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T, 1059 as follows: 1953 $192,177 1955 $ 286,138 1952 198,564 1956 297,491 1953 196,887 1957 308,248 1954 203,441 1958 311,280 $791,069 ft203,157 Adu Or Junior Cuk Vala« Potst V»lm» $ 6.00 15.00 22.50 30.00 37.50 45.00 52.50 60.00 67.50 75.00 150.00 45 52 60 67 T5 Cuk Vala« 6 OTHER IN8URAN0E PntNti*« »•tat T*1M $ 5.00 12.00 18.00 24.00 30.00 36.00 42.00 48.00 54.00 60.00 120.00 15 22 8 120 VMsto 1 tmr Itntegi Difitadi to PNttto 1955 $299,495 $286,138 95.5% 1956 308,928 297.491 96.3% 1957 311,201 308.248 99.1% 1958 378,624 311,280 82.2% Net Rat« Bftte Cuk Valve 5 $ 4.00 10.00 15.00 20.00 25.00 *30.00 35.00 40.00 45.00 50.00 100.00 12 18 24 30 96 42 48 54 60 -J ,'y »4, -ZAJEDNICA*' *t Dividend members Paint Vain« 4 10 15 30 25 30 35 40 45 50 100 SPECIAL PLAN« Value ftlw $ 500 $ 6.00 6 1000 15.00 lfi 1500 22.50 22 2000 30.00 90 2500 37.50 3T 3000 45.00 46 3500 62.50 52 4000 60.00 60 4500 67.50 67 5000 75.00 75 10000 150.00 150 Tear 1955 30 60 30 Income $586,178 1956 599.415 590.039 1957 591,431 596.391 1958 588,574 573,347 Profit $53.971 9.376 4.960 15.227 Jk. Cvetnich, Louis Vlasic, Alionso Prettyman, Richard Petrin, Joseph Major, Joseph Primorac, Ivan Babich, Carol 1 Kure, Rhodames Belles, Raymond Polich, Roselyn Tressa, Barbara of Pag« O Pasavic, Thomas Kapetan ovi c, Victoria Vierra, Ronald Jurkovich, Theresa Rozich, Judith Stimac, Carol Zorich, Jean Gomes, Frank Katalinich, Lucille Blaze, Matthew Staroschulk, Myron CANADA \n\n Having served the Union as Consulting Actuaries since I 1950, it is a privilege to bring to this Convention a favor able report on the last four years' operations. The Union has been eminently successful during the last four years, particularly during the difficult times sur rounding the economic recession during 1957 and 1958. Because of that recession, the four year summaries are not quite as favorable as they would have been otherwise. How ever, it is our observation that all fraternal societies and commercial companies were adversely affected by the re cession, but the Union was affected to a lesser degree than most. Since the last Convention the Union has grown con stantly and steadily to the point where it can now boast of 110,158 members for $89,259.999 of insurance in force. The Union claims the most insurance in force of any fra ternal in Pennsylvania, the largest fraternal state in the Union. In addition, the insurance in force in the Union, ex ceeds that reported by the largest fraternal in 43 states, including such heavily populated states as New York, New Jersey, Massachusetts, California and Indiana. In a report of this nature it is impossible to cover all aspects of the four year history since last Convention. The topics which have been selected for comment are those which can best be understood by the delegates without go ing into undue technicalities, but which, at the same time, will present a reasonably comprehensive picture of the cur rent status of the Union. Solvency Ratio As of December 31, 1958, the solvency ratio stood at 108.29%, which indicates that the Union holds assets of $108.29 of admissible assets behind each $100 of liabilities. This solvency ratio compares very favorably with the av erage solvency ratio for the 5 largest companies in the country of 107.54%. Since the last Convention, the surplus of the Union has weathered some severe storms. Notably, the Union survived the recession in contrast to many insurers without showing an operating loss. Although the surplus contributions were less than in normal years, the results, in the opinion of the antuaries, were very satisfactory. Since the last Convention, the Union has continued its reserve strengthening program and at the same time, be gan siting aside funds with which the Convention expen "ses could be met. Then, too, the Union paid very liberal dividends in the four year period since the last Convention, and did not reduce its dividend scale during the recession, as was done by many other fraternal societies and commer oial companies. Benefits And Payments To Members In the four year period from 1951 to 1954 inclusive, the Union paid $6,260,137 in benefits to members. In the four year period ending December 31, 1958, the Union paid $8,233,592 representing an increase over the previous four year period of 31.5%. The payment of over eight million dollars in benefits to its members shows that the Union is filling a very real need and is performing valuable services its 110,000 members. Dividends Immediately following the last Convention, dividend payments to members on life insurance certificates were increased. This action was taken, notwithstanding the fact that the then dividend scale was already extremely liberal. The new scale was continued in the past four years, in spite of economic recession and decreased nationwide profits. Dividend payments the last 8 calendar years are Tear Iniut Tear AMUt Total dividends in the last four years amounted to $1,203,157 or 52% more than the dividends paid in the pre ceding four year period. These dividends are extremely lib eral, as is demonstrated by the fact that the Union ranks 10th in the country in the total volume of dividends paid. The Union pays far more dividends in some cases than so cieties with much more insurance in force. This is apparent since the Union ranks 22nd in total volume of insurance force, yet is 10th in the payment of total dividends. The Union also returns a far greater proportion of profits to, the members as dividends. The following table shows that in three of the last four years the Union returned over 95% of total earnings in the form of dividends: LIFE INSURANCE Twenty Year Endowment Either Department (New or Increased Business) Anout I marine* $ 500 1000 1500 2000 2500 3000 3500 4000 4500 50001 1C Croatian Fraternal Union's 65th Anniversary Campaign Prize Awards LIFE INSURANCE Twenty-Pay Endowment Either Department Adult Or Junior (New or Increased Business) Amount Insurance $ 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 10000 Ihcome Defender Benefits .. $5.00 Junior CSO Term Insurance Sick Benefit Protection 1. oo Disability Benefit Protection 1.0* Old To New Disability Transfer 1.0$ Insurant $ 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 10000 Actuaries Report To The Tenth C.F.U. Convention It should not be expected that the Union can continue to pay such liberal dividends. The changing economic con ditions in the past four years have indicated that the in creasing expenses of operating an insurance organisation and the slightly increased claim costs are not completely offset by improved yields mi investments. Then, too, the dividends which are* currently being paid were calculated many years ago under totally different circumstances. It is inevitable that inequities would arise, so that some are receiving too little dividends, whereas others are receiv ing too much. Since some reduction quite likely will need to be made in the immediate future towards reducing the total amount of dividends to be paid, this is the appropriate time to re-establish equity between members and classes of members. A dividend study is currently in progress by the actuaries to determine each member's equitable share of profits, recognizing mortality savings, excess interest earnings and losses from administration expenses where they occur. The actuaries are recommending for the good of the Union and for the benefit of the members, that dividend options should be permitted. All members should not be required to accept their dividends in cash. Many will pre fer to leave them on deposit with the Union to earn interest at such rates as the Board of Directors may declare from time to time. Others may wish to apply their dividends to purchase additional paid up insurance of the same type they are purchasing with their monthly premiums. Others will prefer to apply their dividends each year towards the pur chase of one year term insurance which would increase their death benefit at time of death. If they do not already have the necessary authority, the Officers should be given full authority to place into effect such dividend options as they deem advisable. Interest The net rate of return after deducting investment ex penses has been constantly increasing in the past 8 years, as the following table will show: Year •f Return Tear •f Re 1111» 1951 2.96% 1955 3.00% 195° 2.96% 1956 3.06% 195 3.01 1957 3.15% 1964 %M% 1958 3.23% Average .. 2.98% Average 3.11% The Union has not only earned the interest which is re quired to be earned in order to mafhtain its interest bearing liabilities, but, at the same time, has earned an excess in terest profit. The actuaries are not investment experts and cannot give investment advice. However, the actuaries can point out that the quality of the investment portfolio of the Union is exceptionally high. The best single indication of this quality is the observation that only one bond out of over twenty-three million dollars invested in bonds is considered to be unamortizable according to the standards set forth mittee. We do not know of any other organization of com parable size which can make such a claim. In the opinion of the actuaries, investment in high quality securities is very fitting for trust funds held in behalf of widows, orphans and members. Insurance In Force As of December 31, 1958, insurance In force was $89.259,999, representing an increase of $6,588,227 over the insurance in force as of December 31, 1954. The increase in the four year period is 47.5% higher than the increase by the National Association Insurance Commissioners Com enjoyed in the four year period ending in 1954. Manage ment is to be congratulated on this achievement. This achievement is particularly significant in view of the low acquisition expense at which this business was produced. The Juvenile Department has been exceptionally suc cessful. Although the Union is 22nd in size according to the insurance in force rankings, only four societies were able to increase the number of juvenile certificates by more than the Union. This is truly a remarkable achievement. At the same time, it must be observed that the average certificate for the Union is $811.00, as compared with a nationwide average erf $1,381. We urge the Union to con centrate selling larger certificates and to avoid selling $500 certificates if at all possible. The reason is that the expenses incurred for fixed overhead to issue a certificate UFE INSURANCE Endowment Age 66 Adult Department Endowment Age 86 (Mew or Increased Business) LIFE INSURANCE Educational At Junior Department Ane 18 Endowment (New or Increased Pnsiness) Amount Caah fclit Imwum* Family Plan, $5,000 Unit $30 00 Family Piaa, $10,000 Unit 60.00 Single Premium, Per $1,000 20.00 CAMPAIGN AWARDS Choiee Trip To Yugoslavia Or Caribbean Cruise are so great that a profit eaa never be realised ea a $500 certificate. The Officers should also consider the possibility of add ing more coverage to the present members so as to increase their protection. Many members applied for certificates of $1.000 years ago when the purchasing power was more than double today's purchasing power. Inflation has increased the need for insurance to the point where twice as much insurance is needed today as 20 years ago. Sick Benefit Department The administration of sick and accident benefits is one of the most difficult tasks in the insurance field today. Any sick and accident department which is able to report a profit in these difficult times can be considered successful. A summary of the income and disbursements for the last four years for the Union's Sick Benefit Department is as follows: Claims- Beirrtoi and Expenses $532.207 Total $2,365,598 $2,291,984 $73,614 Notwithstanding the comparative success demonstra ted by the foregoing table, some revisions must be made in the rates and benefits now offered. The rates have been in effect for many years, notwithstanding the constant rate increases of Blue Cross and other similar organizations in the past 8 years. Also, some additional revenue must be provided to establish additional reserves being requested by some Insurance Departments. Steps in this direction are in the best interests of all sick and accident members and should be supported. Salaries The salaries paid the top Officer* of the Union are be low the salary level paid commercial companies and fra ternal societies of comparable size. Officers who can man age the Union's twenty-five million dollars of assets so suc cessfully and who can bring in new members and increase insurance in force at such low acquisition expenses are worth many hundreds of thousands of dollars annually to the Union. Many financial institutions the size and stature of the Union compensate their Presidents at the rate of $17,500 per year. To equal what other fraternal societies of com parable size will be doing in the coming year, a salary of not less than $15,000 would be required. Anything below this level will represent, in our opinion, inadequate compen sation for the quality of Services received. We urge the Union to increase the compensation of its top Officers to a level consistent with the standing and position of the Union. Summary schedules to show the salaries paid by other in surance organizations for both Officers and employees have been submitted to the Officers to support this recommen dation. Recommendations The following recommendations ara made by the ac tuary: 1. Offer a limited number of dividend options, the de termination of the benefits and the manner of application to be left to the Officers. 2. Revise the dividend scale to a more equitable basis. The new scale should be so designed that the Union can increase or decrease the total dividends to be paid in any year to reflect the actual profit experience during that year. The Union must retain a larger share of the profits each year for the safety of the membership. 3. Increase the salaries of the top Officers to reflect the value of past services, and, at the same time, to anti cipate future inflationary trends which otherwise act to re duce the effective purchasing power of the salaries of the Officers each year. 4. Increase the average size certificate in force by sell ing larger amounts of insurance and by eliminating as far as possible the sale of $500 certificates. It should be antici pated that between now and the next Convention, the min imum contract which can be sold will need to be increased to $1,500 or possibly $2,000. 5. The present managerial theories and principles as to conservative and economical operation should be con tinued. Emphasis on the need for new members and in creased amounts of insurance should be continued. Conclusions The Union has enjoyed a very favorable experience dur ing the past four years, particularly in view of the difficult economic times. Reserves are maintained on a conservative basis, so as to guarantee members that their claims will be paid in full as they arise. The significant operating ratios indicate the high quality of leadership enjoyed by the Union and explain why the Union is a leader in its field. It has been a privilege and a pleasure to be associated with the Union and we appreciate the fine cooperation ren dered by the Officers ki the completion of aH actuarial as signments. Respectfully submitted, Harley N. Bruce and Associates by R. B. Bruce, Actuary "Slavulj" Singing Group Program, Sunday, Hov. 8 LOS ANGELES, Calif. AM members of Croatian Choms "Slavulj" extend a sincere invitation to every one to spend a "Day With Slavulj", Sunday, November 8, at the Polish Auditorium, at Crenshaw and Vernon in Los Angeles, beginning at 4 p.m. Singing, dining and dancing comprise the program, de tails of which will follow in a later issue of the Zajedničar. Other organizations throughout the area are re quested to please refrain from scheduling any affairs on November 8. This coopera tion wiM be greatly appreci ated by the Chorus. We also wish to make an appeal at this time to anyone dem ring to join the chorus to do so by attending our regular rehearsals under the able direction of Professor John Fill, every Friday eve ning, 8:00 p.m., at St Antho ny's Croatian Hall, Grand and Alpine Streets. We need you. Toni Wright, Enter. Chair Junior Order Department Bids Adieu To Another Large Class 10 Uarj, Indiana Daunora, Jeannette Grasha, Mike Jarcik, Edward Krcel, Josephine Strutridge, Haldea Teleky, Sandra Ann Trtan, Stevan 17 Chicago, Illinois Knafl, Carol Opolony, Frank 18 Milwaukee, Wlsconain Demos. Marnae Schlieht, Ronald Stajmiger, Sharon 21 Etna, Penna. Cain, Barbara Lynn Ladesic, Frances Mure tic. Mildred Perkovich, Barbara 27 Versailles, Penna. Bogovic, Joanne 28 So. Omaha, Nebraska Pacholski, Francis Skradski. Annette 82 Uniontown, Penna. Burncheck, Donna 86 Ambridge, Penna. 81 McKeesport, Penna. Vallelunga, James 51 Anaconda, Montana Kaparich, William Thomas, Georgia 55 Cleveland, Ohio Bertosa, Thomas Furlich, Slavko Laurie, Theodore Longar, Sharon 56 Chicago, Illinois Predovic, Madeline 87 Pittsburgh, Penna. 81 West Allis, Wisconsin Dunst, Dale Allen 85 Butte, Montana 86 Cleveland, Ohio Jurkezi, Evangeline 87 Monessen, Penna. 80 Whiting, Indiana McLarty, Dale 94 So. Chicago, Illinois 99 So. Chicago, Illinois Isek, Catherine Westhoff, Dawn 102 So. Chicago, Illinois 105 Conway, Penna. Ecimovic, Eleanor 106 New Brighton, Penna. Trgovac, Frank Woodner, Thomas 113 Aliquippa, Penna. Smith, Paul Turkovich, Elaine 118 Biwabik, Minnesota 121 Chisholm, Minnesota Holland, Judith 129 Wilmerding, Penna. Medved, Nicholas 184 Waiikegan, Illinois Jurkovac, Stephanie 158 Battle Creek, Michigan 169 Lyndora, Penna. Polanec, Dorothy 175 Caspian, Michigan 185 Bethlehem, Penna. Holecz, Shirley Ann 189 Republic, Penna. 190 Farrell, Penna. Kudray, Kathleen Lichak, Thomas 198 Midvale, Utah Gresham, Patricia 194 Titusville, Penna. American And Canadian Lodge Leaders Bid Welcome To Former Nest Affiliates 1 Kansas City, Kansas Brusan, Linda Sue Kolenda. Thomas S Bere ton. Illinois Brukett-a, George 4 Johnstown« Penna. Mikesic, Tanya Denver, Colorado Giedwatoski, Frances 8 Rochester, Penna. Graduates 199 Campbell, Ohio Blazina, Janet Erdel, Edward McGuire, Carol Stancin, Eugene 208 Trafford, Penna. Kirin, Thomas 209 Flint, Michigan Miller, David Stimac, Anthony 220 Seattle, Washington Popovich. Gary 221 Indiana Harbor, Ind. 248 Herminie, Penna. Jelich, Patricia 246 San Jose, California 256 San Pedro, California Kordich, Mary Ann 284 Buhl, Minnesota 808 Livingston, Illinois Spudich, Eugene 304 So. St. Paul, Minn. Chalupa, Martin Ellis, Ronald 310 Lyons, Illinois Chopp, Carol 814 Joliet, Illinois Gaspich, Virginia Maryanovich, Joyce Pavlic, Leonard 817 Chicago, Illinois Kariolich, Lewis 818 Detroit, Michigan 822 Chicago, Illinois Cuculich, Diane Soich, William 841 Joliet, Illinois 849 Shamokin, Penna. Ritzman, Mary Jean 852 Hibbing, Minnesota Matonich, Rochelle 879 Omaha, Nebraska Bosiljevac, Joseph 394 New Kensington, Pa. Pasanac, Jacqueline 418 Centerville, Iowa Lanscak, Margaret Lanscak, Tresa 437 Nemacolin, Penna. 448 St. Louis, Missouri Grbcich, Jacob 461 Oakland, California 516 N. S. Pittsburgh, Penna. Babic, Jo Ann 519 No. Chicago, Illinois 528 Congress Park, IUinstl Grzanic, Charles 528 Des Moines, Iowa 590 Pittsburgh, Penna. Becki, Arlene Jackline, Patricia 604 Cleveland, Ohio Cvitkovic, Judith Stakich, David 274 Wei land, Ont. Yazvac, Joseph Svob, Frank 392 Schumacher, Ont. Sterk, Anna Mary 425 Toronto, Ont. Miroslavich, Rosa 465 Nanaimo, B. C. Padjen, Marija Przada, Josephine Tonzetich, John 480 Vancouver, B. C. Prpich, Pauline Trtan, Rose Maxis Veljacic, David Vukic, Sonia 508 Toronto, Ont. Milinkovich, Mary Some Members Pay Their When Tliey Are Due Some When They Are Overđ— Some Never Do How Do Yon Def CFU's 65th Anniversary Souvenir Book 0 4-Color Front Page, 58 Pages In AH 50 Cents Postpaid Anywhere U.S.A., Canada Mail AH Orders To Croatian Fraternal Union of America 3441 Forbes Avenue Pittsburgh IS, Pa.