Verhovayak Lapja, 1955 (38. évfolyam, 1-12. szám)

1955 / Verhovay Journal

Report of the Board of Directors of the Verhovay Fraternal Insurance Association to the XXIII Regular National Convention September 12, 1955

(Continued from Page 2)

branch manager; the applicant was the wife of the branch manager. Investigation revealed a case of fraud and the Board of Directors took appropriate action against the branch manager.

c. ) The war clause was deleted from all of our adult membership certificates (the war clause from the juvenile certificates was previously made void), even on those that already had been issued. As a result the beneficiary of any member who died in the Korean war received the full face amount of the certificate.

d. ) The Disability Waiver was introduced on July 1, 1952 and the rates thereon are based on occupational classifications. This benefit provides for the waiving of monthly dues payments in the event of total and permanent disability of a member. The benefit is issued only to males, and to females who are regularly employed in desirable occupations. The tqtal and permanent disability arising from accident or disease must occur before age CO and the benefits terminate at age 60. The Disability Waiver is also provided, where requested, in Payor Benefit cases.

The Association had one member thus far who was totally and permanently disabled. The Association’s liability terminated recently when the member no longer was totally and permanently disabled.

e. ) In those states where the law permitted, for the benefit of our juvenile members, wre put into effect, in our membership certificates, the full payment of the face amount at age 1, known as “full benefit at age 1”.

f. ) We increased the maximum amount of life insurance to $15,000; the double indemnity maximum limit to $5,000. In other words, a total maximum of the above two mentioned benefits of $20,000 on one life.

g. ) We introduced a certificate known as the Income Protector which, in the event of total or partial disability, occasioned by sickness or accident, would provide for loss of income. A detailed presentation of this Income Protector plan and the facts pertaining to its introduction are presented later in this report.

h. ) We introduced a Family Hospitalization Plan. A detailed presentation of this plan is reported later in this report.

i) The Association introduced, as of January 1, 1954, a new plan of insurance known as the Retirement Income at Age 65 plan. The basic benefit is a monthly income, beginning at age 65, which is guaranteed for a period of 120 months and fs payable thereafter as long as the insured may live. The contract also provides for payment of the face amount on death before the monthly income benefit begins. The face amount is $1,000 for each $10 of monthly income at age 65 for males, and $9 for females, or the cash value, if greater. At sge 65 each $1,000 face amount provides for $1,588 maturity cash, whieh the member upon reaching age 65 may elect to receive in a lump sum if he does not choose the monthly income option.

j. ) In 1954 the Association introduced the first of its term insurance plans for adults. At the present time we are offering to our members, or to new applicants, a term plan which is known as the “Five-Year Renewable and Exchangeable Term Policy”. This plan is renewable every five years, naturally at an increased rate at each renewal age, to age 60. We intend to introduce other term plans which will be for 10 years, 15 years, 20 years and term to age 65.

k. ) We increased the maximum life insurance to $5,000 for the ages of

56-60. ^

l. ) We approved the admission as members of women while pregnant.

m. ) We approved the acceptance, with certain restrictions, of sick benefitT claims completed by D, O. doctors (Doctors of Osteopathy).

n. ) The Pension Fund for all full-time employees who have been with the Association at least one year, was approved by the XXII Regular National Convention in 1951. Since 1952 the Association has been contributing $10,000 per year toward the Pension Fund. It is requested that this $10,000 per year be continued until all the required pension reserves have been completely funded. In addition to what the society contributes to the fund, each employee contributes a certain amount monthly to the Pension Fund, based on his average monthly earnings.

o. ) Employees Group Life and Accident and Health Coverage:

As of November 1, 1953 the Association put into effect a group life and a group health and accident plan for its employees, which naturally included the members of the full-time field staff. The Society grants these benefits at no cost to the employee. Under the plan the following amounts of life insurance shall be granted without cost to each employee, the service time to start from November 1, 1953:

From 2 months to 5 years service — $1,000 life insurance and double

indemnity

From 6 years to 1C years service — $2,000 life insurance and double

indemnity

From 11 years service and up — $3,000 life insurance and double indemnity

Under the Group - Accident and Health Insurance Plan all full-time employees of the Association, with the exception of the duly elected officers by the National Convention, in case of illness resulting from accident, shall receive after 30 days, benefits for a period of 13 weeks at the rate of $20.00 per week. In case of illness, the employee after 60 days shall receive benefits for 13 weeks at the rate of $20.00 per week.

p. ) We approved having sick benefit members who received the maximum sick benefits to automatically remain as members of the maiming benefit department. Such a member can ask for a cancellation of his maiming benefit rights in writing.

q. ) In accordance with our bylaws, and the insurance laws, we approved the combining of our funds and are operating on a one-fund accounting basis.

Wc request the National Convention delegates to retroactively approve our actions on the above mentioned changes and/or new benefits

introduced, especially so because these serve only the best interest of the organization.

In accordance with the action taken at our September, 1954, Board meeting wre forwarded to each branch a copy of the intended new bylaws. He wish to report that these were approved by 33,624 members without any change recommendations. With certain change recommendations the intended new bylaws were accepted by (5,586 members. A total of 723 members did not accept these bylaws.

It is an unfortunate fact that a certain number of our branches did not act on the new bylaws. In accordance with our present bylaws the National Convention will now have to approve the provisions of the new bylaws which were approved by the members at the December meetings, and if these are approved they will go into effect on January 1, 1956. Only new bylaw provisions, which will be presented for the first time at the National Convention, and if approved by the National Convention, will be forwarded after the Convention to the branches for approval by the members.

We wish to report also that the new bylaws were prepared together with the Rákóczi Aid Association officials. Instead of amendments to the bylaws, we prepared a completely new bylaw.

The Home Office employees have received salary increases at least four times in the last four years. These increases were made necessary by the continuous increased living costs, financial competition offered by other firms and institutions for good workers, merit increases, and the fact that first-class work can be expected only from those who are well paid.

The following financial, statistical and other data are submitted to the delegates of the XXIII Regular National Convention:

The results presented took into consideration the principles of accounting adopted by the National Association of Insurance Commissioners relative to reporting the operations of a fraternal insurance society at the end of the year on the Convention Blank of the Annual Statement. This method of reporting does not follow strictly the reporting of items of income and disbursement on a cash basis, rather it follows the reporting of items of income and disbursement on an incurred basis. This new accounting method was adopted by the National Association of Insurance Commissioners for all fraternal insurance societies as of January 1, 1953, and it gives management a valid year-to-year comparison of its operations. Since we are reporting on an incurred basis it is true that some of the items of income and disbursement will vary slightly from those contained in the General Ledger which is kept on a cash basis.

Since 1952 the Association has been reporting its financial operations on a one-fund basis. Since 1953 all records at the Home Office are kept on a one-fund basis. This method of accounting was adopted by the Board of Directors in September, 1952, upon the recommendation of the National Officers and is in accordance with the consolidation of funds provision of the bylaws adopted by the XXII Regular National Convention held September 10, 1951 in Pittsburgh, Pennsylvania.

The period of this report covers the four years — 1951, 1952, 1953 and 1954. i

The Admitted Assets, which is the designation of the balance obtained after deducting the not-admitted assets from the sum of the ledger and non-ledger assets, increased during the four-year period by $3,547, 972.35. The Admitted Assets on January 1, 1951 amounted to $11,820,883.79, while on December 31, 1954 these assets totaled $15,368,856.14.

The year-to-year comparison of the Admitted Assets is as follows;

12/31/1951 — $12,645.221.05 12/31/1952 — $13,515,399.64 12/31/1953 — $14.401,802.46 12/31/1954 — $15,368,856.14

The Admitted Assets of $15,368,856.14 as reported in our 1954 Annual Statement were made up of the following:

Combined Life Benefit Fund $14,684,390.60

Disability Fund (includes Sick Benefit, Income Protector and Hospitalization) $684,465.54

Included in the Combined Life Benefit Department total is an amount of $50,484.65 which is the balance of the Employees Pension Fund on December 31, 1954.

The Unassigned Funds, which is the Surplus of the society, together with the Solvency Ratio, was as follows:

1951- $

703,342.95 —

105.89%

1952— $

756,811.30 —

105.93%

1953— $

917,888.54 —

106.81%

1954— $1,175,218.96 —

108.28%

The Net Gain in Operations shows a yearly increasing trend in the earning power of the society.

1951 — $107,629.31

1952 — $120.486.32

1953 — $210,384.18

1954 — $273,208.80

The Net Gain in Unassigned Funds, which is the Surplus, was as follows:

1951 — $125,554.38

1952 — $ 53,468.35 ,

1953 — $161,077.24

1954 — $257,330.42

The amount of Insurance in Force on January 1, 1951 w'as $45,559,

836.00 while on December 31, 1954 the insurance in force totaled $50,781,

285.00 for an increase amounting to $5,221,449.00.

The Insurance in Force comparison for the four years is as follows:

1951 — $46,611.957

1952 — $47.900,792 ,

1953 _ $49.233,478

1954 — $50,781,285

The increase in Insurance in Force on a year-to-year basis is as follows:

1951 — $1.052,121

1952 — $1,288,835 . j