Assessor Resource

FNSISV505
Determine risk rating for investment and insurance products

Assessment tool

Version 1.0
Issue Date: May 2024


This unit describes skills and knowledge required to monitor and analyse risks, and determine the risk rating associated with an existing or new investment or insurance product.

It applies to individuals working in job roles involving specialist knowledge and functions such as underwriting in a range of insurance sectors and may be applied within organisations of various sizes and across a range of client bases.

Work functions in the occupational areas where this unit may be used are subject to regulatory requirements. Refer to the FNS Implementation Guide Companion Volume or the relevant regulator for specific guidance on requirements.

You may want to include more information here about the target group and the purpose of the assessments (eg formative, summative, recognition)



Evidence Required

List the assessment methods to be used and the context and resources required for assessment. Copy and paste the relevant sections from the evidence guide below and then re-write these in plain English.

ELEMENT

PERFORMANCE CRITERIA

Elements describe the essential outcomes.

Performance criteria describe the performance needed to demonstrate achievement of the element.

1. Monitor and collect information on risk factors

1.1 Identify product type so that nature of risk can be identified and handled accordingly

1.2 Identify, monitor and collect relevant information

2. Analyse data collected

2.1 Establish reliability and validity of data

2.2 Assess risk factors associated with product against known exposure factors

2.3 Analyse all information collected on risk factors for product using appropriate methods and documentation

2.4 Identify need for additional information to further evaluate risk

3. Determine risk rating for product

3.1 Determine acceptability of risk using all available information in accordance with organisational policy and procedures, and underwriting guidelines

3.2 Establish risk rating that minimises risk liability within delegated authority

3.3 Document basis for risk rating decision

3.4 Consider compliance with relevant legislation and organisational policy

3.5 Document risk rating information in format that may be used to guide underwriting and product or policy amendment decisions

4. Communicate results to appropriate personnel

4.1 Present results of research and analysis to appropriate personnel in a clear, concise format

4.2 Review risk rating recommendations against existing products and organisational policy

4.3 Finalise risk rating recommendations and notify relevant personnel

Evidence of the ability to:

collect, analyse and interpret information relevant for assessing risk

accurately determine acceptable risk rating for the organisation’s products

effectively document, communicate and monitor the risk ratings

comply with organisational policy, procedures, legislation, regulations and industry codes of practice

present research findings in a suitable format to enable assessment of liabilities.

Note: If a specific volume or frequency is not stated, then evidence must be provided at least once.

To complete the unit requirements safely and effectively, the individual must:

describe basic actuarial principles used to assess risk and return on investment

identify the key features of relevant legislation, regulatory guidelines and industry sector codes of practice

explain industry market position relative to product or line of business

outline organisational information technology systems required for determining risk

describe organisational policy, procedures, underwriting guidelines and authorities covering:

best underwriting guides (BUG)

loss control guides

identify and describe insurance and investment products and the risks associated with these products

define the difference between treaty and facultative reinsurance as it applies to risk

explain the relationship between underwriting and rate making

identify and apply relevant legislation, regulatory guidelines and industry sector compliance requirements as they apply to:

insurance contracts

privacy

consumer protection

financial services

corporations

describe risk analysis and prevention methods and their application

explain types of risk and identify the probability of occurrence.

Assessment must be conducted in a safe environment where evidence gathered demonstrates consistent performance of typical activities experienced in the insurance services field of work and include access to:

organisational records

organisational policy, procedures, legislation and regulations as they relate to contracts of insurance

a range of common technology and software.

Assessors must satisfy NVR/AQTF assessor requirements.


Submission Requirements

List each assessment task's title, type (eg project, observation/demonstration, essay, assingnment, checklist) and due date here

Assessment task 1: [title]      Due date:

(add new lines for each of the assessment tasks)


Assessment Tasks

Copy and paste from the following data to produce each assessment task. Write these in plain English and spell out how, when and where the task is to be carried out, under what conditions, and what resources are needed. Include guidelines about how well the candidate has to perform a task for it to be judged satisfactory.

ELEMENT

PERFORMANCE CRITERIA

Elements describe the essential outcomes.

Performance criteria describe the performance needed to demonstrate achievement of the element.

1. Monitor and collect information on risk factors

1.1 Identify product type so that nature of risk can be identified and handled accordingly

1.2 Identify, monitor and collect relevant information

2. Analyse data collected

2.1 Establish reliability and validity of data

2.2 Assess risk factors associated with product against known exposure factors

2.3 Analyse all information collected on risk factors for product using appropriate methods and documentation

2.4 Identify need for additional information to further evaluate risk

3. Determine risk rating for product

3.1 Determine acceptability of risk using all available information in accordance with organisational policy and procedures, and underwriting guidelines

3.2 Establish risk rating that minimises risk liability within delegated authority

3.3 Document basis for risk rating decision

3.4 Consider compliance with relevant legislation and organisational policy

3.5 Document risk rating information in format that may be used to guide underwriting and product or policy amendment decisions

4. Communicate results to appropriate personnel

4.1 Present results of research and analysis to appropriate personnel in a clear, concise format

4.2 Review risk rating recommendations against existing products and organisational policy

4.3 Finalise risk rating recommendations and notify relevant personnel

Evidence of the ability to:

collect, analyse and interpret information relevant for assessing risk

accurately determine acceptable risk rating for the organisation’s products

effectively document, communicate and monitor the risk ratings

comply with organisational policy, procedures, legislation, regulations and industry codes of practice

present research findings in a suitable format to enable assessment of liabilities.

Note: If a specific volume or frequency is not stated, then evidence must be provided at least once.

To complete the unit requirements safely and effectively, the individual must:

describe basic actuarial principles used to assess risk and return on investment

identify the key features of relevant legislation, regulatory guidelines and industry sector codes of practice

explain industry market position relative to product or line of business

outline organisational information technology systems required for determining risk

describe organisational policy, procedures, underwriting guidelines and authorities covering:

best underwriting guides (BUG)

loss control guides

identify and describe insurance and investment products and the risks associated with these products

define the difference between treaty and facultative reinsurance as it applies to risk

explain the relationship between underwriting and rate making

identify and apply relevant legislation, regulatory guidelines and industry sector compliance requirements as they apply to:

insurance contracts

privacy

consumer protection

financial services

corporations

describe risk analysis and prevention methods and their application

explain types of risk and identify the probability of occurrence.

Assessment must be conducted in a safe environment where evidence gathered demonstrates consistent performance of typical activities experienced in the insurance services field of work and include access to:

organisational records

organisational policy, procedures, legislation and regulations as they relate to contracts of insurance

a range of common technology and software.

Assessors must satisfy NVR/AQTF assessor requirements.

Copy and paste from the following performance criteria to create an observation checklist for each task. When you have finished writing your assessment tool every one of these must have been addressed, preferably several times in a variety of contexts. To ensure this occurs download the assessment matrix for the unit; enter each assessment task as a column header and place check marks against each performance criteria that task addresses.

Observation Checklist

Tasks to be observed according to workplace/college/TAFE policy and procedures, relevant legislation and Codes of Practice Yes No Comments/feedback
Identify product type so that nature of risk can be identified and handled accordingly 
Identify, monitor and collect relevant information 
Establish reliability and validity of data 
Assess risk factors associated with product against known exposure factors 
Analyse all information collected on risk factors for product using appropriate methods and documentation 
Identify need for additional information to further evaluate risk 
Determine acceptability of risk using all available information in accordance with organisational policy and procedures, and underwriting guidelines 
Establish risk rating that minimises risk liability within delegated authority 
Document basis for risk rating decision 
Consider compliance with relevant legislation and organisational policy 
Document risk rating information in format that may be used to guide underwriting and product or policy amendment decisions 
Present results of research and analysis to appropriate personnel in a clear, concise format 
Review risk rating recommendations against existing products and organisational policy 
Finalise risk rating recommendations and notify relevant personnel 

Forms

Assessment Cover Sheet

FNSISV505 - Determine risk rating for investment and insurance products
Assessment task 1: [title]

Student name:

Student ID:

I declare that the assessment tasks submitted for this unit are my own work.

Student signature:

Result: Competent Not yet competent

Feedback to student

 

 

 

 

 

 

 

 

Assessor name:

Signature:

Date:


Assessment Record Sheet

FNSISV505 - Determine risk rating for investment and insurance products

Student name:

Student ID:

Assessment task 1: [title] Result: Competent Not yet competent

(add lines for each task)

Feedback to student:

 

 

 

 

 

 

 

 

Overall assessment result: Competent Not yet competent

Assessor name:

Signature:

Date:

Student signature:

Date: