System and method for administering variable annuities

• US 8,805,705 B2
• Filed: 05/20/2008
• Issued: 08/12/2014
• Est. Priority Date: 05/20/2008
• Status: Active Grant

• Current Assignee: Hartford Fire Insurance Company (The Hartford Financial Services Group, Inc.)
• Original Assignee: Hartford Fire Insurance Company (The Hartford Financial Services Group, Inc.)
• Inventors: Michalowski, Philip W., Golembiewski, Keith E., Weiss, Joseph M.
• Primary Examiner(s): Ebersman, Bruce I
• Application Number:
  US12/123,636
• Publication Number:
  US 20090292563A1
• Time in Patent Office: 2,275 Days
• US Class Current: 705/4
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/08 Insurance

Abstract

A system for administering a variable annuity account includes a processor and a memory in communication with the processor. The processor is adapted to: access from a memory storage device data indicative of actual performance over a time period of a fund within the variable annuity account; access from a memory storage device data indicative of benchmark performance of the fund; compare the actual performance data to the benchmark performance data, and store the result of the comparison in the memory; based on the results of the step of comparing, determine whether to refund to the account an amount; if the amount is to be refunded, access data indicative of the refund amount; access data indicative of the asset value of the account; determine an updated asset value based on the asset value and the amount to be refunded; store the determined updated asset value in a memory storage location; and provide an output signal including data indicative of the change in the asset value of the account.

Claims

1. A system for administering a variable annuity account having an asset value, the variable annuity account issued by an insurance company to an owner, and including investment options for selection by the owner, the investment options including funds managed by investment advisers, comprising:

a computer processor;

a memory in communication with the computer processor;

the computer processor being configured to;

access from a memory storage device data indicative of a change in value over a time period of a fund within the variable annuity account, the chance in value being based on investment performance reduced by expenses, the expenses including fund management fees and insurance charges, the insurance charges including mortality and expenses charges and administration charges;

periodically determine an amount of a management fee to be deducted from the asset value of the variable annuity account and paid to an investment adviser managing the at least one fund;

access from a memory storage device data indicative of benchmark performance, the benchmark performance being a fixed non-zero change in value of the fund after expenses, the expenses comprising fund management fees and insurance charges, the insurance charges including mortality and expenses charges and administration charges;

compare the data indicative of the change in value over the time period to the benchmark performance data, and store the result of the comparison in the memory;

based on the result of the comparison, determine whether to refund, by the insurance company, to the account an amount, wherein an amount is to be refunded responsive to determining that the change in value over the time period is less than the fixed non-zero change in value of the fund after expenses;

if the amount is to be refunded, access data indicative of the refund amount;

access data indicative of the asset value of the account;

determine an updated asset value based on adding to the asset value the amount to be refunded;

store the determined updated asset value in a memory storage location;

and provide output data indicative of the amount added to the asset value of the account.

2. The system of claim 1, wherein the processor is further configured to provide output data indicative of instructions for payment of the management fee to the investment adviser.

3. The system of claim 1, wherein the processor is further configured to receive data indicative of an instruction to provide a payment from the account, to calculate a payment amount based on the asset value of the account, and to provide output data indicative of the payment amount.

4. The system of claim 3, further comprising:

a payment determination system having a processor for;

receiving the data indicative of the payment amount, determining of a payor account and a payment method;

storing of the determined payor account information and the determined payment method in a memory of the payment determination system;

outputting of data indicative of the stored payor account information, the stored payment method, amount information and payee information; and

a payment fulfillment system for receiving the data indicative of the stored payor account information, the stored payment method, amount information and payee information from the payment determination system and for fulfillment of payment in accordance with the data received from the processor of the payment determination system.

5. The system of claim 4, wherein the payment fulfillment system is a check printing and mailing system for printing and mailing a check drawn on the payor account in an amount and to a payee as determined by the data received from the processor of the payment determination system.

6. The system of claim 4, wherein the payment fulfillment system is a system for generating electronic funds transfer requests for providing of an instruction to a bank determined by the payor account information to provide an electronic funds transfer from the payor account to a payee account in an amount determined by the data received from the processor of the payment determination system.

7. The system of claim 1, wherein the output data further comprises data indicative of instructions for printing of a statement including the refund amount.

8. The system of claim 1, wherein the refund amount is equal to a management fee for the fund for the time period.

9. The system of claim 8, wherein the management fee includes a 12b-1 fee.

10. The system of claim 1, wherein the refund amount is a fixed dollar amount.

11. A computer-implemented method for administering a variable annuity account having a asset value, the variable annuity issued by an insurance company to an owner, and including investment options for selection by the owner, the investment options including funds managed by investment advisers, comprising the steps of:

accessing by a computer processor from a memory storage device data indicative of a change in value over a time period of at least one fund within the variable annuity account, the change in value being based on investment performance reduced by expenses, the expenses including fund management fees and insurance charges, the insurance charges including mortality and expenses charges and administration charges;

periodically determining by the computer processor an amount of a management fee to be deducted from the asset value of the variable annuity account and paid to an investment adviser managing the fund;

accessing by the computer processor from a memory storage device data indicative of benchmark performance of the fund, the benchmark performance being a fixed non-zero change in value of the fund after expenses, the expenses comprising mortality and expense charges, administration charges and fund management fees;

comparing by the computer processor the data indicative of the change in value over the time period data to the benchmark data, and storing the result of the comparison in the memory;

based on the result of the comparison, determining by the processor whether to refund, by the insurance company, an amount to the account, wherein an amount is to be refunded responsive to determining that the change in value over the time period is less than the fixed non-zero change in value of the fund after expenses;

if the amount is to be refunded, accessing by the processor data indicative of the value of the amount to be refunded;

accessing by the processor data indicative of the asset value of the account;

determining by the processor an updated asset value based on the asset value and the amount to be refunded;

storing by the processor the determined updated asset value in a memory storage location;

and providing by the processor output data indicative of the change in value to the asset value of the account.

12. The method of claim 11, further comprising providing output data indicative of instructions for payment of the management fee to an investment adviser.

13. The method of claim 11, further comprising receiving data indicative of an instruction to provide a payment from the account;

calculating, in response to receipt of the data indicative of an instruction to provide a payment from the account, a payment amount based on the asset value of the account; and

providing output data indicative of the payment amount.

14. The method of claim 13, further comprising:

in response to receipt of the output data indicative of the payment amount at a payment determination system, determining of a payor account and a payment method;

storing of the determined payor account information and the determined payment method in a memory of the payment determination system;

outputting by the payment determination system of data indicative of the stored payor account information, the stored payment method, amount information and payee information; and

in response to receipt of the data output by the payment determination system, fulfillment by a payment fulfillment system of payment in accordance with the data received from the payment determination system.

15. The method of claim 14, wherein the step of fulfillment comprises printing and mailing a check drawn on the payor account in an amount and to a payee as determined by the data output by the payment determination system.

16. The method of claim 14, wherein the step of fulfillment comprises generating electronic funds transfer requests for providing of an instruction to a bank determined by the payor account information to provide an electronic funds transfer from the payor account to a payee account in an amount determined by the data output by the payment determination system.

17. The method of claim 11, further comprising providing output data indicative of instructions for printing of a statement including the amount of the refund.

18. The method of claim 11, wherein the refund amount is equal to a management fee for the fund for the time period.

19. The method of claim 18, wherein the management fee includes a 12b-1 fee.

20. The method of claim 11, wherein the refund amount is a predetermined dollar amount.

21. A non-transitory computer-readable medium having a plurality of instructions thereon which, when executed by a processor, cause the processor to perform the steps of:

accessing from a memory storage device data indicative of change in value, based on based on investment performance reduced by expenses, the expenses including fund management fees and insurance charges, the insurance charges including mortality and expenses charges and administration charges over a time period of a fund within a variable annuity account having an asset value, the variable annuity issued by an insurance company to an owner, and including investment options for selection by the owner, the investment options including funds managed by investment advisers;

accessing from a memory storage device data indicative of benchmark performance of the fund, the benchmark performance being a fixed non-zero change in value of the fund after expenses, the expenses comprising mortality and expense charges, administration charges and fund management fees;

periodically determining an amount of a management fee to be deducted from the asset value of the variable annuity account and paid to an investment adviser managing the fund;

comparing the data indicative of the change in value over the time period to the benchmark data, and storing the result of the comparison in the memory;

based on the result of the comparison, determining whether to refund, by the insurance company, an amount to the account, wherein an amount is to be refunded responsive to determining that the actual performance is less than the fixed change in value of the fund after expenses;

if the amount is to be refunded, accessing data indicative of the value of the amount to be refunded;

accessing data indicative of the asset value of the account;

determining an updated asset value based on the asset value and the amount to be refunded;

storing the determined updated asset value in a memory storage location;

and providing output data indicative of the change in value to the asset value of the account.

22. The computer-readable medium of claim 21, wherein the output data is provided to a printer driver to cause a printer to print the determined updated asset value.

23. The computer-readable medium of claim 21, wherein the output data is provided to a video driver to cause a display to display the determined updated asset value.