- (Topic 3)
Bachir owns a successful video game business and has 10 employees. The time has come to plan business succession and the eventual sale of the business. Bachir??s nephew Kharim, who shows a real interest in the business, is identified as his successor. Bachir would like to protect his sales price until such time as the business is sold to Kharim, who does not have the funds yet and will need a few years to amass the required amount. Bachir and Kharim consult insurance agent Bianca for advice. What should Bianca propose?
Correct Answer:
D
Comprehensive and Detailed Explanation:
Disability buyout insurance funds a buy-sell agreement if the owner (Bachir) becomes disabled, ensuring Kharim can purchase the business at the agreed price (Chapter 5:Insurance to Protect Businesses).
Option A: Incorrect; Kharim??s disability doesn??t affect Bachir??s sale. Option B: Incorrect; no loan is mentioned.
Option C: Incorrect; key person protects business operations, not succession. Option D: Correct; protects Bachir??s sale value if he??s disabled.
Reference: LLQP Accident and Sickness Insurance Manual, Chapter 5:Insurance to
Protect Businesses.
- (Topic 2)
Last month, Suzanne purchased a life insurance policy from a local agent. The agent told her that the policy would accrue a cash value that she could draw from in her retirement years and that the premium would never increase. After recently meeting with a close friend, who is a retired insurance advisor, she was dismayed to learn that what was sold to her is in fact a term policy with no cash value. If Suzanne wishes to make a formal complaint against the agent, which authority can assist her in doing so?
Correct Answer:
B
Comprehensive and Detailed in Depth Explanation with Exact Extract from Documents and Guides:
The agent??s misrepresentation violates ethical standards. TheIFSE Ethics and Professional Practice Course (Common Law)identifies the OmbudService for Life and Health Insurance (OLHI) as an independent body that assists consumers with complaints against insurance agents or companies when internal resolution fails. Assuris (A) protects policyholders if an insurer fails, not for agent misconduct. The Canadian Council of Insurance Regulators (C) coordinates policy, not complaints. The Office of the Privacy Commissioner (D) handles privacy issues, not misrepresentation. OLHI is the correct avenue for Suzanne, making B correct.
References:
IFSE Ethics and Professional Practice Course (Common Law), Module 4: Regulatory Environment, Section on "OmbudService for Life and Health Insurance."
- (Topic 5)
Planet Source decides to implement a defined contribution pension plan (DCPP) for its 75 employees. The company's president appoints Josie, the human resources director, as the plan administrator.
Which of the following BEST describes Josie's responsibility as a plan administrator?
Correct Answer:
A
As a plan administrator for a defined contribution pension plan (DCPP), Josie??s primary responsibility is to manage the pension plan, which includes overseeing day-to-day operations, ensuring regulatory compliance, and handling communications with plan members. According to LLQP, plan administrators are tasked with ensuring the effective management and administrationof the plan, rather than setting benefit structures or addressing funding issues, which are typically responsibilities of the employer.
Options B, C, and D describe responsibilities typically held by the employer or plan sponsor, not the administrator.
- (Topic 2)
Abishola purchases segregated funds from her insurance agent Bob. Before finalizing the transaction, she tells Bob that she will need the funds in a few months to make a down payment on a condo. Later, when Abishola calls to withdraw her funds, Bob informs her that she will incur a fee for withdrawing her funds prematurely. Abishola complains to Bob, and then to Bob's supervisor, without receiving a satisfactory response. To which organization can Abishola escalate her complaint?
Correct Answer:
D
The OmbudService for Life and Health Insurance (OLHI) provides a platform for consumers to resolve disputes related to life and health insurance products in Canada. If Abishola is
dissatisfied with the responses from her insurance agent and his supervisor, she can escalate her complaint to the OLHI, which offers a neutral and independent review of disputes concerning insurance products like segregated funds.
Other organizations mentioned, such as Assuris, focus on protecting policyholders in cases of insurer insolvency, not individual complaints.
- (Topic 5)
(Ten years ago, Yamina invested $2,500 in a segregated fund contract with a 75%/100% guarantee structure. The market value of the contract peaked at $4,500 but then fell. Now, at maturity, the units are worth $2,250.
How much can Yamina expect to receive?) A. $3,375
Correct Answer:
B
With a75% maturity guarantee, Yamina is guaranteed to receive at least75% of the original investmentat maturity, regardless of market performance.
75% ?? $2,500 =$1,875, but because there is aresetpossibility if applicable and a100
