THE UKRAINIAN NATIONAL ASSOCIATION FORUM (04/16/00)

THE UKRAINIAN NATIONAL ASSOCIATION FORUM

The UNA's actuarial report for 1999

by Stefan Kaczaraj
UNA Treasurer

Every insurance company - fraternal, commercial, or mutual - must file an annual report of financial conditions each year in February for prior year. Besides this requirement, each insurance company receives a report from its actuary. This actuarial report is a review of the entire operation of the company and an assessment of its profitability, strengths and weaknesses.

Bruce & Bruce Com., Consulting Actuaries, stated the following: "As an overview, 1999 was a year of major restructuring: fraternal benefits drastically changed (necessarily); the new computer system was implemented: the products to members were made more competitive with the introduction of a new ratebook; the complete portfolio was refilled in New Jersey in satisfaction of their new law; new reserve factors were installed; and the triennial examination by New Jersey was completed. Any one of these projects represents a major undertaking. The fact that all were absorbed in one year is a great tribute to the industry and abilities of the officers."

The actuaries examined four major areas of UNA operations: insurance, investment, surplus and expenses. The Executive Committee of the Ukrainian National Association would like to share the comments and findings of Bruce.

The first facet discussed is the UNA surplus and negative and positive changes affecting it. During 1999 the UNA surplus decreased to $6,978,000. The solvency ratio is $111.75 to every $100 of liabilities. If one adds the security valuation reserves to the surplus, as analysts do, the solvency ratio rises to $113.95. This is a very high solvency ratio compared to the 105 percent held by most commercial companies.

The actuary concluded that the UNA's insurance business is healthy and doing well, although the volume of insurance and annuity sales should be increased. In comparison to other fraternal societies, the UNA has lower in-force amounts of insurance (by $2,304 per policy) as well as lower insurance amounts issued per policy (by $5,000). Most societies issue $15,000 of insurance to the UNA's $10,000. As a result of these lower amounts, the premium income also is lower by a comparable amount. The UNA has the best lapse ratio among all fraternal societies. We also have a better mortality ratio compared to other fraternal societies.

Premiums provide the main source of profits. UNA reserves declined due to heavy maturities and surrenders, which are not being replaced. This is correctible via strong sales of UNA annuities and new improved insurance policies - although time must be given for the correction to take place.

The UNA's investment portfolio continues to be of the highest quality. The UNA holds 73 percent of its assets in bonds. The average fraternal holdings are 86 percent. The UNA has 10 percent invested in common and preferred stock compared to 6 percent invested by other fraternal societies. We also have 13 percent invested in mortgages to members, while most fraternal societies hold only 3 percent in mortgages.

The UNA expenses and losses also were examined by the actuary. He concluded that the losses were not attributable to any operational errors, but were primarily a reflection of the last two decades. While expenses were reduced significantly, further reductions must be taken in 2000. Fraternal benefits were cut and must be maintained at manageable levels. All expenses must be reduced to $3 million for the UNA to be competitive with other fraternals of comparable size.

In conclusion, strong sales of the UNA's improved insurance products and annuities and a further reduction of expenses, particularly in the fraternal area, in time will result in renewed growth of the UNA. The UNA has the financial strength to sustain all operations if continued corrective measures are followed and given time to take effect.

"Dial All Day for the UNA" plan to benefit The Weekly Press Fund

CHICAGO - Sputnik Global Telecommunications Corp., an Illinois corporation, has designed a telecommunications fund-raiser to benefit The Ukrainian Weekly Press Fund. Mr. George Stromeckyj, president of Sputnik Global Telecom. Corp. has called the plan "Dial All Day for the UNA."

Sputnik Global Telecom. has secured the services of Touch Tone Communications of Whippany, N.J., to be the long distance service provider for the press fund. As an authorized independent agent, Sputnik Global Telecom will receive commissions from Touch Tone Communications for every client that joins the fund and uses the services of Touch Tone Communications.

A portion of these commissions will be donated to the The Ukrainian Weekly Press Fund. The percent of the commissions donated to the fund by Sputnik will be directly proportional to the total volume usage by members of the fund. In other words, as the fund gains more members and the user volume increases, the percent age of Sputnik's charitable contribution to the fund will increase accordingly.

Touch Tone Communications has constructed a fiber optic network that utilizes only the highest quality providers to carry all of their calls around the world. Members of the fund can be assured that their phone calls are being carried on Tier 1 networks, identical to those used by the largest telecom providers.

Sputnik Global Telecom is starting off the fund-raiser by offering potential members a very competitive calling plan with the following features: 7.9 cents per minute domestic rate, 29.9 cents per minute to Ukraine. These rates apply 24 hours a day, seven days per week. There are no monthly service fees and no hidden costs (excluding taxes). There are no minimum usage requirements and the client can cancel the service at any time, for any reason. Unlimited Internet access will also be available for only $12.95 per month utilizing a local dial up number.

For more details and to sign up for the fund-raiser readers may contact Sputnik Global Telecommunications Corp. by dialing toll-free: 1-888-900-UKIE. Callers should mention that they want to sign up for the "Dial All Day for the UNA"/telecom fund-raiser. Members do not have to change their current long distance service provider to participate.

Mr. Stromeckyj, a lifelong member of the UNA, Branch 399 in Chicago, proposed his telecom fund-raiser to his branch secretary, Andrij Skyba.

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