§1920 National Service Life Insurance Fund

Summary

The National Service Life Insurance Fund is kept as a permanent trust in the Treasury. All premiums paid for this insurance go into that fund. The money in the fund, plus any interest it earns, must be used to pay insurance claims, pay dividends and refunds, and to pay approved administrative costs. Payments from the fund happen when the Secretary approves them. The Secretary must set aside reserve amounts using accepted actuarial methods to cover future liabilities. The Treasury can invest the fund in U.S. government interest-bearing or guaranteed securities and can sell those investments when needed. For fiscal year 1996 only, the Secretary must reimburse the Department’s general operating account for administrative costs from the fund. That reimbursement can come only from surplus earnings left after claims are paid and reserves set aside, and only up to the amount of that surplus. The Secretary decides which administrative costs are properly tied to providing this insurance (including any added total disability income insurance).