EQUITY-INDEXED ANNUITY FOR GROUP SAVINGS PROGRAMS

• US 20140122131A1
• Filed: 02/11/2013
• Published: 05/01/2014
• Est. Priority Date: 08/16/2005
• Status: Abandoned Application

• Current Assignee: ELM Income Group Incorporated
• Original Assignee: Christopher O'Flinn
• Inventors: O'Flinn, Christopher, Schirripa, Felix
• Application Number:
  US13/764,392
• Publication Number:
  US 20140122131A1
• Time in Patent Office: Days
• US Class Current: 705/4
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• 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
• CPC Class Codes: G06Q 40/08 Insurance
• CPC Class Codes: G06Q 40/10 Tax strategies

Abstract

A Group Equity-Indexed Annuity (GEIA) with a guaranteed minimum equity related return for a set of individuals are provided. An algorithm sets a “participation rate” of a GEIA contract as well as the carrier margin, risk and opportunity for recovery. The carrier is held accountable to the participation rate produced by the model investment portfolio in the formula and subject to the guaranteed minimum. The selection of the participation rate is entirely visible to a GEIA contract-holder. A “hedge budget” is based on a formula-driven amortization process that blends old and new money. Underlying assets are also managed to a “constant” duration, such as the duration of a bond index selected by the GEIA contract-holder.

Claims

1. A method, implemented on a computer, for implementing a Group Equity-Indexed Annuity (GEIA) with a guaranteed minimum equity related return for a plurality of participants, the method comprising:

obtaining a first set of calls on equity index using a first portion of a first contribution provided by a plurality of participants;

obtaining a first set of securities using a second portion of the first contribution;

determining that a first specified period of time has elapsed;

calculating, employing a computer processor of the computer, a first participation rate based on a model investment portfolio;

determining if the first calculated participation rate exceeds a minimum participation rate; and

if so, crediting interest to the first contribution in an amount at least equal to the first calculated participation rate multiplied by an increase in the equity index for the first specified period,

otherwise, crediting interest to the first contribution in an amount equal to the minimum participation rate multiplied by the increase in the equity index for the first specified period.

2. The method of claim 1, further comprising obtaining a second set of calls on equity index using the first portion of the first contribution and a second portion of a second contribution provided by a second plurality of participants.

3. The method of claim 2, further comprising obtaining a seeond set of securities using a second portion of the second contribution.

4. The method of claim 3, further comprising

determining that a second specified period of time has elapsed;

calculating, employing the computer processor of the computer, a second participation rate based on the model investment portfolio;

determining if the second calculated participation rate exceeds a minimum participation rate; and

if so, crediting, interest to the first contribution and the second contribution combined in an amount at least equal to the second calculated participation rate multiplied by an increase in the equity index for the second specified period,

otherwise, crediting interest to the first contribution and the second contribution combined in an amount equal to the minimum participation rate multiplied by an increase in the equity index for the second specified period.

5. The method of claim 1, further comprising depositing the first set of funds in an account insulated from other funds.

6. The method of claim 1, wherein the first portion of the funds is equivalent to an expected interest on the set of securities.

7. The method of claim 1, wherein the type of the set of securities is one of:

a note and a bond.

8. The method of claim 1, wherein calculating the participation rate further comprises implementing a mathematical algorithm to calculate the participation rate.

9. The method of claim 1, further comprising electronically receiving the set of funds from the set of participants.

10. The method of claim 9, wherein the set of participants are employees of an organization sponsoring an employee savings plan.

11. A computer-based system for implementing an Equity-Indexed Annuity (EIA) with a guaranteed minimum equity related return for a set of individuals, the computer-based system comprising:

a processor operable to execute computer program instructions; and

a memory operable to store computer program instructions executable by the processor, for performing the steps of;

obtaining a first set of calls on equity index using a first portion of a first contribution provided by a plurality of participants;

obtaining a first set of securities using a second portion of the first contribution;

determining that a first specified period of time has elapsed;

calculating, employing a computer processor of the computer, a first participation rate based on a model investment portfolio;

determining if the first calculated participation rate exceeds a minimum participation rate; and

if so, crediting interest to the first contribution in an amount at least equal to the first calculated participation rate multiplied by an increase in the equity index for the first specified period,

otherwise, crediting interest to the first contribution in an amount equal to the minimum participation rate multiplied by the increase in the equity index for the first specified period.

12. The system of claim 11, further comprising obtaining a second set of calls on equity index using the first portion of the first contribution, and a second portion of a second contribution provided by a second plurality of participants.

13. The system of claim 12, further comprising obtaining a second set of securities using a second portion of the second contribution.

14. The system of claim 13, further comprising

determining that a second specified period of time has elapsed;

calculating, employing the computer processor of the computer, a second participation rate based on the model investment portfolio;

determining if the second calculated participation rate exceeds a minimum participation rate; and

if so, crediting interest to the first contribution and the second contribution combined in an amount at least equal to the second calculated participation rate multiplied by an increase in the equity index for the second specified period,

otherwise, crediting interest to the first contribution and the second contribution combined in an amount equal to the minimum participation rate multiplied by an increase in the equity index for the second specified period.

15. The system of claim 11, further comprising the memory operable to store computer program instructions executable by the processor, for performing the step of depositing the set of funds in an account insulated from other funds.

16. The system of claim 11, wherein the first portion of the funds is equivalent to an expected interest on the set of securities.

17. The system of claim 11, wherein the type of the set of securities is one of:

a note and a bond.

18. The system of claim 11, wherein calculating the participation rate further comprises computer program instructions for implementing a mathematical algorithm to calculate the participation rate.

19. The system of claim 11, further comprising the memory operable to store computer program instructions executable by the processor, for performing the step of receiving the set of funds from the set of participants.

20. The system of claim 19, wherein the set of participants are employees of an organization sponsoring an employee savings plan.

21. A computer program product for implementing an Equity-Indexed Annuity (EIA) with a guaranteed minimum equity related return for a set of individuals, the computer-based system comprising:

a computer readable medium;

computer program instructions, recorded on the computer readable medium, executable by a processor, for performing the steps of

obtaining a first set of calls on equity index using a first portion of funds from a first set of funds provided by a set of participants;

obtaining a first set of securities using a second portion of funds from the first set of funds;

determining that a first specified period of time has elapsed;

calculating, employing a computer processor of the computer, a first participation rate based on a model investment portfolio;

determining if the first calculated participation rate exceeds a minimum participation rate; and

if so, crediting interest to the first set of funds in an amount at least equal to the first calculated participation rate multiplied by an increase in the equity index for the first specified period,

otherwise, crediting interest to the first set of funds in an amount equal to the minimum participation rate multiplied by the increase in the equity index for the first specified period.

22. The computer program product of claim 21, further comprising obtaining a second set of calls on equity index using the first portion of funds from the first set of funds and a second portion of funds from a second set of funds provided by a set of participants.

23. The computer program product of claim 22, further comprising obtaining a second set of securities using a second portion of funds from the second set of funds.

24. The computer program product of claim 23, further comprising

determining that a second specified period of time has elapsed;

calculating, employing the computer processor of the computer, a second participation rate based on the model investment portfolio;

determining if the second calculated participation rate exceeds a minimum participation rate; and

if so, crediting interest to the first set of funds and the second set of funds combined in an amount at least equal to the second calculated participation rate multiplied by an increase in the equity index for the second specified period,

otherwise, crediting interest to the first set of funds and the second set of funds combined in an amount equal to the minimum participation rate multiplied by an increase in the equity index for the second specified period.

25. The computer program product of claim 21, further comprising the memory operable to store computer program instructions executable by the processor, for performing the step of depositing the set of funds in an account insulated from other funds.

26. The computer program product of claim 21, wherein the first portion of the funds is equivalent to an expected interest on the set of securities.

27. The computer program product of claim 21, wherein the type of the set of securities is one of:

a note and a bond.

28. The computer program product of claim 21, wherein calculating the participation rate further comprises computer program instructions for implementing a mathematical algorithm to calculate the participation rate.

29. The system of claim 21, further comprising the memory operable to store computer program instructions executable by the processor, for performing the step of receiving the set of funds from the set of participants.

30. The computer program product of claim 29, wherein the set of participants are employees of an organization sponsoring an employee savings plan.

31. A method of developing a participant GEIA account value for a participant of a GEIA contract comprising:

determining whether the participant is a new participant;

if so, depositing an initial contribution of funds into the GEIA account of GEIA contact corresponding to the date of the initial contribution;

otherwise, determining whether an anniversary date of the GEIA account has arrived;

if so, obtaining a withdrawal request from the participant, if any, allocating additional contribution from the participant, identifying change in a standard equity index during the preceding anniversary year, bonus interest, calculate index interest factor and the participant'"'"'s account value for the GEIA account,

otherwise, determining if a withdrawal request has been made.