Insurance fund and insurance appropriation accounting reason for issue

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May 12, 2008 VBA HANDBOOK 4580

insurance fund and insurance appropriation accounting

1.  REASON FOR ISSUE: This establishes in revised handbook format the Veterans Affairs (VA) procedures for handling accounting, reporting on the VA’s Insurance program, and certain related general ledger fiscal operations. This handbook implements the policies contained in VBA Directive 4580 Insurance Fund and Insurance Appropriation Accounting.
2.  SUMMARY OF CONTENTS/MAJOR CHANGES: This handbook provides the procedures and methodologies to be employed for the accounting and reporting of all collections, disbursements, and other financial operations in the Insurance program.
3.  RESPONSIBLE OFFICE: Accounting Policy and Reporting Division (241B), VBA Finance Staff, Office of Resource Management.

4.  RELATED DIRECTIVE: VBA Directive 4580, Insurance Fund and Insurance Appropriation Accounting.
5.  RESCISSIONS:  VA Manual MP-4, Part V, Chapter 8 and VA Manual MP-4, Part V, Chapter 8, Appendix K.

6. RECERTIFICATION: This handbook will be reviewed for revision or recertification 3 years from issue date, or sooner if so directed by the Director, Finance Services Staff.



Jimmy A. Norris

Director, Office of Resource Management






  1. The purpose of this section is to set forth the accounting procedures for VA's insurance programs. The principles and basic procedures defined by this section will be followed by all finance activities engaged in any phase of insurance activity, including those of VA Central Office (VACO) and the Finance and Insurance Divisions at the Insurance Center.

b. Insurance accounting is accomplished via commercial software package developed by Management Science America (MSA). Subsequent owners have been Dun and Bradstreet Software (DBS), GEAC and Extensity. The accounting system is referred to as MSA/GEAC General Ledger. MSA/GEAC is interfaced with customized accounting programs developed for specific needs of the VA to make up the entire insurance accounting system. Clerical inputs to the system are made by the finance activity at the insurance center located at Philadelphia. Funding activities and investment portfolio management inputs are made by VACO, VBA Office of Resource Management (ORM), Accounting Policy and Reporting Division (101/241B). The vast majority of inputs come from daily summaries of accounting entries interfaced from the In-Force and Awards insurance systems at VA Regional Office and Insurance Center (VARO&IC) Philadelphia, as well as, the Allotment-DFB system. The In-Force system maintains records for insured veterans (premium receipts, dividend disbursements, etc.) whereas the Awards System primarily maintains records for beneficiaries (lump sum payments and/or monthly installments after the death of a veteran). In addition to the MSA/GEAC (Accounting), In-Force, and Awards insurance and Allotment-DFB systems, there is also an Actuarial subsystem. The Actuarial subsystem does not interface with the accounting system. 1 It maintains statistical records for veterans in order to compute insurance reserve levels and other financial considerations needed to properly manage the insurance funds. VA published guidance used in conjunction with this handbook to perform life insurance accounting functions are as follows:

(1) Attachment 1 (formerly VA Manual MP-4, Part V, Chapter 8, Appendix K). 2- Describes all the general ledger (GL) accounts used by the Life Insurance Accounting System.
(2) MSA/GEAC Accounting Users Guide describes codes, screens, edits, controls, etc., for inputs to the MSA/GEAC insurance general ledger accounting system.
(3) MP-6, Part II, Supplement 3.1, Insurance Underwriting and Accounting; General Ledger Accounting--System Description and Run Sequence. This manual addresses master record layouts, reports generated by the system, interfaces from other systems, processing runs, flowcharts, etc.
(4) MP-6, Part II, Supplement 3.2, Insurance Underwriting and Accounting; General Ledger Accounting--Input. This manual describes the transaction types (with related source documents) that are input into the system, instructions for coding inputs, valid general ledger accounts for the system and/or office, edits for the transaction types, valid funds for each office.
NOTE: The above cited manuals are used in conjunction with insurance accounting and/or accounting systems. There are numerous manuals not cited above that address the management of the VA's life insurance programs.
c. Major functions of the Finance Divisions are detailed in this handbook as follows:
(1) Section E - Documentation -- This section describes the source documents and/or transaction types used by finance personnel to record accounting activity.
(2) Section F - Subsidiary Accounts and Control Records -- This section describes the control and/or subsidiary accounts that must be reconciled monthly by finance personnel.
(3) Sections G, H, I and J -- These sections provide instructions to perform daily and monthly reconciliations required in Section F.
d. VA’s active insurance programs are as follows:

Fund Symbol Title

36X8132 National Service Life Insurance Fund (V Fund)

36X8455 Veterans’ Special Life Insurance Fund (RS and W Fund)

36X4012 Service-Disabled Veterans Insurance Fund (RH Fund)

36X0120 Veterans Insurance and Indemnities (H Fund)

36X8150 U.S. Government Life Insurance Fund (K Fund)

36X4010 Veterans Reopened Insurance Fund (J, JR, and JS Funds)

36X4009 Servicemembers Group Life Insurance Fund (SGLI)

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