System and method for administration of costs related to annuities

A system for administration of an insurance annuity account issued to a customer by an insurance company and having a premium invested in funds selected by the customer, comprising:

• a processor;
• a memory in communication with the processor;
• the processor being adapted to:
• receive data including a net asset value of the account at a commencement of a first period;
• receive data including a performance-independent charge applicable to the account in the nature of a charge related to compensation of advisors of the customer- selected funds and based on a fraction of the net asset value of the account;
• on a basis of a second period, shorter than the first period, throughout the first period:
• calculate a fractional charge based on the net asset value of the account on the basis of the second period, the value of the charge and the number of second periods in the first period;
• update the net asset value on the basis of the second period by decrementing the net asset value in the amount of the fractional charge;
• store the updated net asset value in memory;
• and store each of the fractional charges in memory;
• at the end of the first period:
• calculate a charge for the first period based on the net asset value of the account on one day during the first period and the value of the charge;
• calculate a sum of the fractional charges for the first period;
• calculate a difference between the first period charge and the sum of the fractional charges;
• if the first period charge is less than the sum of the fractional charges, calculate an updated net asset value equal to the sum of the updated net asset value for the day of calculation and the difference between the first period charge and the sum of the fractional charges;
• and provide an output signal having data indicative of the net asset value and, if the net asset value was increased by the difference between the first period charge and the sum of the fraction charges, indicative of the difference between the first period charge and the sum of the fractional charges.

A computer-implemented method for administration of a variable annuity account issued to a customer by an insurance company and having a premium invested in funds selected by the customer, comprising the steps of:

• receiving by a processor data including a net asset value of the account at a commencement of a first period;
• receiving by the processor data including a performance-independent charge in the nature of a charge related to compensation of advisors of the customer-selected funds applicable to the account and based on a fraction of the net asset value of the account;
• on a basis of a second period, shorter than the first period, throughout the first period:
• calculating by the processor of a fractional charge based on the net asset value of the account on the basis of the second period, the value of the charge and the number of second periods in the first period;
• storing the fractional charge in memory;
• updating the net asset value by decrementing the net asset value in the amount of the fractional charge;
• storing the updated net asset value in memory;
• and storing each of the fractional charges in memory;
• at the end of the first period:
• calculating a first period charge for the first period based on the net asset value of the account on one day during the first period and the rate of the charge;
• calculating a sum of the fractional charges for the first period;
• calculating a difference between the first period charge and the sum of the fractional charges for the first period;
• if the first period charge is less than the sum of the fractional charges, calculating an updated net asset value equal to the sum of the updated net asset value for the day of calculation and the difference between the first period charge and the sum of the fractional charges;
• and providing an output signal having data indicative of the net asset value and, if the net asset value was increased by the difference between the first period charge and the sum of the fraction charges, indicative of the difference between the first period charge and the sum of the fractional charges.

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:

• receiving data including a net asset value of a variable annuity account issued to a customer by an insurance company and having a premium invested in funds selected by the customer at a commencement of a first period;
• receiving data including a performance-independent charge in the nature of a charge related to compensation of advisors of the customer-selected funds applicable to the account and based on a fraction of the net asset value of the account;
• on a basis of a second period, shorter than the first period, throughout the first period:
• calculating a fractional charge based on the net asset value of the account on the basis of the second period, the value of the charge and the number of second periods in the first period;
• updating the net asset value by decrementing the net asset value in the amount of the fractional charge;
• storing the updated net asset value in memory;
• and storing each of the fractional charges in memory;
• at the end of the first period:
• calculating a first period charge for the first period based on the net asset value of the account on one day during the first period and the rate of the charge;
• calculating a sum of the fractional charges for the first period;
• calculating a difference between the first period charge and the sum of the fractional charges for the first period;
• if the first period charge is less than the sum of the fractional charges, calculating an updated net asset value equal to the sum of the updated net asset value for the day of calculation and the difference between the first period charge and the sum of the fractional charges;
• and providing an output signal having data indicative of the net asset value and, if the net asset value was increased by the difference between the first period charge and the sum of the fraction charges, indicative of the difference between the first period charge and the sum of the fractional charges.