BI-SEM Group
Purpose of this Site
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We propose a reliable, auditable Method, BI-SEM, for Financial Advisors to determine the current value of a Client’s Deferred Annuity, to meet the Advisor's "Best Interest" and "Due Diligence" needs.
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We invite comment and debate on the Method's Goals, Principles, and Steps.
Our goal is to facilitate Financial Advisors’ Best Interest Requirements by defining a General, Principles-Based Method for evaluating any Deferred Annuity.
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It is hoped that this Generalized Method will garner widespread recognition and adoption by software developers who provide portfolio-oriented apps to Financial Advisors.
Mission Statement
Premise
No reliable, auditable generalized method currently exists for Financial Advisors to determine the current value of a Client’s Deferred Annuity. However, one is urgently needed for their Best Interest and Due Diligence requirements.
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On this website, we propose such a method. We encourage discussion about its efficacy and hope that this will eventually lead to a more meaningful and effective version that will gain general acceptance and adoption.
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The proposed Generalized Method leverages important work already done by the American Academy of Actuaries and the NAIC for Insurance Industry Principles-Based Reserves (PBR) but from the policyholder/investor POV.
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We have named the prototype Evaluation Method “Best Interest - Simulated Evaluation Method”, or BI-SEM. It requires a Stochastic Model that generates multiple economic Scenarios. Frequency Distributions are created for Key metrics calculated for each Scenario, based on projected net cash flows generated by the individual portfolio component.
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The method also requires that calculations be based on a Client’s personal attributes and goals. Because it produces Frequency Distributions, various Percentile Values can also be evaluated.