1 Balances of selected resources are identified in the statement of financial condition. Government equity: Retained earnings (total Government equity).. There are available for leasing to Federal employees 128 housekeeping units located at the Veterans Administration Hospital, Perry Point, Md. These units were constructed prior to World War I and consequently are in need of considerable repair. Income derived from rental of these quarters is necessary for the extensive backlog of modernization, maintenance, and repair (38 U.S.C. 5012(a)). These quarters serve a definite need in providing an incentive to recruit and retain the services of key employees. Revenue, Expense, and Retained Earnings (in thousands of dollars) 22 Unpaid undelivered orders 1 (total Government equity). 4 1964 actual 1 93 -93 3 Financial Condition (in thousands of dollars) 1963 actual 1964 actual 3 1 3 4 1 3 3 3 1965 estimate 3 120 -120 Analysis of Government Equity (in thousands of dollars) 1965 estimate 120 120 3 3 1 3 4 1 1966 estimate 3 3 120 -120 1965 1966 estimate estimate 1966 estimate 120 120 1 3 4 3 3 3 3 1 The changes in these items are reflected on the program and financing schedule. 4,500 -27,735 4,500 -30,898 4,500 4,500 -34,404 | -37,936 Total Government equity... -23,235 -26,398 -29,904 -33,436 Program by activities: Operating costs, funded: Claims paid on guaranteed premiums of servicemen's commercial life insurance policies.... Capital outlay, funded: Claims receivable established.........-- 1964 actual Total program costs, funded—obli- Collection of claims receivable.... 21.98 Unobligated balance available, start of Object Classification (in thousands of dollars) 1964 actual Financing: Receipts and reimbursements from: year. 24.98 Unobligated balance available, end of year... 1,332 1.469 5,638 -231 -847 -163 5,083 Total Government equity... 23,235 -26,398 -29,904 -33,436 24,049 28,000 538 5.900 35,369 31,020 New obligational authority (appro- SOLDIERS' AND SAILORS' CIVIL RELIEF For payment of claims as authorized by article IV of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended (50 U.S.C. App. 540-548), $25,000, to remain available until expended. Program and Financing (in thousands of dollars) 1965 1966 estimate estimate 1964 actual 1,093 1,210 6,962 8,200 8,055 9,410 24 3 27 -5 -64 41 1965 1966 estimate estimate 1,578 40 5 45 32,000 6,200 39,778 90 1965 1966 estimate estimate -4 -1 -41 1 31 Identification code 10 70 -4 -1 -1 25 71 Obligations affecting expenditures.. Expenditures.. 93 Program and Financing (in thousands of dollars)---Continued 94 Relation of obligations to expenditures: Receipts and other offsets (items 11–17). Cash transactions: Gross expenditures.. Number of settlements. 1964 actual Revenue. Net loss for the year.. Deficit, end of year.... -5 23 4 -4 The fund finances claims arising from the guarantees 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. Administrative expenses are paid from the appropriation, General operating expenses. Budget program-Insurance program.-Claims paid on guaranteed premiums are made to commercial insurance companies in cases where the servicemen failed to make 9,076 premium payments which were guaranteed by the Government. 1,330 10,406 27 -5 1965 1966 estimate estimate 45 -5 40 4 -3 41 45 -5 1964 actual Financing.-Payment of claims against this fund are financed from collections of claims receivable, revenue, and appropriations as needed. The last appropriation to this account was made in 1959 through Public Law 85-766. It is anticipated that present unobligated balances and additional income will fund this program only through 1965; therefore, an appropriation of $25 thousand will be required in 1966. 26 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 5 the deficit to $1.9 million in 1964 with nominal losses continuing through 1966 with an estimated deficit of $2 million. Revenue, Expense, and Retained Earnings (in thousands of dollars) The activity of the fund is indicated in the following table: 31 -5 26 3 -3 26 31 -5 1965 estimate 1964 actual 1965 estimate 1966 estimate 1966 estimate 1 1 44 45 31 -44 -30 -43 -1,900 -1,943 -1,987 -1,943 -1,987 -2,017 1966 estimate 3 11 14 3 2,028 -2,017 || 1966 estimate 5,690 812 57 4,000 18,099 Identification code 29-00-4010-1-3-805 10 70 17.261 Program and Financing (in thousands of dollars)—Continued 71 Obligations affecting expenditures. 72.98 Obligated balance, start of year.. 74.98 Obligated balance, end of year.. 90 Expenditures. 93 94 Relation of obligations to expenditures: Receipts and other offsets (items 11-17) . Cash transactions: Gross expenditures.. Applicable receipts. 1964 actual Under existing legislation, 1965.—A supplemental request will be made to transfer surplus retained earnings from the Veterans special term insurance fund to advance initial capital to the Veterans reopened insurance fund. This fund will finance payment of claims and administrative costs on on nonparticipating insurance policies issued after April 30, 1965, and prior to May 4, 1966, under the three insurance programs (1) Veterans servicedisabled standard insurance, (2) Veterans service-disabled rated insurance, and (3) Non-service-disabled rated insurance-established by provisions of the National Service Life Insurance Act of 1940, as amended (38 U.S.C. 725 (b) and (c)).. Each program will be self-contained and premiums may be adjusted to insure that each is self-sustaining, as required by law. Separate accounting and actuarial records must be maintained for the three programs for the purpose of determining the actual program costs and to provide the basis for adjusting each program premium rate 7,528 independently. 3 1965 1966 estimate estimate 2,833 18,099 -2,873 -33.670 Number of policies... Amount of insurance.. -40-15.571 1,186 -1,186 -9,622 -1,226-24.007 1,647 9,658 -2,873 -33,665 June 30, 1966 395,000 $3,477,000 Budget program-1. Death claims.-Payments to beneficiaries are expected to reach $7.5 million in 1966. -461 -30,798 2. Disability claims.-Payments to policyholders who purchased total disability income coverage are expected to begin in 1966 and are estimated at $9 thousand. Financing.-Payments will be financed from premium -1,043 receipts and interest on investments. -1,368 -1,690 Service-disabled standard insurance program.-This program will finance payment of claims on policies issued to veterans with service-connected disabilities, but who are insurable according to the standards of good health established by the Administrator. The estimated number of policies and amount of insurance in force follows (dollars in thousands): June 30, 1965 125,000 $1,110,000 Operating results and financial condition.-It is expected that premium and interest income will be sufficient to pay death and disability claims and to set up necessary reserves. Service-disabled rated insurance program. This program will finance payment of claims on policies issued to veterans with service-connected disabilities who do not qualify for insurance at standard premium rates solely because of their service-incurred disability. reserves. Service charge program.-Amounts collected from policyholders for administrative expenses are credited to this program. Payments are made to the appropriation, "General operating expenses," and to the General fund receipts in the Treasury for cash advances and interest thereon. Budget program-1. Payment to "General operating expenses" appropriation. The administrative cost of issuing insurance policies, processing claims, and maintaining accounts is estimated to be $1,650 thousand in 1965, and $4 million in 1966. Revenue, Expense, and Retained Earnings (in thousands of dollars) 1965 1966 estimate estimate Service-disabled standard insurance program: Total revenue_ Net income, service-disabled standard Service-disabled rated insurance program: Total revenue. Net income, service-disabled rated insur- Budget program-(a) Death claims.-Payments to beneficiaries are expected to reach $812 thousand in 1966. The mortality rate will be exceptionally high because of the short average life expectancy of the insureds. Therefore, an incontestability clause will be included in the contracts to mitigate the otherwise uncontrollable initial capital impairment in this program. Net loss for the year. Financing. Payments are financed primarily from pre- Analysis of deficit: mium receipts and interest income from investments. Deficit, start of year.. Deficit, end of year.. Operating results and financial condition. It is expected that premium and interest income will be sufficient to pay death and disability claims and to set up necessary Non-service-disabled rated insurance program: Total revenue.. Net income, non-service-disabled rated insurance program....... Service charge program: Net loss service charge program. Assets: Treasury balance.. Total assets... Liabilities: Financial Condition (in thousands of dollars) Premium waiver disability reserves... Reserve for future installments in matured contracts. Total disability. Total liabilities. Government equity: Unobligated balance transferred from Vet- End of year. 1964 actual Total Government equity.......... 2,876 2,876 1,186 1,359 72 151 10 2,778 1,650 1,650 -1,552 98 22,620 22,650 8,500 8,520 1,182 1.184 1,184 1,368 4,072 -2,704 -2,704 -1,552 -4,256 1,883 25,000 5 26,888 9,627 18,522 154 1,155 36 29,494 1,650 1,650 -4,256 -2,606 |
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