An insurance agent, Michael, is approached by a new client, Robert, who wishes to purchase a segregated fund contract. Robert provides cash totaling $12,000 to pay for the first year's premium. What action must Michael take based on FINTRAC regulations?

Question: An insurance agent, Michael, is approached by a new client, Robert, who wishes to purchase a segregated fund contract. Robert provides cash totaling $12,000 to pay for the first year's premium. What action must Michael take based on FINTRAC regulations?

Answer options: ✅ Michael must report this transaction to FINTRAC as a large cash transaction because it exceeds the $10,000 threshold.

• Michael can accept the cash without any further action, as it's a first premium payment.
• Michael should suggest Robert pay via cheque or wire transfer, but if Robert insists on cash, no report is necessary.
• Michael must only report the transaction if he suspects it is linked to terrorist financing.

Correct answer: Michael must report this transaction to FINTRAC as a large cash transaction because it exceeds the $10,000 threshold.

Explanation: FINTRAC requires financial entities, including life insurance companies and their agents, to report large cash transactions of $10,000 or more received in a single transaction or multiple transactions within a 24-hour period.