Chapter 20 Segregated Funds Exam Questions and Answers with complete solutions | Graded A+

Which body is responsible for ensuring that federally regulated insurance companies are adequately capitalized under the requirements of the federal Insurance Companies Act? A. CLHIA 0% B. Assuris C. OSFI D. IIROC - C.A federal regulatory body, the Office of the Superintendent of Financial Institutions (OSFI), is responsible for ensuring that federally regulated insurance companies are adequately capitalized. The federal Insurance Companies Act governs these solvency requirements. Segregated fund contracts are subject to the OSFI guidelines on guarantee provisions. These rules are set out in OSFI's guidelines respecting equity-linked insurance and annuity contracts with guaranteed benefits. Select the correct statement about guaranteed minimum withdrawal benefit (GMWB) plans. Student Response Value Correct Answer Feedback A. GMWB plans are pure insurance products. B. GMWB plans provide a guaranteed minimum annual payout no matter how the fund performs. C. These plans are especially suitable for clients with 10 to 20 years to retirement. 0% D. GMWB plans allow investors to hold a diversified portfolio of segregated funds through a single investment. - B. GMWB plans provide a guaranteed minimum annual payout - typically 5% to 7% of the amount invested - no matter how the investments perform. GMWB plans are a combination of investments and insurance. These plans are especially suitable for clients with 5 to 10 years to retirement, who cannot afford significant losses in their portfolio during that time. Portfolio funds, which invest in other funds instead of buying securities directly, allow investors to hold a diversified portfolio of segregated funds through a single investment. 3. How can the designation of an irrevocable beneficiary be changed