Funds net income cap gain dividends and interests is

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Fund's net income (cap gain, dividends, and interests) is deemed to be the contract holder's income. Taxable in non-registered accounts. Allocation: the amount of income deemed to be earned by each contract holder. A % of the fund's total income is allocated to each unit. Segregated Funds do not suffer a decline in the NAV after an allocation of income (unlike mutual funds). Capital losses/gains can be passed on to the contract holder (unlike mutual funds).
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-Tax for Guarantees: Payments from a segregated fund contract’s maturity guarantees are taxable. (if proceeds < ACB, income tax payable on guaranteed amount ). But contract holder can use this as capital loss. If Proceeds > ACB, contract holder taxed on the difference. - Regulation of Segregated Funds: Subject to the provincial legislation governing all life insurance contracts. Each province accepted Canadian Life and Health Insurance Association Inc. (CLHIA) guidelines as regulatory requirements. OSFI is responsible for ensuring that federally regulated insurance companies are adequately capitalized under federal Insurance Companies Act. o Maturity guarantee payable at the end of the term of the policy cannot exceed 100% of the gross premiums paid by the contract holder (applies to reset feature too). o The initial term of the segregated fund contract cannot be less than ten years. o There can be no guarantee of any amounts payable on redemption of the contract before the annuitant’s death or the contract maturity date. Assuris: insurance industry’s self-financing provider of protection against the loss of policy benefits in the event of the insolvency of a member company. Incorporated federally as a non- profit organization.
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