The Department of Veterans Affairs (VA) administers eight government life insurance programs. By law, the costs of administering the Servicemen's Group Life Insurance (SGLI), the Veterans Group Life Insurance (VGLI), and the Veterans Reopened Life Insurance (VRLI) programs are covered entirely by premium income.
However, under existing law, the government must pay the administrative costs of the Veterans Special Life Insurance (VSLI), Veterans Mortgage Life Insurance (VMLI), United States Government Life Insurance (USGLI), National Service Life Insurance (NSLI), and Service-Disabled Veterans Insurance (SDVI) programs. In the case of the SDVI and VMLI programs, which provide insurance to disabled veterans, there are no surplus funds from which administrative costs can be recovered. Both of these programs receive significant government subsidies to help meet their claims and administrative expenses. The issue of paying the administrative costs of the USGLI, NSLI, and VSLI programs from excess program revenues has been raised several times in the past without further action.(1)
The Department of Veterans Affairs should work with Congress to amend Title 38 of the United States Code to permit the payment of administrative expenses of the USGLI, NSLI, and VSLI programs from their trust fund surpluses.
This proposal would bring the financing of the USGLI, NSLI, and VSLI programs more in line with other VA life insurance programs (SGLI, VGLI, and VRLI). Further, the financial impact on individual policyholders would be minimal (about $11 per policyholder per year).(2)
The President's fiscal year 1994 budget includes savings for this proposal of $25 million in fiscal year 1994 and $113 million over five years.
1. Data in the preceding paragraphs supplied by U.S. Department of Veterans Affairs, Washington, D.C., August 5, 1993.
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