Application
This unit describes the skills and knowledge required to analyse and advise on general life insurance needs in line with current Australian Securities and Investments Commission (ASIC) regulation (Financial Services Reform Act) in the insurance specialist and generic knowledge areas.
The unit applies to those who apply specialist product knowledge and well-developed interpersonal and communication skills in the provision of general advice in life insurance.
Work functions in the occupational areas where this unit may be used are subject to regulatory requirements. Users are advised to check with the relevant regulatory authorities to confirm those 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. Establish relationship with client and identify objectives, financial situation | 1.1 Establish client’s knowledge level, objectives, financial and business details 1.2 Identify client’s expectations of cash flow and relevant taxation obligations 1.3 Explain range of products and services available according to client objectives and financial situation 1.4 Outline fees associated with applicable products and services and explain charging methodology 1.5 Inform client of role of adviser and licensee or principal responsible for adviser’s conduct 1.6 Inform client of complaints-handling procedures |
2. Analyse client’s objectives, needs, financial situation and risk profile | 2.1 Assess client needs using information gathered and taking into account client’s product or service expectations and specific needs 2.2 Consult client throughout analysis and seek further clarification where necessary 2.3 Analyse need for specialist advice and refer client to appropriate adviser for higher level or specialist advice as required 2.4 Assess and agree on product risk profile of client 2.5 Apply ASIC generic and specialist knowledge applicable to products or services being offered |
3. Develop and present strategies and solutions appropriate to client | 3.1 Determine appropriate strategy to provide for identified needs and outcomes 3.2 Complete required research, analysis and product modelling according to organisational policies and procedures 3.3 Draft product or service solution for presentation to client that meets client needs and outcomes according to organisational policies and procedures 3.4 Explain and discuss proposed products or services with client according to organisational policies and procedures, legislative and regulatory requirements 3.5 Explain required details, terms and conditions of products or services to client and confirm client understanding 3.6 Disclose impacts and possible risks of products or services to client and confirm client understanding 3.7 Provide client with written supporting documentation following organisational procedures, and guide client through key aspects of documentation 3.8 Discuss and clarify any concerns and issues client has regarding proposed products or services 3.9 Seek client’s preferred products or services and confirm client’s preference |
4. Coordinate implementation of agreed products or services | 4.1 Seek formal agreement from client for proposed plan, policy or transaction 4.2 Explain associated fee and cost structures, and confirm client understands all details 4.3 Explain timeframes for execution and processing to client and confirm client understanding 4.4 Confirm that proposal and other documents are completed and signed off by client as required 4.5 Confirm that signed agreement and copies of appropriate documentation are exchanged |
5. Provide arrangements for ongoing service, where requested by client | 5.1 Confirm that type and form of ongoing service, including review of products or services, is agreed with client 5.2 Explain and confirm fees and costs for ongoing and specifically defined service, and confirm client understands all details 5.3 Implement procedures for agreed ongoing service according to organisational policies and procedures |
Evidence of Performance
The candidate must demonstrate the ability to complete the tasks outlined in the elements, performance criteria and foundation skills of this unit, including evidence of the ability to:
provide general advice in life insurance to at least two different clients.
In the course of the above, the candidate must:
identify and analyse each client’s objectives, needs and financial details
comply with industry-specific legislative and regulatory requirements for life insurance
advise clients accurately and ethically about specific life insurance products and services, and relevant tax implications
demonstrate knowledge of product or service offered
match product or service to client needs
finalise product or service offering, ensuring required documentation is completed accurately following organisational procedures.
Evidence of Knowledge
The candidate must be able to demonstrate knowledge to complete the tasks outlined in the elements, performance criteria and foundation skills of this unit, including knowledge of:
General knowledge
overview of current economic environment, including:
characteristics and impact of economic and business cycles
interest rates and exchange rates
inflation
government monetary and fiscal policy
operations of financial markets, including:
roles played by intermediaries and issuers
structure and interrelationships within the financial markets
interrelationship between industry sectors
financial products, including:
concept of a financial product – general definition, and specific inclusions and exclusions
types of financial investment products
types of financial risk products
Core insurance knowledge
operation of insurance markets, including:
definition of insurance product
characteristics of and participants in the Australian insurance market
roles played by intermediaries
types of insurance products, including risk insurance products, investment life insurance products and general insurance products
aspects of insurance products, including:
conditions, exclusions and levels of coverage of risk transfer products
organisational standards for documentation
pricing
fee structures and charging methodologies
taxation issues in relation to insurance products and markets
advisory functions for life insurance, including:
role of insurance adviser, broker and agent
participants in the insurance advisory services market
range of services provided
profile and financial information of the client
appropriateness of a risk assessment
ethical considerations relevant to advisory functions
key legal environment factors, including disclosure and compliance covering:
role of representative and adviser
legal principles relating to key Acts relevant to performance evidence
relationship between ethics and regulatory requirements, including good faith, faith, utmost good faith, full disclosure of remuneration and fees, and any other conflicts of interest that may influence adviser’s recommendation
relevant industry standards and codes of conduct
regulators’ guidelines relevant to the provision of general or wholesale advice in life insurance
resolution procedures for internal and external complaints
Specialist knowledge
key aspects of life insurance, including:
types and classes of life insurance products and policies
standard cover and relevant deviations
product development
policy wordings
underwriting
insurance claims
premium rating and risk assessment
investment strategy in relation to investment components of life insurance products.
Assessment Conditions
Skills in this unit must be demonstrated in a workplace or simulated environment where the conditions are typical of those in a working environment in this industry.
This includes access to:
office equipment, technology, software and consumables used to provide general advice in life insurance
clients requiring general advice in life insurance
organisational records
organisational policies and procedures.
Assessors of this unit must satisfy the requirements for assessors in applicable vocational education and training legislation, frameworks and/or standards.
Foundation Skills
This section describes those language, literacy, numeracy and employment skills that are essential to performance but not explicit in the performance criteria.
SKILL | DESCRIPTION |
Numeracy | Interprets financial product or service information and completes calculations to achieve required outcomes |
Oral communication | Clearly articulates requirements using language appropriate to audience and environment Elicits information and confirms understanding using active listening and questioning techniques |
Reading | Identifies and interprets information from applicable sources |
Writing | Records and consolidates workplace documentation using clear, specific and industry-related terminology |
Self-management | Develops and maintains knowledge of products and of the required regulatory frameworks that define their use |
Technology | Completes work tasks using the main features and functions of digital tools |
Sectors
ASIC