FNSIBK502B - Provide general advice in life insurance broking products and services

FNSIBK502B
Provide general advice in life insurance broking products and services

This unit describes the performance outcomes, skills and knowledge required to advise retail and/or wholesale consumers in life insurance broking products and services.This unit is applicable to individuals working within insurance broking enterprises and in broking adviser roles subject to licensing regulation by the Australian Securities and Investments Commission (ASIC). This unit covers the functions undertaken by an insurance broker providing general advice in life insurance.Conditions relating to ASIC training requirements and accreditation should be obtained from ASIC.

Application

For those brokers seeking to meet ASIC training standards:

General advice is defined by ASIC in its regulatory guide relating to the conduct and training of financial service product advisers. This unit requires the application of skills and knowledge to identify where the consumer is seeking general rather than personal product advice and to follow the appropriate steps to provide this level of advice. It also requires clarification of the broker’s role in providing this service.

Life insurance products may be complex and the choices a client makes may have an increased potential to impact significantly the client’s financial situation. Consumers place a greater reliance on a broker’s competence for advice on these products and as such broker training at the Tier 1 level is required.

There is a substantial component of generic, core, specialist general insurance and specialist insurance broking knowledge that must be developed by the adviser as part of this unit in order to meet the ASIC training standards for Tier 1 general advice.

This unit applies to insurance broking roles and may be applied within organisations of various sizes and across a range of customer bases.

Prerequisites

Not applicable.

Elements and Performance Criteria

1. Deal with initial client enquiry for life insurance

1.1 Consumer enquiries are attended to in a timely and courteous manner

1.2 A range of communication and interpersonal skills are used to clarify the life insurance products and broking services the client is requesting to be provided

1.3 Active listening skills are demonstrated in dealing with consumer enquiries and help and assistance is provided to ensure the full and accurate completion of initial documentation where required

1.4 The role of the broker and licensee/principal responsible for the adviser’s conduct is explained to the client

1.5 The range of products of interest to the consumer are analysed to determine their categorisation as areas of general advice in line with legislation and organisational policies

1.6 Consumers are informed that general advice will be provided to them in relation to the products of interest and that only personal information for underwriting and calculating the cost of the product will be sought

1.7 An explanation of the relevant fees and charging methodology is provided

1.8 The consumer is referred to appropriate specialist personnel within the brokerage where required advice is deemed to fall outside the category of general advice

2. Prepare general advice to client

2.1 The correct disclosure documentation is provided in accordance with legislation and organisational policy

2.2 A general advice warning is given to the consumer in line with legislative and organisation policy

2.3 Special communication needs of clients or consumers are considered in delivering general advice warning

3. Provide general advice

3.1 The product advice is given to the consumer in a clear and unambiguous way avoiding jargon and in a language appropriate to the receiver and using organisational tools

3.2 Product and industry knowledge appropriate for advice offered is demonstrated when providing advice to the client

3.3 Product advice is explained and discussed with the client in language that avoids giving the impression the adviser has considered the consumer’s personal circumstances in providing the advice

3.4 Client is requested to consider the appropriateness of the advice in the light of their own circumstances

3.5 Client is advised to read the product disclosure statement before making a decision

Required Skills

Required skills

well-developed communication skills to:

determine and confirm information, using questioning and active listening techniques

liaise with others, share information, listen and understand

interpersonal communication including techniques to gather information and explain products in language that avoids unnecessary industry specific jargon

use language and concepts appropriate to cultural differences

numeracy and IT skills to:

perform calculations related to achieving required outcomes

use computer applications (word processing, spreadsheet, database, specific purpose computer systems) to assist in achieving required outcomes

use appropriate IT to obtain product information

use IT calculators to determine insurance premiums

access and update records electronically

access web-based information services

well-developed literacy skills to read and interpret documentation from a variety of sources and record and consolidate relevant related information

research and analysis skills for accessing and interpreting relevant information

interpersonal skills

organisational skills, including the ability to plan and sequence work.

Required knowledge

core insurance knowledge:

characteristics and participants of the Australian insurance market

types of life insurance products, conditions, inclusions and exclusions, levels of coverage and pricing

advisory functions:

the role of the broker/representative/adviser

participants in the advisory services market

range of services provided

appropriateness of a risk assessment

Legal environment - disclosure and compliance:

the role of the broker/representative/adviser

relevant legal principles (e.g. Corporations Act, Financial Services Reform Act (FSRA), Trade Practices Act)

the relationship between ethics and regulatory requirements (e.g. good faith, utmost good faith)

full disclosure of remuneration/fees and any other conflicts of interest which may influence the adviser’s recommendation

insurance brokers industry code of practice and organisational codes of conduct

complaints resolution procedures (internal and external)

ASIC guidelines on adviser conduct and training

specialist knowledge of insurance broking products and services provided:

types of life insurance products/policies

standard cover (and deviations)

policy wordings

taxes and charges

insurance claims

premium rating/risk selection

reporting

product development

underwriting

binder products

legislative and organisational compliance requirements in relation to advice

relevant legislation and ASIC advisory guides relating to the provision of general and personal advice

the role of different advisers within the brokerage

brokerage policy and guidelines related to the provision of general advice

details of relevant marketing and disclosure documents, including product disclosure statements and marketing brochures on the relevant products.

Evidence Required

The evidence guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.

Overview of assessment
Critical aspects for assessment and evidence required to demonstrate competency in this unit	Evidence of the ability to: apply broking advisory procedures to provide appropriate general advice in general insurance broking products and services.
Context of and specific resources for assessment	Assessment must ensure: competency is demonstrated in the context of the work environment and conditions specified in the range statement either in a relevant workplace or a closely simulated work environment access to and the use of a range of common office equipment, technology, software and consumables access to organisation records access to organisational policies and procedures.
Method of assessment	A range of assessment methods should be used to assess practical skills and knowledge. The following examples, in combination, are appropriate for this unit: evaluating an integrated activity, which combines the elements of competency for the unit, or a cluster of related units of competency observing processes and procedures in workplaces verbal or written questioning on underpinning knowledge and skills evaluating samples of work accessing and validating third party reports setting and reviewing workplace projects and business simulations or scenarios.
Guidance information for assessment

Range Statement

The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.

Consumer enquiries may include:	computer and manual application forms electronic communication face-to-face enquiries telephone enquiries written communication.
Legislation and organisational policies may include:	ASIC act and its regulatory guides brokerage guidelines, operating and policy manuals Insurance Brokers Code of Practice.
Disclosure documentation may include:	financial services guide product disclosure statement.
A general advice warning:	has a specific definition under the Financial Services Reform Act.
Special communication needs include:	people with a disability or from different cultural backgrounds.
Organisational tools may include:	brochures computer prompts and systems financial services guides telephone or face-to-face scripts.
Product and industry knowledgemay include:	insurance policy terms and conditions.

Sectors

Insurance broking

Employability Skills

This unit contains employability skills.

Licensing Information

Not applicable.