LLQP Segregated Funds & Annuities · Component 3.2 · 25% of the exam
Before or at the time of taking a segregated fund application, the agent must provide the client with:
- The information folder, fund facts for each fund selected and the contract, with delivery documented
- BThe insurer's annual report and financial statements, so the client can assess the strength of the guarantee
- COnly a business card and a brochure, since the full disclosure documents are sent by the insurer with the contract
- DNothing at this stage, since disclosure obligations arise only once the contract has been issued
Correct answer: A) The information folder, fund facts for each fund selected and the contract, with delivery documented
Disclosure at point of sale is a regulatory requirement under the insurance regulators' guidelines for individual variable insurance contracts.
Why the other options are wrong
- BThe annual report is not a required disclosure document.
- CA business card is not a disclosure document.
- DDisclosure is mandatory before or at application.
Exam tip
Information folder + fund facts delivered and acknowledged before/at application.
Common mistake
Sending the information folder after the deposit.
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.