System and method for administering variable annuities

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.

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.