December 1999

STATE LIFE INSURANCE FUND

The State Life Insurance Fund, which was created in 1911 to provide low-cost life insurance policies to Wisconsin residents, is administered by the Office of the Commissioner of Insurance. The Fund is subject to the same regulatory requirements as any insurance company licensed to operate in Wisconsin, as well as to other specific statutory restrictions, such as a prohibition on advertising and maximum coverage to any insured person of $10,000. As of December 31, 1998, the Fund had 31,033 life policies in effect, and total life insurance in force of approximately $226 million.

We have completed an audit of the regulatory-based financial statements of the State Life Insurance Fund for the period January 1, 1996 through December 31, 1998, as required by s. 13.94(1)(de), Wis. Stats. We found the regulatory-based financial statements to be fairly presented in accordance with insurance accounting practices prescribed by the Commissioner of Insurance.

Statutes require that any fund surplus that accumulates be maintained at a level between 7 and 10 percent of fund assets, so far as is practically possible. The Fund’s surplus-to-asset ratio was 10.1 percent as of December 31, 1998, which slightly exceeds the statutory range.