# US 7,613,644 B1 · Annuity having interest rate coupled to a referenced interest rate > Agents: this data is available as JSON from the patentgrep API and MCP server — see https://patentgrep.com/llms.txt - Number: US 7,613,644 B1 - Document ID: US7613644B1 - Status: Granted - Kind: B1 - Application number: 11/847,077 - Filed: 2007-08-29 - Granted: 2009-11-03 - Earliest claimed: 2002-03-28 - Assignees: Allstate Insurance Company - Inventors: Donald Paul Abbs; Graham Donald Ireland - Web page: https://patentgrep.com/patent/US7613644B1 ## CPC - G06Q 40/02: Banking, e.g. interest calculation or account maintenance (credit or loans G06Q40/03) - G06Q 40/00: Finance; Insurance; Tax strategies; Processing of corporate or income taxes - G06Q 40/03: Credit; Loans; Processing thereof - G06Q 40/06: Asset management; Financial planning or analysis - G06Q 40/08: Insurance - G06Q: INFORMATION AND COMMUNICATION TECHNOLOGY [ICT] SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES; SYSTEMS OR METHODS SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES, NOT OTHERWISE PROVIDED FOR ## Abstract An annuity provides a guaranteed rate of return for a guarantee period while at the same time providing upward adjustments to the interest rate if there is a corresponding increase in a specified referenced rate. The guaranteed base interest rate is set at the beginning of the guarantee period, and the annuity account is credited with the base interest rate for an initial pre-defined period. Periodically, the then-current referenced rate is compared to a base referenced rate defined at the establishment of the guarantee period. If the referenced rate has increased, the interest rate that will be credited to the annuity account value will increase by an amount that is based on the amount of increase in the referenced rate. If the referenced rate has not changed or has decreased, the interest rate that will be credited to the annuity account value will be the guaranteed base interest rate. ## Claims ### Claim 1 A computer-implemented method of administering an annuity account comprising: defining at a processor a base interest rate, said base interest rate being applied to the value of the account for an initial predefined period; defining at the processor a base referenced rate of interest as of an initial date; for each subsequent predefined period following the initial predefined period: (A) determining at the processor a current referenced rate of interest as of a second date; (B) defining at the processor a total interest rate that will be applied to the value of the account during the subsequent predefined period, wherein: (i) if the current referenced rate of interest is less than or equal to the base referenced rate of interest, the total interest rate will be equal to the base interest rate; and (ii) if the current referenced rate of interest is greater than the base referenced rate of interest, the total interest rate will be the sum of the base interest rate and an interest enhancement; and applying at the processor the total interest rate for each subsequent predefined period to the value of the account during the predefined period. ### Claim 2 (depends on 1) The computer-implemented method of claim 1 wherein the interest enhancement is determined based on the difference between the current referenced rate of interest and the base referenced rate of interest. ### Claim 3 (depends on 1) The computer-implemented method of claim 1 wherein the interest enhancement is equal to an upside participation factor multiplied by the difference between the current referenced rate of interest and the base referenced rate of interest. ### Claim 4 (depends on 3) The computer-implemented method of claim 3 wherein the participation factor is 1. ### Claim 5 (depends on 1) The computer-implemented method of claim 1 wherein the base referenced rate of interest is the five-year Constant Maturity United States Treasury yield as of the initial date. ### Claim 6 (depends on 5) The computer-implemented method of claim 5 wherein the current referenced rate of interest is the five year Constant Maturity United States Treasury yield as of the second date. ### Claim 7 (depends on 1) The computer-implemented method of claim 1 further comprising providing a guarantee that the interest rate that will be applied to the account will not be less than the base interest rate for a guarantee period of at least approximately 5 years and wherein the predefined period is 1 year. ### Claim 8 (depends on 1) The computer-implemented method of claim 1 wherein the date the current referenced rate of interest is determined is a date on which the referenced rate of interest is highest among referenced rates of interest determined for the predefined periods since the initial predefined period. ### Claim 9 (depends on 1) The computer-implemented method of claim 1 wherein the base referenced rate of interest is a specified United States Treasury rate as of the initial date and wherein the current referenced rate of interest is the specified United States Treasury rate on the second date and wherein the value of the account as of the initial date is no less than approximately $3,000. ### Claim 10 A computer-implemented method for managing an annuity agreement comprising: receiving a purchase payment; and generating at a processor an annuity agreement, comprising: a base interest rate; a guarantee period during which a first interest is provided that will not be less than the base interest rate, the guarantee period having a beginning; an interest enhancement calculated periodically throughout said guarantee period based on changes in a specified United States Treasury rate from a base value of the specified United States Treasury rate defined at the beginning of the guarantee period, wherein: (a) if the specified United States Treasury rate on the date said interest enhancement is calculated is not greater than the base value of the specified United States Treasury rate, said interest enhancement is zero; and (b) if the specified United States Treasury rate on the date said interest enhancement is calculated is greater than the base value of the specified United States Treasury rate, said interest enhancement is calculated by taking the difference between: (1) the specified United States Treasury rate on the date said interest enhancement is calculated and (2) the base value of the specified United States Treasury rate, and multiplying said difference by an upside participation factor, wherein a second interest is provided after the interest enhancement is calculated and wherein the second interest is the sum of said base interest rate and the interest enhancement. ### Claim 11 (depends on 10) The computer-implemented method of claim 10 further comprising the step of providing income payments. ### Claim 12 (depends on 10) The computer-implemented method of claim 10 further comprising the step of investing the purchase payment. ### Claim 13 (depends on 10) The computer-implemented method of claim 10 wherein the purchase payment is at least approximately $3,000. ### Claim 14 (depends on 11) The computer-implemented method of claim 11 further comprising the step of investing the purchase payment and wherein the purchase payment is at least approximately $5,000 and wherein the United States Treasury rate is the five-year “on the run” Treasury rate. ### Claim 15 (depends on 10) The computer-implemented method of claim 10 wherein the upside participation factor is specified at or before the purchase payment is received and the upside participation factor remains constant throughout the guarantee period. ### Claim 16 (depends on 15) The computer-implemented method of claim 15 wherein the upside participation factor is 1. ### Claim 17 A computer-implemented method of administering an annuity account comprising: electronically storing in an electronic storage the value of the annuity account; defining at a processor and electronically storing in the electronic storage a base interest rate; electronically applying at the processor the base interest rate to the value of the annuity account for an initial predefined period to obtain a first result; electronically storing in the electronic storage the first result; obtaining and electronically storing in the electronic storage a base referenced rate of interest as of a specified date; obtaining a current referenced rate of interest as of the date the current referenced rate of interest is determined; electronically storing in the electronic storage the current referenced rate of interest; determining at the processor a total interest rate by comparing the base referenced rate of interest to the current referenced rate of interest and: (i) if the current referenced rate of interest is less than or equal to the base referenced rate of interest, determining the total interest rate to be equal to the base interest rate, and (ii) if the current referenced rate of interest is greater than the base referenced rate of interest, determining the difference between the current referenced rate of interest and the base referenced rate of interest and determining the total interest rate to be the sum of the base interest rate and an interest enhancement that is determined based on said difference between the current referenced rate of interest and the base referenced rate of interest, electronically storing in the electronic storage the total interest rate. ### Claim 18 (depends on 17) The computer-implemented method of claim 17 further comprising electronically applying at the processor the total interest rate to the first result for a period subsequent to the initial predefined period to obtain a second result. ### Claim 19 (depends on 18) The computer-implemented method of claim 18 further comprising electronically storing in the electronic storage the second result. ### Claim 20 (depends on 19) The computer-implemented method of claim 19 wherein the base referenced rate of interest is a specified United States Treasury rate as of the specified date and wherein the current referenced rate of interest is the same United States Treasury rate as of the date the current referenced rate of interest is determined. ### Claim 21 A computer-readable medium comprising computer-executable instructions that when executed cause a computer device to perform the method comprising: defining a base interest rate, said base interest rate being applied to the value of the account for an initial predefined period; defining a base referenced rate of interest as of an initial date; for each subsequent predefined period following the initial predefined period: (A) determining a current referenced rate of interest as of a second date; (B) defining a total interest rate that will be applied to the value of the account during the subsequent predefined period, wherein: (i) if the current referenced rate of interest is less than or equal to the base referenced rate of interest, the total interest rate will be equal to the base interest rate; and (ii) if the current referenced rate of interest is greater than the base referenced rate of interest, the total interest rate will be the sum of the base interest rate and an interest enhancement; and applying the total interest rate for each subsequent predefined period to the value of the account during the predefined period.