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: 6. Policy loans made. 703 900 1,050 7. Policy liens established.. Financing: Revenues and other receipts: Policy loans repaid... Policy liens repaid.. Premiums earned.. Interest on investments. Number of policies.... Insurance in force. June 30, 1961 June 30, 1962 June 30, 1963 June 30, 1964 658,853 $5,842,933 $5,758,099 $5,673,000 $5,584,000 Financing.-Payments from this fund are financed primarily from premium receipts and interest on investments. Operating results and financial condition.-Favorable mortality experience on insurance written against this fund has kept death claims payments well below the amount of premium and interest receipts, thereby producing an annual increase in the retained earnings of the fund. The retained earnings are being reduced by the special dividend and any further excess will be paid to the Treasury. Revenue, Expense, and Retained Earnings (in thousands of dollars) 43,999 18,458 14,003 Payment of earnings (-).. -4,000 -5,000 -9,000 The fund finances the payment of claims on nonparticipating insurance policies issued before January 1, 1957, to veterans who served in the Armed Forces subsequent to April 1951 (38 U.S.C. 723). Policyholders were given 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 unlimited term insurance. Those who converted to a permanent plan also acquired the right to purchase total disability income coverage with an additional premium. The fund has accumulated retained earnings in excess of its anticipated liabilities. Provision was made (75 Stat. 495) for a onetime distribution of these retained earnings by payment of a special dividend to policyholders whose insurance was in force during November or December 1960 or January 1961 if they have a permanent or limited term plan or convert from unlimited term to permanent or limited term before September 14, 1963. The dividend will also be paid on unlimited term policies which mature by death on or after the November 1960 premium due date and before September 1963. Budget program-1. Death claims.-Payments to surviving beneficiaries continue to increase as new deaths occur among policyholders. 2. Disability claims.-Payments to individuals who have purchased total disability coverage and who subsequently become totally disabled began in 1960. 4. Dividends.-Payments began in 1962 and will be completed in 1964. 6. Policy loans made. The policyholders who converted their insurance from term to permanent plan were installations on a centralized basis. Printed matter is acquired in accordance with the rules of the Joint Committee on Printing from the Government Printing Office, the General Services Administration, a Veterans Administration-operated plant in Arlington, Va., and from commercial sources. Financing. Consuming appropriations reimburse the fund for the cost of supplies and equipment provided and services rendered by the above specified activities, including related expense such as transportation, inspection, and testing. Supply depot operating costs are recovered from the appropriations and funds receiving supplies and equipment from the depots. Operating results and financial condition.-The increase in procurement and sales volume in 1963 and 1964 over 1962 is due primarily to an accelerated program for replacement of worn and obsolete equipment in Veterans Administration hospitals. The fund operated at a loss of $96 thousand in 1962. It is anticipated that this loss will be recovered in 1963 and that the Supply fund will break even in 1964. An increase in capital of $317 thousand is reflected in 1962 due to capitalization of supply depot operating equipment on hand July 1, 1961. Revenue, Expense, and Deficit (in thousands of dollars) 1 Balances of selected resources are identified on the statement of financial condition. |