepted for use as long as the vessel has successfully completed a Vessel Safety Check (VSC) and displays a current VSC decal. While underway, at least one Auxiliarist must be on board when flying the Auxiliary Ensign. Auxiliarists may also fly the Auxiliary Ensign on or near buildings or homes in which such facilities are located or in which the Auxiliarist resides. Auxiliarists may fly the Auxiliary Ensign day and night. If an Auxiliarist is present, the Auxiliary Ensign may be displayed in appropriate public places in order to promote the purposes of the Auxiliary. The Auxiliary Ensign must be maintained in good condition at all times (true color, no tattered corners, strings, etc.) to bring credit to the organization.
Ch. 3, D.4.c.(2) discusses flying the Auxiliary Ensign by retired Auxiliarists. With the exception of flying the Auxiliary Ensign in public places and on facilities, Retired members have the same privileges in regards to flying the Auxiliary Ensign.
This article was updated by the BC-UMK on 4/2/2014. It was believed to be accurate as of that date.