The proceeds of a non-registered segregated fund were paid as a death benefit to the two daughters of the deceased holder of the segregated fund, who had been designated under the fund to received the death benefits. In finding that the payment of the death benefits did not constitute a transfer to which s. 160 applied, Rowe DJ stated (at paras. 33, 34):
As a hybrid fund, although it was a contract with London Life for an investment plan designed to produce a return, it was also an insurance policy pursuant to which Arthur W. Higgins could designate beneficiaries of any balance upon his death. …
Regarding the nature of the segregated fund at issue, I conclude that the overarching feature was the life insurance component. The Estate of the late Arthur W. Higgins was not party to the contract with London Life. In paying each appellant the sum of $5,096.08 on February 21, 2002, London Life was fulfilling a legal obligation. The Minister assumed incorrectly that the segregated fund belonged in the same category as an RRSP or RRIF. That is not correct according to the evidence which permits me to accept the proposition that the right to confer a death benefit to named beneficiaries was an integral and indivisible component of the policy/plan in force. Arthur W. Higgins had the right to expect that London Life upon his death - would abide by its contractual obligation to transfer the residue of said fund to his two daughters in equal shares.