Application
This unit describes the skills and knowledge required to conduct underwriting of new business, including determining the terms and conditions, risk acceptance, evaluating the response of the client, negotiating and finalising the cover.
It applies to individuals 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.
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. Determine terms and conditions of risk acceptability | 1.1 Collect risk acceptance information and determine terms and conditions of acceptance 1.2 Determine risk acceptability within authority limitations and capacities 1.3 Determine terms and conditions of risk acceptance in accordance with risk acceptance criteria 1.4 Determine referrals, where appropriate 1.5 Place facultative reinsurance, where appropriate |
2. Communicate result of risk assessment | 2.1 Prepare and communicate quotation, if required 2.2 Advise client of terms and conditions of risk acceptance, including expiry date of offer and pricing, within appropriate timeframes 2.3 Advise rejection of risk, if applicable, as soon as it is evident that risk falls outside guidelines or as soon as decision is made not to underwrite risk |
3. Evaluate client response | 3.1 Assess client response to determine whether action to modify terms and conditions is required 3.2 Modify offer as necessary and prepare advice to client according to operating procedures 3.3 Ensure modified offer complies with underwriting acceptance authorities and criteria, or seek appropriate referral approval |
4. Negotiate agreement | 4.1 Undertake negotiation on revised offer to reach mutually satisfactory agreement, including change to reinsurance where applicable 4.2 Advise client of acceptance or rejection of risk according to operating procedures 4.3 Establish mechanism to check that conditions have been met, if conditions have been placed on acceptance of risk |
5. Issue interim cover where required | 5.1 Specify disclosure requirements in all cases 5.2 Issue initial documentation to client in organisation’s format and according to operating procedures 5.3 Confirm reinsurance cover, as appropriate 5.4 Obtain additional information, as required 5.5 File and store documents in accordance with organisational operating procedures 5.6 Monitor expiry of interim cover following standard operating procedures, to ensure any required terms are met prior to issue of policy |
Evidence of Performance
Evidence of the ability to:
thoroughly assess risks and develop a suitable insurance policy
accurately interpret and comply with all legal obligations and organisational procedures
comply with underwriting guidelines and procedures
investigate risk as it relates to new business and products
complete and file documentation in accordance with organisational guidelines.
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:
identify and describe key features of appropriate e-commerce processes
describe the potential market share for a product or line of business
outline the compliance requirements for insurance policies
explain the importance of wording of insurance policies in keeping with the organisation or industry sector
identify the organisational policy, procedures, guidelines and level of authorities for underwriting (such as best underwriting guides (BUGs) and loss control guides)
describe underwriting principles for insurance products
define the difference between treaty and facultative reinsurance
outline relative industry hazards
identify and apply relevant legislation, regulatory guidelines and industry sector compliance requirements
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 contracts of insurance
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 1.3, 1.4, | Critically analyses complex documentation from a variety of sources and consolidates information relating to specific criteria to determine requirements |
Writing | 1.1, 2.1-2.3, 3.2, 4.1, 4.2, 5.2, 5.3, 5.4 | Accurately records and completes organisational documents and correspondence using clear language and correct spelling, grammar and terminology Writes, edits and proofreads documents to ensure clarity of meaning, and accuracy and consistency of information |
Oral Communication | 2.1-2.3, 3.1, 3.3, 4.1, 4.2 | Interacts effectively in verbal exchanges, using active listening and questioning to convey and clarify information Clearly explains detailed information using language, tone and pace appropriate to audience |
Numeracy | 1.1, 1.2, 1.5, 2.1, 2.2, 2.3, 3.2, 4.1 | Performs mathematical calculations to analyse financial data and statistics to accurately process insurance cover |
Navigate the world of work | 1.2, 1.3, 1.4, 2.3, 3.2, 3.3, 4.2, 5.1, 5.2, 5.5, 5.6 | Accepts responsibility and ownership for the task and makes decisions on completion parameters and the need to coordinate with others Takes personal responsibility for following explicit and implicit policies, procedures and legislative requirements |
Interact with others | 1.4, 2.1, 2.2, 2.3, 3.1-3.3, 4.1, 4.2, 5.2, 5.3 | Selects and uses appropriate conventions and protocols when communicating with clients and co-workers in a range of work contexts Recognises and accommodates basic differences and priorities of others Recognises behaviours and triggers that contribute to conflict and implements strategies to reduce issues during negotiations |
Get the work done | 1.1-1.5, 2.1-2.3, 3.2, 3.3, 4.3, 5.3-5.6 | Takes responsibility for planning, sequencing and prioritising tasks and own workload for efficiency and effective outcomes Accepts responsibility for addressing less predictable problems and initiates standard procedures in response, applying problem-solving processes to determine solutions Uses digital technologies to access, enter and store information required to complete work tasks |
Sectors
Insurance services