Evening star., 1950-06-25
GI Insurance
Cost Studied
By Rowland Eyons. Jr.

Studied |
By Rowland Evons, Jr.
Congress is cooking a critical
eye at CT insurance, the biggest
single life insurance operation in
the world.
Changes in the National Service
Life Insurance Act, some of them
possibly drastic, seem assured. 1t
has not been proposed, however, to
change policies now in effect.
Three congressional inquiries
are under way or projected:
/. A House expenditures sub
committee has spent two months
in intensive hearings on the act
and the way the Veterans Admin
istration has handled it. Chair
man Hardy, Democrat, of Vir-
ginia plans to report findings to
Congress by July Is.
2. The House Armed Services
Committee has been looking into
a bill introduced by Representa-
tive Kilday, Democrat, of Texas.
It is really an enormous group in
surance plan, to establish brand
new system Of gratuities for all
survivors of men in the armed
forces.
8. The House Committee on
Veterans Affairs will put it's staff
to work this summer to recon-
mend "a new law providing insur-
ance protection to members and
veterans of the armed forces"
Total Cost Estimated
Testimony taken by the Hardy
committee probably will give the
Veterans Committee staff most of
the information it needs.
Administrative cost of the NSLI
Act and payment of the $28 bill
lion first special dividend are
the two main reasons for the
furry in Congress, says Represen-
tative Davis, Republican, of Wis
consin, member of a special insur-
ance subcommittee of the House
Veterans Committee.
1--WE feel the time has come for
a complete study of the NSLI act, u
he told a reporter.
At its peak insurance under the
act totalled $126 billion. Today
about S. million veterans have
$50 billion insurance.
The act was passed in 1910 as
an amendment to a revenue bill
No hearings were held. Yet the
Hardy Committee staff estimates
it's total cost to date is well over
IS billion.
The staff spent several months
establishing that cost estimate
It decided that between July l,
1949. and June 80. 1850, the ad-
ministrative cost alone was $50
million which. includes no benefit
payments.
The staff attributes the rest oi
the total S. billion cost to:
l. A special three per cent in
terest rate on money in the NSL1
fund, which is invested in special
Government securities. Last De-
cember 81 the fund contained ST.
billion.
2. The Governments response
bility under the act to pay pre-
miums for totally disabled vet
Grams and to underwrite free in
Surance for aviation cadets.
3. Use of a life expectancy
table based on the period 1843 to
1857. Expectancy is much highe,
today.
4. Several other items, not
least of which is Uncle Sans OBJ
legation to underwrite all extra
hazard deaths. Insurance on serv-
ice-connected deaths is paid, not
from the NSLI fund, but from the
Treasury.
Cost 'Conjectural'
Harold w. Breining, VA insur-
ance boss, told the Hardy Com
mittee "the cost (of NSLD is con-
Ijectural."
Asked what the 1949 admins
ltative cost was. he said II am not
prepared to give it because I dc
mot think it is obtainable."
| Mr.. Breining said fatty he does
not think service insurance is the
answer to the Governments re-
Isponsibility.
4 "In time of (another) emer-
gency." he told the committee, 81
think the rnanpower to operate an
insurance system -. would not
be available"
He said the original idea of G1
insurance "was to avoid what
lsome persons characterized as the
evils of the pension system. =.
would say it had not to any great
degree altered the cost Of graft.
uties" compensation and pension
for veterans and their survivors)
Mr.. Breining was referring te
the idea behind passage Of the
IGovernment Life Insurance Act
| (for World War y on which NSLl
lis patterned.