VA Life Insurance: Premiums and Program Reserves Need More Timely Adjustments
HRD-92-71
Published: Jul 20, 1992. Publicly Released: Jul 20, 1992.
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Highlights
Pursuant to a congressional request, GAO reviewed the Department of Veterans Affairs' (VA) Servicemen's Group Life Insurance Program, focusing on the: (1) adequacy of program reserves; and (2) extent of the government's liability for claims under the program.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Veterans Affairs | The Secretary of Veterans Affairs should reduce the contingency reserve held by Prudential to $25 million and use the excess funds, if necessary, in lieu of transfers from the revolving fund to provide a portion of the additional operating reserves. |
Closed – Not Implemented
VA has disagreed with the recommendation. The agency believes that $50 million is the proper level for this reserve.
|
| Department of Veterans Affairs | The Secretary of Veterans Affairs should compute each year the true premiums to be paid by Program participants and adjust premiums, as appropriate. The Secretary should consider excess funds in the contingency reserve as a program resource when making this computation. |
Closed – Not Implemented
VA believes that it sets true premiums and plans no action on this recommendation.
|
| Department of Veterans Affairs | The Secretary of Veterans Affairs should negotiate with Prudential to amend the contract to explicitly state which party is responsible for paying peacetime claims in scenarios that were the subject of discussions between VA and the contractor during 1990. |
Closed – Not Implemented
VA disagrees with this recommendation and plans no action.
|
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Topics
BeneficiariesContract administrationFinancial analysisFinancial managementInsurance premiumsInsurance regulationLiability (legal)Life insuranceRevolving fundsVeterans benefits