IFC Segregated Funds

Question 1

What is the primary legal structure of a segregated fund in Canada?

Accepted Answer

An insurance contract issued by a life insurance company

Answer

A securities trust governed by the CSA

Answer

A limited partnership registered with IIROC

Answer

A mutual fund corporation regulated under provincial securities law

Question 2

Which regulatory body primarily oversees segregated funds in Canada?

Accepted Answer

Provincial insurance regulators

Answer

The Canadian Securities Administrators (CSA)

Answer

The Investment Industry Regulatory Organization of Canada (IIROC)

Answer

The Mutual Fund Dealers Association (MFDA)

Question 3

What minimum maturity guarantee must Canadian segregated funds offer under industry guidelines?

Accepted Answer

75% of net premiums paid

Answer

50% of net premiums paid

Answer

90% of net premiums paid

Answer

100% of net premiums paid

Question 4

What is the typical minimum holding period required before a segregated fund's maturity guarantee applies?

Accepted Answer

10 years

Answer

5 years

Answer

7 years

Answer

15 years

Question 5

In a segregated fund contract, who is referred to as the 'annuitant'?

Accepted Answer

The person whose life the insurance coverage is based on

Answer

The insurance company issuing the contract

Answer

The beneficiary who receives the death benefit

Answer

The financial advisor who sold the contract

Question 6

Which feature of a segregated fund can potentially protect the investor's assets from creditors?

Accepted Answer

The named beneficiary designation

Answer

The maturity guarantee provision

Answer

The reset option

Answer

The death benefit guarantee

Question 7

How are segregated fund assets protected if the issuing life insurance company becomes insolvent?

Accepted Answer

Through Assuris, the life insurance industry protection plan

Answer

Through the Canada Deposit Insurance Corporation (CDIC)

Answer

Through the Canadian Investor Protection Fund (CIPF)

Answer

Through direct federal government guarantee