Systems and methods for administering index-linked financial products

#This application relates to systems and methods for calculating performance, hedging liabilities, and displaying values for financial products.

#The present invention relates to computer systems and methods, and particularly to computer systems for use in the financial services field, and more particularly for processing of data related to fixed indexed annuities, variable indexed annuities, structured notes, market linked certificates of deposit, indexed universal life insurance products, structured payout mutual funds, and structured payout exchange traded funds.

#Fixed annuities are contracts between an annuity owner and an issuing insurance company. In such annuities, an account is established with an initial account value or deposit, typically based on a premium paid by the annuity owner. On a periodic basis, amounts are credited to the account. In some fixed annuities, the amount credited is an interest rate on the account balance. In fixed index annuities, the amount credited, rather than being based on an interest rate determined by the insurance company or specified in the annuity contract, is based on an increase in a value of an index over a given time period.

#The invention is disclosed with reference to the accompanying drawings, wherein:

#FIG. 1 is a schematic illustration of a computer system for processing data related to fixed annuities;

#FIG. 2 is a process flow diagram of data processing steps performed by a computer system in an embodiment of a system of the invention;

#Corresponding reference characters indicate corresponding parts throughout the several views. The examples set out herein illustrate several embodiments of the invention but should not be construed as limiting the scope of the invention in any manner.

#It is to be understood that the figures and descriptions of the present invention have been simplified to illustrate elements that are relevant for a clear understanding of the present invention, while eliminating, for the purpose of clarity, many other elements found in typical computer systems and methods for processing of data relating to annuities, including fixed annuities. Those of ordinary skill in the art may recognize that other elements and/or steps are desirable and/or required in implementing the present invention. However, because such elements and steps are well known in the art, and because they do not facilitate a better understanding of the present invention, a discussion of such elements and steps is not provided herein.

#In one embodiment, a system for processing data related to a fixed index annuity is configured to determine an amount for crediting to an account responsive to data. The system relates to processing data for a fixed index annuity contract between an insurance company and a contract owner. The system may be configured to provide for crediting the account only if the percentage change in an index is greater than a set threshold. By limiting crediting to those periods when the increase exceeds a threshold value, the insurance company avoids a need to pay interest based on typical levels of inflation, such as inflation levels of around 3% per year, while the investor is protected against higher than average inflation rates. The threshold value may be between 2% and 6%, for example. The threshold value may be set by the insurance company on a periodic basis, such as for each crediting period for each annuity, or may be fixed for an annuity term. The threshold value may be selected based on factors including a cost of options, or other derivatives purchased by the insurance company, which derivatives provide for payment by a counterparty to the insurance company based on price indexes, the payments increasing generally with greater price index increases. The threshold value may also be selected by the insurance company in its discretion upon selection by an annuity owner of the price index based crediting method for the next upcoming crediting period. In one example, the threshold may be in the range from 2% to 6%. The annuity contract may set a minimum base rate, and systems for implementing the invention may be configured to prevent a user from manually adjusting a base rate below a minimum base rate stored in a database and associated with the annuity contract.