RSM230H1 Chapter Notes - Chapter 20: Financial Statement, Legal Personality, Mutual Fund
Document Summary
Chapter 20: segregated funds and other insurance products. Money is pooled and invested in securities with the goal of enhancing wealth (similar to mutual funds) Only available from insurance companies & structured as insurance contracts. No ownership of the underlying assets: contract is with the insurance company. Exempt from securities laws and subject to insurance laws. Beneficiary is the person receiving the benefit (there are restrictions on who can be a beneficiary) Segregated funds have unique features that enable them to meet special client needs, such as: Regulated by provincial insurance regulators bc they are insurance contracts. Segregated funds are life insurance contracts, known as individual variable insurance contracts (ivics), between a contract holder and an insurance company. These special features incur greater costs as such have higher mers than uninsured funds. Mers incorporate the cost of the guaranteed benefit. Investors assigned notional units (because investors are not owners in the fund) so as to compare against mutual funds.
