Transition From LIBOR Will Impact Existing Annuity Contracts
August 13, 2021 by John Hilton
The phase-out of the London Interbank Offered Rate (LIBOR) is coming and is set to cause major disruption for insurers.
LIBOR is the primary benchmark for short-term and variable interest rates used to determine interest rates on a variety of financial instruments. Those include not only investments held by insurers, but existing annuity contracts with credited rate equal to LIBOR plus a margin.