For variable products, how often must the separate account be valued?

For variable products, how often must the separate account be valued?

• A. Daily, excluding weekends and national holidays, based on market value of underlying securities.
• B. Monthly, at the end of each month.
• C. Annually, on the policy anniversary date.
• D. Quarterly, on each quarter end.

Answer: (A)

The value of the separate account in a variable product is tied to the daily market value of its underlying investments. Because markets are open on business days and closed on weekends and most holidays, the separate account is valued every business day, reflecting the current market value of those assets. This daily valuation is essential so the contract value, benefits, surrender charges, and other calculations stay accurate with real-time market changes. Monthly, quarterly, or annual valuations wouldn’t capture daily fluctuations and could lead to misstatements of value, which is why the standard practice is daily valuation on business days.

The value of the separate account in a variable product is tied to the daily market value of its underlying investments. Because markets are open on business days and closed on weekends and most holidays, the separate account is valued every business day, reflecting the current market value of those assets. This daily valuation is essential so the contract value, benefits, surrender charges, and other calculations stay accurate with real-time market changes. Monthly, quarterly, or annual valuations wouldn’t capture daily fluctuations and could lead to misstatements of value, which is why the standard practice is daily valuation on business days.