THE UKRAINIAN NATIONAL ASSOCIATION FORUM (04/04/99)

THE UKRAINIAN NATIONAL ASSOCIATION FORUM

Message from the president: about UNA investments

by Ulana Diachuk
UNA President

Each year UNA executive officers take part in district committee meetings, once in the spring and again in the fall. On many occasions they are asked by the branch officers and members to explain where UNA assets are invested and how safe these investments are. Such questions were even more numerous in the fall of 1998, at the time when the stock market had suffered a considerable downturn.

It is important to understand that selling life insurance is a conservative undertaking. Once an insurance policy is issued, the insurance company must plan ahead to pay the face amount of the policy upon the death of the insured, or upon maturity of an endowment policy. Therefore, the investments of an insurance company must be conservative in order to meet all future contractual obligations.

All insurance companies, as well as fraternal associations such as the UNA, are highly regulated by the insurance departments of each state where they hold licenses to sell insurance. They must comply with all limitations as to the type of investments permitted by state statutes and the amount of each individual investment.

The UNA Investment Committee policy states: "...the investment objective is: application of prudent-men principal ['investing in a special relation of trust, responsibility, confidence or obligation to the society and having the best interest of the society at heart'] to preserve capital, generate income and provide incremental value to the UNA portfolio. It is a risk-averse policy reflecting the nature of the UNA's business, and statutory guidelines and limitations."

The UNA's assets are invested in the following instruments: bonds, mortgages, equities (stocks), real estate and loans on the policies of its members.

As of December 31, 1998, UNA ledger assets showed a balance of $69,181,611.

Investments in bonds, amounting to $47,189,084, consist of U.S. government bonds or its agencies (18.54 percent), Dominion of Canada and provincial bonds (30.44 percent), and U.S. utilities and corporate bonds (51.02 percent). All bonds are of high investment grade, and all investments in bonds pay interest.

First mortgages on residential properties of our members show a balance of $6,878,418. Another $2.3 million is loaned as a first mortgage to the Ukrainian National Urban Renewal Corp., a wholly owned subsidiary of the UNA, on the UNA headquarters building.

In equities the UNA has invested the sum of $6,456,933. The stock portfolio consists of mutual funds (6.05 percent) preferred stocks (1.89 percent) and common stocks (1.4 percent). The percentages are based on all UNA ledger assets.

The UNA's only other investment in real estate is the Soyuzivka resort, which the Insurance Department of New Jersey considers a non-admitted asset. The book value of the resort is $2,916,020.

The UNA also loaned to members the sum of $815,242 on the cash value of their certificates; this, too, is part of our assets.

This report should assure our UNA members that their insurance policies, as well as annuities, are well-protected by the current asset mix of our association.

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