ABSTRACT
In November 1975, representatives of the General Accounting Office's (GAO) Federal Personnel and Compensation Division and the House subcommittee met and agreed on the nature and scope of a proposed GAO study of the Federal Employees Group Life Insurance (FEGLI) program. The review revealed a basic misconception about the FEGLI program. The GAO developed a package of choices for restructuring FEGLI to make it more attractive without increasing cost. The GAO had discovered that the use of actuarial and funding concepts normally employed in retirement programs was the primary cause for FEGLI premiums being higher than those of non-federal insurance programs. Since FEGLI is, in effect, a self-insured program, the GAO recommended that Congress rescind the requirement that FEGLI pay state premium taxes and insurance company risk charges. In response to GAO reservations about advertising the program as low-cost insurance, the commission issued a more accurate, informative, and descriptive pamphlet on the FEGLI program.
