The Rainbow Crediting Method is an indexed crediting method that looks back over the crediting period and then credits a percentage depending on the performance of the better-performing indexes. For example, an insurance carrier can offer indices A, B, and C on an annual point-to-point multiple index crediting system. In the crediting formula, the best-performing index receives a 75 percent weighting, the next-best performing index receives a 25 percent weighting, and the least-best performing index receives no credit. At the end of the term, the insurance company applies a Participation Rate, Cap, or Spread to any potential indexed profits.
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