LLQP Segregated Funds & Annuities · Component 3.2 · 25% of the exam
A client's daughter presents a power of attorney and asks to open a segregated fund contract for her mother. The agent must:
- Arequire the mother to attend in person despite the power of attorney being produced
- Brefuse, because a power of attorney may never be used for insurance contracts in Canada
- Caccept the request immediately, since a power of attorney gives complete and unlimited authority
- review the document to confirm it is in force and covers the transaction being requested
Correct answer: D) review the document to confirm it is in force and covers the transaction being requested
Powers of attorney vary in scope and may be limited, conditional on incapacity or not yet effective. The agent should read the document, keep a copy, confirm the attorney is acting within it and remain alert to signs of financial abuse.
Why the other options are wrong
- ARequiring attendance would defeat the purpose of a validly granted authority.
- BAn attorney acting within a valid document may transact on the client's behalf.
- CAuthority under a power of attorney is defined by the document's own terms.
Exam tip
Read the power of attorney, keep a copy and check it covers this transaction.
Common mistake
Accepting the existence of a power of attorney without reading what it permits.
What this tests
CISRO competency component 3.2 — Implement a recommendation adapted to the client's needs and situation — which is weighted at 25% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 3
- A client's spouse must sign for:
- When the insurer requests additional information after the application (for example, source of wealth for a large deposit), the agent should:
- The implementation of a recommendation involving a switch from one seg fund to another within a contract requires:
- A client wishes to designate a charity as beneficiary of a segregated fund. Implementation should:
- For a deferred annuity implemented for a client, the agent should confirm:
- The agent's record of the implementation should be retained:
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.