1953 $192,177 1955 $ 286,138
1952 198,564 1956 297,491
1953 196,887 1957 308,248
1954 203,441 1958 311,280
Adu Or Junior
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
-J ,'y »4,
$ 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
1956 599.415 590.039
1957 591,431 596.391
1958 588,574 573,347
Kapetan ovi c, Victoria
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
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.
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
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.
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:
Twenty Year Endowment
(New or Increased Business)
Croatian Fraternal Union's 65th Anniversary Campaign Prize Awards
Adult Or Junior
(New or Increased Business)
Ihcome Defender Benefits .. $5.00
Junior CSO Term Insurance
Sick Benefit Protection 1.
Disability Benefit Protection 1.0*
Old To New Disability Transfer 1.0$
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
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
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
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
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
Endowment Age 66
Endowment Age 86
(Mew or Increased Business)
Ane 18 Endowment
(New or Increased Pnsiness)
Amount Caah fclit
Family Plan, $5,000 Unit $30 00
Family Piaa, $10,000 Unit 60.00
Single Premium, Per $1,000 20.00
Choiee Trip To Yugoslavia Or Caribbean Cruise
are so great that a profit eaa never be realised ea a $500
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:
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.
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
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
The following recommendations ara made by the ac
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.
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
Singing, dining and dancing
comprise the program, de
tails of which will follow in a
later issue of the Zajedničar.
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
Toni Wright, Enter. Chair
Junior Order Department Bids Adieu
Another Large Class
10 Uarj, Indiana
Teleky, Sandra Ann
17 Chicago, Illinois
18 Milwaukee, Wlsconain
21 Etna, Penna.
Cain, Barbara Lynn
Mure tic. Mildred
27 Versailles, Penna.
28 So. Omaha, Nebraska
82 Uniontown, Penna.
86 Ambridge, Penna.
81 McKeesport, Penna.
51 Anaconda, Montana
55 Cleveland, Ohio
56 Chicago, Illinois
87 Pittsburgh, Penna.
81 West Allis, Wisconsin
Dunst, Dale Allen
85 Butte, Montana
86 Cleveland, Ohio
87 Monessen, Penna.
80 Whiting, Indiana
94 So. Chicago, Illinois
99 So. Chicago, Illinois
102 So. Chicago, Illinois
105 Conway, Penna.
106 New Brighton, Penna.
113 Aliquippa, Penna.
118 Biwabik, Minnesota
121 Chisholm, Minnesota
129 Wilmerding, Penna.
184 Waiikegan, Illinois
158 Battle Creek, Michigan
169 Lyndora, Penna.
175 Caspian, Michigan
185 Bethlehem, Penna.
Holecz, Shirley Ann
189 Republic, Penna.
190 Farrell, Penna.
198 Midvale, Utah
194 Titusville, Penna.
American And Canadian Lodge Leaders
Bid Welcome To Former Nest Affiliates
1 Kansas City, Kansas
Brusan, Linda Sue
S Bere ton. Illinois
4 Johnstown« Penna.
8 Rochester, Penna.
199 Campbell, Ohio
208 Trafford, Penna.
209 Flint, Michigan
220 Seattle, Washington
221 Indiana Harbor, Ind.
248 Herminie, Penna.
246 San Jose, California
256 San Pedro, California
Kordich, Mary Ann
284 Buhl, Minnesota
808 Livingston, Illinois
304 So. St. Paul, Minn.
310 Lyons, Illinois
814 Joliet, Illinois
817 Chicago, Illinois
818 Detroit, Michigan
822 Chicago, Illinois
841 Joliet, Illinois
849 Shamokin, Penna.
Ritzman, Mary Jean
852 Hibbing, Minnesota
879 Omaha, Nebraska
394 New Kensington, Pa.
418 Centerville, Iowa
437 Nemacolin, Penna.
448 St. Louis, Missouri
461 Oakland, California
516 N. S. Pittsburgh, Penna.
Babic, Jo Ann
519 No. Chicago, Illinois
528 Congress Park, IUinstl
528 Des Moines, Iowa
590 Pittsburgh, Penna.
604 Cleveland, Ohio
274 Wei land, Ont.
392 Schumacher, Ont.
Sterk, Anna Mary
425 Toronto, Ont.
465 Nanaimo, B. C.
480 Vancouver, B. C.
Trtan, Rose Maxis
508 Toronto, Ont.
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
Postpaid Anywhere U.S.A., Canada
Mail AH Orders To
Croatian Fraternal Union of America
3441 Forbes Avenue Pittsburgh IS, Pa.
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