LLQP Segregated Funds & Annuities · Component 3.2 · 25% of the exam
A client wants to fund a segregated fund with a large cash deposit. The agent must:
- Follow the insurer's cash policy, file a large cash report if required, and assess whether it is suspicious
- BDeposit the cash in the agent's own account and write a cheque to the insurer, since insurers do not accept cash from clients
- CAccept the cash and forward it, since the source of a client's money is not the agent's concern
- DSet AML aside for cash, since the reporting rules apply only to electronic transfers from abroad
Correct answer: A) Follow the insurer's cash policy, file a large cash report if required, and assess whether it is suspicious
Cash handling is tightly controlled. Suspicious transaction reporting has no threshold.
Why the other options are wrong
- BDepositing client money in the agent's account is misappropriation.
- CPolicy and reporting apply to cash deposits.
- DAML obligations apply fully to cash deposits.
Exam tip
Cash: insurer policy, LCTR at threshold, STR if suspicious.
Common mistake
Structuring deposits to stay under the threshold.
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.