Application
This unit describes the skills and knowledge required to evaluate risk for new business, including gathering the risk information, and reviewing and assessing it against appropriate risk criteria.
It applies to individuals performing underwriting roles in a range of insurance sectors in 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.
Elements and Performance Criteria
ELEMENT | PERFORMANCE CRITERIA |
Elements describe the essential outcomes. | Performance criteria describe the performance needed to demonstrate achievement of the element. |
1. Identify and obtain risk information | 1.1 Identify, record and gather all sources of risk information and rectify deficiencies 1.2 Review information to determine its relevance and reliability, and the integrity of its source 1.3 Format data for easy access 1.4 Adhere to legislative and compliance requirements in all cases |
2. Assess information against established risk acceptance criteria | 2.1 Assess all relevant risk information to determine if it is comprehensive and pertinent to nature of the risk 2.2 Review and commission surveys and/or reports, if applicable to risk 2.3 Interpret data on risk exposure from survey report 2.4 Compare risk information against risk acceptance criteria and organisational capacity to assess and accept risk according to terms and conditions of risk assessment 2.5 Liaise with other internal departments to assess impact on business, if applicable 2.6 Review and compare proposed amendments to organisational wording and compare to acceptance criteria 2.7 Document risk assessment data according to organisational policy and procedures |
3. Issue quotation | 3.1 Prepare quote based on all risk assessment data 3.2 Communicate information regarding quote to relevant personnel if required |
Evidence of Performance
Evidence of the ability to:
interpret and comply with all relevant legal obligations and organisational procedures
identify and thoroughly assess risks to develop a suitable insurance quote for a new business
prepare a quote accurately, applying relevant underwriting guidelines
identify and investigate risk as it relates to new business in accordance with underwriting and organisational guidelines
accurately document risk assessment data in accordance with organisational guidelines
identify and apply risk acceptance criteria for insurance products.
Note: If a specific volume or frequency is not stated, then evidence must be provided at least once.
Evidence of Knowledge
To complete the unit requirements safely and effectively, the individual must:
describe key features of relevant legislative requirements and industry regulations in the context of insurance risk
describe the potential market share for the product or line of business
explain the importance of wording of insurance policies in line with industry norms
identify key features of organisational policy, procedures, underwriting guidelines and authorities
describe insurance risks associated with organisational products
define the difference between treaty and facultative reinsurance
outline relative industry hazards associated with insurance products
explain the application of relevant common law, legal systems and procedures relating to:
insurance contracts
insurance agents and brokers
competition and consumer practices
describe ‘interim cover’ as it relates to expiry and cancellations of contracts
describe risk prevention methods and application.
Assessment Conditions
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 insurance risk
a range of common technology and software.
Assessors must satisfy NVR/AQTF assessor requirements.
Foundation Skills
This section describes language, literacy, numeracy and employment skills incorporated in the performance criteria that are required for competent performance.
Skill | Performance Criteria | Description |
Reading | 1.1, 1.2, 2.1, 2.2, 2.3, 2.4, 2.6 | Analyses complex documentation from a variety of sources and consolidates information relating to specific criteria to determine requirements |
Writing | 1.1, 1.3, 2.2, 2.5, 2.7, 3.1, 3.2 | Accurately records and completes organisational documents and correspondence using clear language and correct spelling, grammar and terminology |
Oral Communication | 2.5, 3.1, 3.2 | Participates in verbal exchanges to gather or share information using questioning and listening techniques to ascertain other opinions |
Numeracy | 1.2, 2.2, 2.3, 2.4, 3.1 | Performs mathematical calculations to analyse financial data and statistics to accurately evaluate risk |
Navigate the world of work | 1.4, 2.4, 2.6, 2.7 | Takes personal responsibility for following explicit and implicit policies, procedures and legislative requirements Identifies and acts on issues that contravene relevant policies, procedures and legal requirements |
Interact with others | 2.5, 3.1 | Selects and uses appropriate conventions and protocols when communicating with clients and co-workers in a range of work contexts |
Get the work done | 1.1, 1.3, 2.2, 2.3, 2.4, 2.6 | Takes responsibility for planning, sequencing and prioritising tasks and own workload for efficiency and effective outcomes Makes routine decisions and implements standard procedures for routine tasks, using formal decision-making processes for more complex and non-routine situations Uses digital technologies to access, enter and store information required to complete work tasks |
Sectors
Insurance services