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

ELEMENT

PERFORMANCE CRITERIA

1. Determine terms and conditions of risk acceptability

1.1. Risk acceptance information is collected including determining the terms and conditions of risk acceptance, evaluating the response of the customer, negotiating and finalising the cover is identified and reviewed

1.2. Risk acceptability is determined within authority limitations and capacities

1.3. Terms and conditions of risk acceptance are determined in accordance with risk acceptance criteria

1.4. Referrals are determined, where appropriate

1.5. Facultative reinsurance is placed, where appropriate

2. Communicate result of risk assessment

2.1. Quotation, if required, is prepared and communicated

2.2. Terms and conditions of risk acceptance, including expiry date of offer and pricing, are advised to client within appropriate timeframes

2.3. Rejection of risk, if applicable, is advised as soon as it is evident that the risk falls outside the guidelines or as soon as a decision is made not to underwrite the risk

3. Evaluate client response

3.1. Client response is assessed to determine whether action to modify terms and conditions is required

3.2. Offer is modified as necessary and advice to client is prepared according to operating procedures

3.3. Modified offer complies with underwriting acceptance authorities and criteria, or an appropriate referral approval is sought

4. Negotiate agreement

4.1. Negotiation is undertaken on revised offer to reach mutually satisfactory agreement, including charge to reinsurance where applicable

4.2. The client is advised of acceptance or rejection of the risk according to operating procedures

4.3. If conditions are placed on the acceptance of risk, a mechanism is established for checking that the conditions have been met

5. Issue interim cover where required

5.1. Disclosure requirements are adhered to in all cases

5.2. Initial documentation is issued to the client in organisation format and according to operating procedures

5.3. Reinsurance cover is confirmed, as appropriate

5.4. Additional information is obtained, as required

5.5. Documents are filed and stored in accordance with organisation operating procedures

5.6. Expiry of interim cover is monitored following standard operating procedures, to ensure that any required terms are met prior to issue of policy

Required skills

well-developed communication skills to:

determine and confirm information, using questioning and active listening as required

relate effectively to customers

liaise with others, share information, listen and understand

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

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

self-management skills for complying with ethical, legal and procedural requirements research and analysis skills for accessing and interpreting relevant information

organisational skills, including the ability to plan and sequence work

Required knowledge

e-commerce processes

industry market position relative to product/line of business

industry sector compliance requirements such as the General Insurance Code of Practice

organisation or industry sector policy wording

organisation policy, procedures, underwriting guidelines and authorities (e.g. best underwriting guides (BUG) and loss control guides)

organisation products

reinsurance, treaty and facultative

relative industry hazards

relevant legislation, regulatory guidelines and industry sector compliance requirements, such as:

Insurance Contracts Act

Privacy Act

Trade Practices

Corporations Act

risk prevention methods and application

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:

interpret and comply with all legal obligations and organisation procedures in order to identify and thoroughly assess risks, and develop a suitable policy

apply sound understanding of relevant organisation products and services

correctly interpret and apply underwriting guidelines and procedures

identify and investigate risk as it relates to new business in accordance with underwriting and organisation guidelines

complete and file documentation in accordance with organisation guidelines.

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 organisation 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.

Guidance information for assessment

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.

Risk acceptance information may include:

amendments

assessor reports

broker slips

claims

for NZ: the New Zealand Claims Register

general knowledge

legal cases

pre-underwriting report

previous insurers

proposals

publications (industry associations and trade journals)

stock exchange

surveys

telephone contacts.

Terms and conditions of risk acceptance may include:

additional exclusions

adequate reinsurance cover

endorsements

excesses/deductibles

extensions

insurance history

internal and industry statistics

pricing

quality of risk

risk factors

risk improvement requirements

sub-limits

variations in policy wording.

Risk acceptance criteria may include:

class of business

driving and/or accident history

insurance history

locality

minimum security levels.

The client may be:

represented by an insurance broker or agent (letters of appointment will be necessary if there has been a change of agent or broker).

Rejection of risk refers to:

advising a client or broker/agent of non-acceptance of risk.

Disclosure requirements may be met:

in a variety of ways according to the way the business is written (e.g. proposal, telephone, facsimile, e-commerce).

Initial documentation includes:

any interim cover

revised document (endorsement or new business certificate).

Unit sector

Insurance services

This unit contains employability skills.