This ratio indicates whether a society’s investment income is adequate to meet the interest
requirements of its reserves. The adequacy of investment income in meeting a society’s interest
obligations is a key element in a society’s profitability. The usual range includes all results
greater than 125 percent and less than 900 percent.
A ratio of 125 percent or less may indicate that a society’s investment yield is not adequate to
meet its interest requirements. This may result from a low yield or from interest guarantees or
other interest requirements that may be too high for the investment environment of the society.
A ratio of 900 percent or more may indicate reporting errors concerning items of the interest
required, as listed above, and should call for an investigation concerning the method of
determining interest required.