IFSE Institute Updated LLQP Exam Questions and Answers by raina

Comprehensive and Detailed in Depth Explanation with Exact Extract from Documents and Guides:

Under Canadian common law and insurance principles, a minor who has reached the age of 16 can enter into an insurance contract on their own life, provided they have the capacity to understand the contract. Marcel, at 16, is legally able to apply for and own a life insurance policy where he is also the insured. TheIFSE Ethics and Professional Practice Course (Common Law)emphasizes that the policy owner must have an insurable interest in the insured, which Marcel inherently has in himself. There is no requirement for the application to be signed in his province of residence (New Brunswick), nor is there a need for a parent to witness his signature or act as the policy owner, as long as Marcel consents and understands the contract. His father paying the premiums does not affect ownership, as premium payments can be made by a third party without transferring ownership. Option A is correct because Marcel can legally be both the owner and the insured.

Comprehensive and Detailed In-Depth Explanation: Alec faces a lapsed policy due to communication failures involving his advisor and firm. The Autorité des marchés financiers (AMF) regulates Quebec’s financial advisors and firms under the Distribution Act (Sections 103–115), handling complaints about advisor negligence or firm unresponsiveness. Option C is correct, as the AMF can investigate Olivier’s firm’s failure to update Alec’s address or respond. Option A (CLHIA) is an industry group without regulatory power. Option B (Chambre de la sécurité financière) oversees advisor ethics but focuses on individual conduct, not firm-wide issues or insurer disputes. Option D (Assuris) protects policyholders if an insurer fails, not for lapses due to non-payment. The Ethics manual stresses advisors’ duty to maintain client communication, supporting AMF jurisdiction here.

Comprehensive and Detailed In-Depth Explanation: Under the Civil Code of Quebec (Article 2415), a policyholder (or subscriber) is the entity that owns and pays for an insurance or annuity contract, which can be an individual or a legal person like a corporation. Xtra, as a company, can use its retained earnings (unregistered capital) to fund an annuity contract and be designated as the policyholder, making option D correct. Option A is false, as legal persons can own contracts (e.g., group insurance). Option B’s requirement of a registered plan is incorrect—annuities can be funded with non-registered funds. Option C introduces a “subrogated annuitant,” a misnomer here, as the annuitant is the person receiving payments, not a decision-maker, and no such requirement exists. The LLQP and Ethics manual confirm that corporations can be policyholders for business purposes, like key person coverage or investments.

Comprehensive and Detailed In-Depth Explanation: Under Quebec’s Civil Code, specifically within the framework of family patrimony (Articles 414–426), the partition of property upon divorce includes assets acquired during the marriage that are designated as part of the family patrimony. The family home, cars, RRSPs (Registered Retirement Savings Plans), and benefits accrued under the RRQ (Régie des rentes du Québec, or Quebec Pension Plan) are already listed, as they are explicitly included under Article 415. However, family patrimony also encompasses other property used for the family’s benefit, such as bank accounts that hold funds accumulated during the marriage for family use. TFSAs (Tax-Free Savings Accounts) are individual savings accounts, but if they were used for family purposes or funded with marital income, they could also be considered. The Ethics and Professional Practice (Civil Law) manual emphasizes thatadvisors must ensure clients fully understand the scope of divisible assets under family patrimony rules to avoid omissions. Life insurance cash surrender values (option C) are not automatically included in family patrimony unless designated for family use, and “nothing else” (option D) overlooks additional divisible assets like bank accounts. Option B, “Bank accounts and TFSAs,” correctly expands the list to include other relevant marital property, aligning with the Civil Code’s broad interpretation of family patrimony.