Reserve Forces:

Follow-up on the Ready Reserve Mobilization Income Insurance Program

NSIAD-97-203R: Published: Jul 18, 1997. Publicly Released: Jul 18, 1997.

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Mark E. Gebicke
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Pursuant to a congressional request, GAO reviewed the Department of Defense's (DOD) Inspector General's (IG) report examining the Ready Reserve Mobilization Income Insurance Program, focusing on: (1) the need for such a program; (2) DOD's implementation of the program; (3) the program's actuarial soundness; and (4) the government's potential liability for insurance payouts to reservists who were activated for Bosnia and may claim that they were never provided an opportunity to enroll in the insurance program. GAO did not independently review the Ready Reserve Mobilization Income Insurance Program or meet with DOD officials to verify the accuracy of the IG's work.

GAO noted that: (1) it believes that the DOD IG's final report provides a balanced overview of the design, implementation, and future viability of the program; (2) it agrees with the report's conclusion that the program is not actuarially or fiscally sound and should be suspended while DOD reexamines the need for and possible alternatives to the program; (3) it believes that the report would have been more thorough had the IG incorporated two additional comments that GAO made on the draft report concerning: (a) the extent to which DOD addressed or discussed with Congress concerns raised about program volatility, experience data, anti-selection, and pre-existing condition; and (b) the report's conclusion that DOD did not have sufficient time to market the program, since GAO believes that DOD had sufficient time to develop a successful marketing plan; and (4) it found no legislative provisions or implementing instructions that would authorize retroactive enrollment in the program or give rise to government liability for payment to reservists in Bosnia who were not enrolled when activated.

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