LLQP Segregated Funds & Annuities · Component 3.2 · 25% of the exam
The implementation of a recommendation involving a switch from one seg fund to another within a contract requires:
- AA new application and information folder, since each fund is a separate contract with the insurer and must be documented as such
- BNothing in writing, since switches within a contract are administrative and can be done by telephone
- CA new KYC form only, since the client's profile is the only thing the insurer needs to approve the switch
- A signed switch instruction, fund facts for the new fund, a guarantee check, and a check on fees or limits
Correct answer: D) A signed switch instruction, fund facts for the new fund, a guarantee check, and a check on fees or limits
Switches are simpler than new contracts but still have disclosure and documentation requirements.
Why the other options are wrong
- AThe contract continues; no new application is needed.
- BDocumentation is required for a switch.
- CKYC should be current, but a switch instruction is also needed.
Exam tip
Switch: instruction, fund facts, fee/limit check.
Common mistake
Executing verbal switch instructions without record.
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:
- 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:
- Implementation is complete when:
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.