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LLQP (life licence)

LifeLLQP Life Insurance✓A&SLLQP Accident & Sickness Insurance Seg FundsLLQP Segregated Funds & Annuities EthicsLLQP Ethics & Professional Practice (Common Law)

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Segregated Funds and Annuities · Components 3-4: recommendation and service (35%)

Disclosure, Suitability & Contract Service

The CCIR/CISRO Segregated Funds Guidance (Nov 2025) sets national expectations for selling and servicing seg fund contracts, built on fair treatment of customers.

Customer service during the coverage2 min read5 sections

Must-know for the exam

Before application: deliver the current information folder and Fund Facts, and discuss the Key Facts.
KYC must be updated at least every 3 years, annually if the client borrowed to invest, and on any material change.
Reasons why letter: promptly after confirmation of issue, covering needs, how they are met, unmet needs, client instructions and the sales charge option.
Moving money between contracts: compare guarantees (especially those above market value), resets, fees, liquidity and tax; recommend only if the new one better suits the client.
Borrowing to invest: extra KYC, a written leveraging strategy and Appendix C risk disclosure; review at least yearly.
Records: keep at least 5 years after the contract ends.
Seg funds need a life licence; mutual funds need securities registration.
Advertising must not suggest guarantees are CDIC-insured; Assuris protects seg funds, OLHI handles unresolved complaints.

On this page · 5 sections

Traps that cost marks

Delivering documents only after the sale.
Treating delivery as disclosure.
Thinking KYC is collected only once.
Applying the three-year cycle to leveraged clients.
Waiting for the scheduled review after a material change.
Thinking it is only needed when a client complains.
Leaving out unmet needs.
Comparing only returns.

Why it matters on the exam

Components 3 and 4 test the sales process step by step: disclosure, suitability, documentation and service.

Sales process

Step	What the guidance expects
Know your customer	Collect and update needs, goals, risk, horizon, finances
Know your product	Features, guarantees, fees, risks, rights
Pre-application	Deliver and explain information folder and Fund Facts
Recommendation	Suitable for identified needs; disclose conflicts
After issue	Reasons why letter in plain language
Service	Remind of rights such as resets; update KYC

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Exam-style questions

Nina, a life agent in Oakville, Ontario, meets Gwen, 63, who wants to invest $120,000 from a maturing GIC in a segregated fund contract. Nina is running late for another appointment, so she hands Gwen the information folder and says, 'It's all in there.' Gwen intends to sign the application at their next meeting. What else is expected of Nina before the client applies?
Omar, a life agent in Brandon, Manitoba, sold a segregated fund contract to Ruby, 51, eighteen months ago, after completing a full KYC review. At a community event he learns from Ruby herself that she has lost her job at the local plant and will now need regular income from her savings. Her next scheduled review is not due for another 18 months. What should he do?
Mateo, an agent in Kamloops, British Columbia, has just placed a segregated fund contract for Leticia, 57, who wanted growth, a death benefit guarantee for her children and some access to cash. He is now drafting the written reasons why letter to send her after the contract is issued. Which must be in the reasons why letter?

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