LLQP Segregated Funds & Annuities · Component 3.2 · 25% of the exam
The agent's authority in implementing a segregated fund contract:
- AIncludes changing the guarantee level after issue, since the agent represents the insurer in the contract
- BIncludes negotiating the management fee for a large client, since the insurer delegates pricing to its agents
- CIncludes binding the insurer from the date the application is signed, in the same way as a property insurance agent
- Does not include binding coverage, altering terms, guaranteeing values, or accepting deposits payable to the agent
Correct answer: D) Does not include binding coverage, altering terms, guaranteeing values, or accepting deposits payable to the agent
Agents solicit and transmit. Deposits must be payable to the insurer; handling client money personally is misconduct.
Why the other options are wrong
- AGuarantees are contractual and set by the insurer.
- BFees are set by the insurer.
- CSegregated fund agents have no binding authority.
Exam tip
Agent cannot bind or alter; deposits payable to the insurer only.
Common mistake
Accepting a cheque payable to the agent.
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.