Previous TopicTopic MenuNext TopicSet BookmarkNav bar

Trends

In valuing the rate of interest credited (rate of return) on their investments, a number of insurance companies have moved from the calendar year to a quarterly approach. Some have even adopted techniques for valuing the return on a daily basis. The objective of such a move is twofold:

  • The insurance company can move quickly if it believes the spread between the rate of return actually being earned on its investment and the rate credited to the contract is moving in a direction disadvantageous to its best interests, and
  • Competitive position in the marketplace can be maintained, especially when interest rates increase sharply.


Go to next section in this lesson

Copyright © Broker Educational Sales & Training, Inc.