The exam expects you to know both how these products are similar and how they differ. Similar: both pool money into professionally managed investment portfolios of equities, bonds, or other assets, with the value fluctuating daily. Different: everything that flows from the insurance wrapper.
| Feature | Segregated Fund (IVIC) | Mutual Fund |
|---|---|---|
| Governing law | Provincial Insurance Act | Provincial securities legislation |
| Sold by | Life insurance companies only | Investment dealers, fund companies |
| Maturity guarantee | Minimum 75% by law | None |
| Death benefit guarantee | Minimum 75% by law | None |
| Beneficiary designation | Yes -- direct on the contract | No |
| Probate bypass | Yes -- passes outside the estate | No -- goes through estate |
| Creditor protection | Possible (preferred/irrevocable beneficiary) | Generally not available |
| Reset option | Available in many contracts | Not available |
| Annual tax reporting | T3 slip (deemed trust) | T3 slip (mutual fund trust) |
| Regulatory oversight | OSFI (federal insurers), provincial insurance regulators | Securities regulators (e.g. OSC) |
The statutory guarantee minimums (75%/75%) are set by CISRO/provincial insurance regulations. Many insurers offer higher guarantees (100%/100%).