Summary: GAO reported on the administration of the Servicemen's Group Life Insurance (SGLI) program, focusing on the program's coverage of the Ready Reserve. GAO found that a large number of the Ready Reservists are not paying premiums and as a result, are receiving free insurance coverage. Several uniformed services are not complying with the law's requirement to forward funds to the Veterans Administration (VA), which is responsible for collecting payments, on behalf of Ready Reservists who do not pay premiums. The uniformed services and the VA are having some difficulties in determining the eligibility of certain members of the Ready Reserve. These problems have existed since SGLI coverage was extended to the Ready Reserve. The law grants automatic coverage for eligible Ready Reservists, but does not provide for termination of coverage for nonpayment of premiums. A provision in the law to terminate insurance for nonpayment of premiums would greatly alleviate delinquency problems. Three major branches of the armed services forward to the VA only the actual funds collected, as they contend the SGLI program is intended to be self-supporting and should not be Government subsidized. GAO agrees that the program should be self-supporting and the law should be changed to allow the uniformed services to submit only premiums collected, if a termination provision is included in the SGLI law. Until the law is amended the Ready Reserve forces should be required to forward all funds due VA. Both interpretations of the law and VA rulings have been unclear on whether all new enlistees are eligible for coverage. There is also a question as to whether eligibility should be linked to a formal commitment to attend unit training assemblies, or whether actual attendance should be required. The law should be clarified to delineate these two points of eligibility.
