YOU ASK:

What is the definition of Segregated Account?

WE ANSWER:

A Segregated Account refers to a separate account that insurance companies maintain in order to keep the company's assets (general account) from the customers'. This helps the insurance company to manage the funds generated from variable annuities and other variable insurance products.

Segregated accounts serve to ensure that there is no misuse of customers' funds - since the two funds are clearly separated, neither the general fund nor the customers' funds are used in the wrong way. With segregated accounts, it's also easier to identify which amount belongs to which group. This is particularly helpful in instances where something substantial happens to the company (such as its becoming insolvent).

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