Obligations (from program and financing) 6,703 7,435 8,334 Financial Condition (in thousands of dollars) Increase (-) or decrease in gross unpaid obligations... 151 -54 -85 1961 1962 1963 1964 actual actual estimate estimate Gross expenditures 6,854 7,381 8,249 Revenues and other receipts (from program Assets: and financing). 6,166 7,288 8,393 974 264 158 287 Increase (-) in accounts receivable, net. -22 -13 -15 31 81 Policy loans... 1,559 2,118 2,776 3,534 Applicable receipts. 6,144 7,275 8,378 6 10 Budget expenditures.. 710 106 -129 Total assets. - 2,568 2,441 3,008 3,912 Liabilities: Current 1,197 1,046 1,100 1,185 This fund finances the payment of claims on nonpar Operating reserves: ticipating insurance policies issued to veterans with Reserve for cash surrender 14,157 17,249 20,500 25,000 service-connected disabilities which make them ineligible Reserve for future installments for commercial insurance (38 U.S.C. 722). Administra on matured contracts.. 3,644 3,8464,215 4,571 tive expenses are paid from the General operating expenses appropriation. Total liabilities. 18,998 22,141 25,815 30,756 Budget program-1. Death claims.-Payments to sur Government equity: viving beneficiaries continue to increase as new deaths Non-interest-bearing capital.. 4,500 4,500 4,500 4,500 occur among the increasing number of policyholders. Deficit (-)----- -20,930 -24,200 -27,307-31,344 3. Cash surrenders.-A policyholder may terminate his Total Government equity-----16,430 -19,700 -22,807 -26,844 insurance by cashing in his policy for its cash value. 4. Policy loans.-A policyholder may borrow up to 94% of the cash value of bis policy. This activity increases Analysis of Government Equity (in thousands of dollars) with the increased number of policyholders. The general increase in the activity of this fund is Unobligated balance (-). -192 -729 -876 -817 indicated in the following table (dollars in thousands): Operating reserves (-) -17,801 -21,095-24,715 -29.571 Invested capital and earnings.. 1,563 2,124 2,784 3,544 June 30, June 30, June 30, June 30, 1961 1962 1963 1964 Total Government equity--- -16,430 -19,700 -22,807 -26,844 Number of policies.-- 46,594 49,577 52,800 55,800 Insurance in force... $407,738 $432,896 $461,000 $487,000 Object Classification (in thousands of dollars) Financing.-Operations are financed from premiums and other receipts. Additional funds are derived from 1962 1963 1964 the Veterans insurance and indemnities appropriation in actual estimate estimate stead of direct appropriations to this fund." It is estimated that the payment will be $2 million in 1963 and 33 Investments and loans -- 893 1,080 1,275 $2.7 million in 1964. 42 Insurance claims and indemnities. 5,810 6,355 7,059 Operating results and financial condition. Because pre Total obligations... 6.703 7,435 8,334 mium and other receipts continue to be insufficient to The fund finances claims arising from the guarantee of premiums due on commercial life insurance policies held by servicemen while they are in service and for 2 years after discharge (72 Stat. 487). The Government guarantees the repayment of any indebtedness not liquidated by the insured himself. Any payment by the Government on cases approved subsequent to October 6, 1942, creates a debt owed the Government by the insured. Budget program--Insurance program.-Claims paid on guaranteed premiums are made to commercial insurance companies in cases where the servicemen failed to make premium payments guaranteed by the Government. The activity of the fund is indicated in the following table: 1962 actual 1963 estimate 1964 estimate Number of settlements.. 20 30 Average cost per settlement.. $1,026 $750 $750 Financing.-Payment of claims against this fund are financed from collection of claims receivable, revenue, and appropriations as needed. Operating results and financial condition. The payment of refund claims has created expenses substantially in excess of the small revenue of the fund, thereby increasing the deficit to $1.9 million in 1962 with nominal losses continuing through 1964. Total operating costs, funded. 6. Policy loans made. Total capital outlay.---- tions... Financing: Policy loans repaid. 26,107 2,763 210 15 27,977 2,970 350 20 28,370 3,290 89,115 ments. -40 Public enterprise funds-Continued subsequently entitled to borrow up to 94% of the cash value of the new policy. Disbursement of such loans VETERANS SPECIAL TERM INSURANCE FUND-Continued from this fund increased from $331 thousand in 1961 to Program and Financing (in thousands of dollars)-Continued $703 thousand in 1962. The general decrease in the activity of this fund is indi1962 1963 1964 actual cated in the following table (dollars in thousands): estimate estimate June 30, June 30, June 30, June 30, Financing-Continued 1961 1964 Revenues and other receipts-Continued Number of policies. 658,853 649,973 641,000 631,000 Other revenue (optional settlements) --- 1,303_1,351 1,395 Insurance in force. $5,842,933 $5,758,099 $5,673,000 $5,584,000 Total revenues and other receipts... 30,322 32,522 33,425 Financing. Payments from this fund are financed priUnobligated balance brought forward: U.S. marily from premium receipts and interest on investsecurities (par). 98,849 80,340 Capital transfer: Payment of earnings (-)-- -4,000 -5,000 -9,000 Operating results and financial condition.-Favorable Unobligated balance transferred to "General mortality experience on insurance written against this operating expenses" (75 Stat. 495) (-).. -221 -40 fund has kept death claims payments well below the Unobligated balance carried forward: U.S. securities (par) (-)--- –80,340 –89,115 – 99,325 amount of premium and interest receipts, thereby pro ducing an annual increase in the retained earnings of the Financing applied to program. 44,610 18,707 14,175 fund. The retained earnings are being reduced by the special dividend and any further excess will be paid to the Summary of Sources and Application of Funds (in thousands of dollars) Treasury. Revenue, Expense, and Retained Earnings (in thousands of dollars) Obligations (from program and financing). 44,610 18,707 14,175 Increase in gross unpaid obligations (-). -611 -249 -172 1962 1963 1964 actual estimate estimate Gross expenditures-- 43,999 18,458 14,003 Revenues and other receipts (from program and Revenue: financing) --------- 30,322 32,522 33, 425 30,173 32,298 33,055 Increase in accounts receivable, net (-). -118 -2 -14 110 120 130 Applicable receipts. 30,204 32,520 33,411 30,283 32,418 33,185 Expense... 94,366 26,738 24,600 Budget expenditures... 13,795 -14,062 -19,408 Net income or loss (-) for the year.-----64,083 5,680 8,585 77,379 9,075 9,715 The fund finances the payment of claims on nonpartici Payment of earnings (-)- -4,000 -5,000 -9,000 pating insurance policies issued before January 1, 1957, Unobligated balance transferred to "General -221 -40 -40 to veterans who served in the Armed Forces subsequent to April 1951 (38 U.S.C. 723). Policyholders were given Retained earnings, end of year. 9,075 9,715 9,260 the right (72 Stat. 1716) to convert to a permanent plan or to a new form of term insurance which may not be renewed beyond age 50 but which costs less than un Financial Condition (in thousands of dollars) limited term insurance. Those who converted to & 1963 1964 permanent plan also acquired the right to purchase total actual actual estimate estimate disability income coverage with an additional premium. The fund has accumulated retained earnings in excess of Assets: its anticipated liabilities. Provision was made (75 Stat. Treasury balance. 186 494 672 540 495) for a onetime distribution of these retained earnings U.S. securities (par) 106,280 87,956 96,800 107,300 Accounts receivable, net.. 7 127 141 by payment of a special dividend to policyholders whose Policy loans. 344 909 1,600 2,300 insurance was in force during November or December 1960 Policy liens.. 6 15 or January 1961 if they have a permanent or limited term Total assets. plan or convert from unlimited term to permanent or 106,823 89, 493 99,214 110,296 fimited term before September 14, 1963. The dividend Liabilities: will also be paid on unlimited term policies which mature Current 7,624 8,235 8, 484 8,656 by death on or after the November 1960 premium due date Operating reserves: 12,098 41,808 and before September 1963. 59,700 79.180 Premium waiver disability reBudget program--1. Death claims.-Payments to sur 3,933 4,326 4,600 5,000 viving beneficiaries continue to increase as new deaths Reserve for future installoccur among policyholders. ments on matured contracts. 4,761 4,799 4,900 5,200 2. Disability claims.-Payments to individuals who have Reserve for total disability.. 1,028 1,535 2,100 3,000 Reserve for unpaid special purchased total disability coverage and who subsequently dividend.... 19,715 9,715 become totally disabled began in 1960. 4. Dividends.-Payments began in 1962 and will be Total liabilities.. 29,444 80,418 89,499 101,036 completed in 1964. Government equity: 6. Policy loans made.-The policyholders who con Retained earnings. 77,379 9,075 9,715 9,260 verted their insurance from term to permanent plan were 1961 1962 125 serves.. This fund is used to make loans up to $100 to disabled veterans eligible for vocational rehabilitation who are without sufficient funds to meet their expenses (38 U.S.C. 1507). Repayments are used to make new loans. Administrative expenses are borne by the General operating expenses appropriation. WORKLOAD, AMOUNTS LOANED AND REPAID 1962 actual 1963 estimate 1964 estimate Number of loans made.. 2,262 2,000 1,750 Average per loan..- $100 $100 $100 Number of loans outstanding- 1,515 1,515 1,515 Average amount per loan outstanding. $50 $50 $50 Total amount of loans made in thousands). $226 $200 $175 Repayment of loans (in thousands) $240 $175 Program by activities: program: Other expense.- Cost of goods sold. Total operating costs, funded.. Total operating obligations.... Capital outlay: 1. Procurement,"distribution, and services program: Purchase of equipment.... |