Variable Annuity Product Management Method and System

• US 20110295765A1
• Filed: 05/25/2011
• Published: 12/01/2011
• Est. Priority Date: 05/25/2010
• Status: Abandoned Application

• Current Assignee: MID Atlantic Capital Group, Western & Southern Financial Group Incorporated (Western & Southern Mutual Holding Company)
• Original Assignee: MID Atlantic Capital Group, Western & Southern Financial Group Incorporated (Western & Southern Mutual Holding Company)
• Inventors: Howard, Kevin L., Schneider, Paul D., Edblom, Scott W.
• Application Number:
  US13/115,613
• Publication Number:
  US 20110295765A1
• Time in Patent Office: Days
• US Class Current: 705/36.R
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A computer-implemented method for providing and managing a variable annuity product capable of investing in exchange-traded funds, including: receiving, on a server computer, a request to allocate an amount of annuity assets comprising tax-deferred or tax-advantaged assets into at least one subaccount corresponding to a specified exchange-traded fund; allocating the amount of annuity funds into at least one subaccount; and initiating the purchase of at least one share of an exchange-traded fund relating to at least a portion of at least one unit of the at least one subaccount. A system and a computer program product for implementing the aforementioned method includes appropriately communicatively connected hardware components. Also disclosed is a computer-implemented method for reducing risk in a variable annuity product as well as a system and a computer program product for implementing the method which includes appropriately communicatively connected hardware components.

Claims

1. A computer-implemented method for providing and managing variable annuity funds, comprising:

a. receiving, on a server computer, a request to allocate an amount of annuity assets comprising tax-deferred or tax-advantaged assets into at least one subaccount corresponding to a specified exchange-traded fund;

b. allocating the amount of annuity assets into at least one subaccount; and

c. initiating the purchase of at least one share of an exchange-traded fund relating to at least a portion of at least one unit of the at least one subaccount.

2. The method of claim 1, wherein monetary distributions received from an exchange-traded fund are reinvested in at least one exchange-traded fund.

3. The method of claim 1, wherein the annuity assets comprise at least one of the following:

assets in at least one individual retirement account, payments from at least one individual retirement account, assets in at least one 401(k) account, assets in at least one 403(b) account, assets in at least one 457 account, assets in at least one individual retirement account formed under the Employee Retirement Income Security Act, assets from at least one retirement account annuity contract, consolidated tax-deferred or tax-advantaged assets, or any combination thereof.

4. The method of claim 1, further comprising:

a. receiving a guarantee from a contract owner to pay an annual payment fee; and

b. issuing a guarantee to pay the contract owner for the life of the annuitant in exchange for said annual payment fee.

5. The method of claim 1, further comprising:

a. determining expected performance data of the at least one exchange-traded fund;

b. identifying at least one index-based investment option having expected performance data substantially similar to said expected performance data of the at least one exchange-traded fund; and

c. initiating the purchase of said at least one index-based investment option.

6. The method of claim 5, wherein the at least one index-based investment option is at least one of the following:

short indexed futures positions, put options on a basket of equity indexes, stock index futures, derivatives, derivative securities, or any combination thereof.

7. The method of claim 1, further comprising:

a. receiving a request to withdraw an amount of assets from a subaccount; and

b. initiating the sale of at least one share of the exchange-traded fund relating to at least a portion of at least one unit of the subaccount, wherein the at least one share of the exchange-traded fund relates to the amount of assets.

8. The method of claim 1, wherein annuity funds are allocated to a plurality of subaccounts, the method further comprising:

a. determining a purchaser'"'"'s original asset allocation to each of the plurality of subaccounts; and

b. reallocating a purchaser'"'"'s current assets in the plurality of subaccounts among the plurality of subaccounts, so that the current assets allocated among the plurality of subaccounts are allocated substantially proportional to the purchaser'"'"'s original asset allocation to each of the plurality of subaccounts.

9. The method of claim 1, further comprising:

a. transmitting data configured to generate a display showing at least one of the following;

account value, subaccount value, subaccount allocation, account history, or any combination thereof.

10. The method of claim 1, further comprising:

a. providing a graphical user interface designed to facilitate the allocation of assets to at least one subaccount.

11. The method of claim 1, further comprising:

a. determining a fee for at least one broker-dealer;

b. receiving a commitment from at least one broker-dealer to trade exchange-traded fund shares at the closing price of each primary exchange associated with each exchange-traded fund.

12. A computer program product comprising a computer usable medium having control logic stored therein for causing a computer to manage variable annuity funds, the control logic comprising:

a. first computer readable program code means for causing the computer to receive a request to allocate an amount of annuity assets comprising tax-deferred or tax-advantaged assets into at least one subaccount corresponding to a specified exchange-traded fund;

b. second computer readable program code means for causing the computer to allocate the amount of annuity assets into at least one subaccount; and

c. third computer readable program code means for causing the computer to initiate the purchase of at least one share of an exchange-traded fund relating to at least a portion of at least one unit of the at least one subaccount.

13. The computer program product of claim 12, further comprising:

a. fourth computer readable program code means for causing the computer to determine expected performance data of the at least one exchange-traded fund;

b. fifth computer readable program code means for causing the computer to identify at least one index-based investment option having an expected performance substantially similar to said expected performance of the at least one exchange-traded fund; and

c. sixth computer readable program code means for causing the computer to initiate the purchase of said at least one index-based investment option.

14. The computer program product of claim 12, further comprising:

a. fourth computer readable program code means for causing the computer to receive a request to withdraw an amount of assets from a subaccount; and

b. fifth computer readable program code means for causing the computer to initiate the sale of at least one share of the exchange-traded fund relating to at least a portion of at least one unit of the subaccount, wherein the at least one share of the exchange-traded fund relates to the amount of assets.

15. A variable annuity fund creation and management system, comprising:

a. at least one computer having a computer readable medium with program instructions stored thereon, which, when executed by a processor of the computer, cause the processor to;

i. receive a request to allocate an amount of annuity assets comprising tax-deferred or tax-advantaged assets into at least one subaccount corresponding to a specified exchange-traded fund;

ii. allocate the amount of annuity assets into the at least one subaccount; and

iii. initiate the purchase of at least one share of an exchange-traded fund relating to at least a portion of at least one unit of the at least one subaccount.

16. The system of claim 15, further comprising program instructions which, when executed by a processor of the computer, cause the processor to:

a. determine expected performance data of the at least one exchange-traded fund;

b. identify at least one index-based investment option having an expected performance substantially similar to said expected performance of the at least one exchange-traded fund; and

c. initiating the purchase of said at least one index-based investment option.

17. The system of claim 15, wherein the annuity assets are comprised of at least one of the following:

assets in at least one individual retirement account, payments from at least one individual retirement account, assets in at least one 401(k) account, assets in at least one 403(b) account, assets in at least one 457 account, assets in at least one retirement account formed under the Employee Retirement Income Security Act, assets from at least one individual retirement account annuity contract, consolidated tax-deferred or tax-advantaged assets, or any combination thereof.

18. A computer-implemented method for reducing risk in a variable annuity product, comprising:

a. receiving, on a server computer, a request to invest assets in an index-based exchange-traded fund;

b. determining expected performance data of said index-based exchange-traded fund;

c. identifying at least one index-based investment option having an expected performance substantially similar to said expected performance of said index-based exchange-traded fund; and

d. communicating the identified at least one index-based investment option.

19. The method of claim 18, wherein the assets are comprised of at least one of the following:

assets in at least one individual retirement account, payments from at least one individual retirement account, assets in at least one 401(k) account, assets in at least one 403(b) account, assets in at least one 457 account, assets in at least one retirement account formed under the Employee Retirement Income Security Act, assets from at least one individual retirement account annuity contract, consolidated tax-deferred or tax-advantaged assets, or any combination thereof.

20. The method of claim 18, further comprising:

a. receiving a guarantee from a contract owner to pay an annual payment fee; and

b. issuing a guarantee to pay the contract owner for the life of the annuitant in exchange for said annual payment fee.

21. The method of claim 18, further comprising:

a. transmitting data configured to generate a display showing at least one of the following;

account value, subaccount value, subaccount allocation, account history, or any combination thereof.

22. The method of claim 18, further comprising:

a. providing a graphical user interface designed to allow users to allocate assets among subaccounts.

23. A computer program product comprising a computer usable medium having control logic stored therein for causing a computer to reduce risk in a variable annuity product, the control logic comprising:

a. first computer readable program code means for causing the computer to receive a request to invest assets in an index-based exchange-traded fund;

b. second computer readable program code means for causing the computer to determine expected performance data of said index-based exchange-traded fund;

c. third computer readable program code means for causing the computer to identify at least one index-based investment option having expected performance data substantially similar to said expected performance data of said index-based exchange-traded fund; and

d. fourth computer readable program code means for causing the computer to communicate the identified at least one index-based investment option.

24. A variable annuity fund risk-reduction system, comprising:

a. at least one computer having a computer readable medium with program instructions stored thereon, which, when executed by a processor of the computer, cause the processor to;

i. receive a request to invest assets in an index-based exchange-traded fund;

ii. determine expected performance data of said index-based exchange-traded fund;

iii. identify at least one index-based investment option having expected performance data substantially similar to said expected performance data of said index-based exchange-traded fund; and

iv. communicate the identified at least one index-based investment option.