A synthetic GIC or "walled off "separate account GIC issued as a diversification alternative to a traditional GIC.

Also called synthetic GICs, this is a class of investments with characteristics similar to those associated with traditional investment contracts (GICs) issued by life insurance companies. Alternative GICs allow the investor to separate the components of traditional investment contracts and recombine them in different ways to tailor the risk, reward, and liquidity characteristics of individual contracts and the portfolio. Many alternative GICs allow for direct legal ownership of the underlying assets or collateralization of pledged assets. Alternatives may be issued by insurance companies, banks, brokerage houses and, indirectly, by investment managers. They can be actively or passively managed.