Question

click on the checkmark or x to get feedback.
question # 21:
elvin is an insurance agent advising his new client, sam on transferring his rrsp account to a segregated fund. when asked for his identification and social insurance number (sin), sam says he does not have his identification with him, and that he does not remember his sin. however, he agrees to provide his sin over the phone. he does provide the necessary details of the account from which the funds are to be transferred. should elvin report this as a suspicious transaction to the financial transactions and reports analysis centre of canada (fintrac)?
a) elvin should report because the transaction is suspicious.
b) elvin should not report because the client is a canadian citizen.
c) elvin should not report because the client is purchasing a registered product.
d) elvin should report because the amount is being transferred from another account.
your answer
× elvin should report because the transaction is suspicious.
rationale:
under the proceeds of crime (money laundering) and terrorist financing act, the proceeds of crime (money laundering) regulations and fintracs guidelines, the life insurance agent is required to establish a clients identity who: is purchasing an immediate or deferred annuity; or is purchasing a life insurance policy that is not an exempt policy, towards which the client can pay a minimum of $10,000 during the annuity or policy, regardless of the payment method. exempted products consist of: individual or group registered retirement income plans (rrsp, rrif, lira, lif, dpsp, rpp, and tfsa); exempt life insurance policies; and health or accident insurance policies with no cash surrender value (csv). (see section 4.1.4.2)

Explanation:

Under FINTRAC guidelines, registered retirement products like RRSPs are exempt from identity verification requirements that trigger suspicious transaction reports. Since Sam is transferring funds from an RRSP (a registered product), Elvin is not required to report this situation as suspicious.

Answer:

c) Elvin should not report because the client is purchasing a registered product.