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 identified and reviewed

1.2. Risk acceptability is determined within authority limitations

1.3. Terms and conditions of risk acceptability are checked for changes since the last time it was reviewed for underwriting

1.4. Terms and conditions of risk acceptance are determined in accordance with risk acceptance criteria, including client history

1.5. If appropriate, alternative terms or adjusted benefits are proposed

2. Communicate result of risk assessment

2.1. Offer of renewal, if applicable, is made in accordance with legislative requirements

2.2. Provisional notice of expiry is issued to customer

2.3. Renewal is declined, if applicable, in accordance with legislative provisions

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. 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

4.2. The client is advised of acceptance or rejection of the risk according to operating procedures (including information on dispute resolution procedure if necessary)

5. Cancel/lapse or renew cover

5.1. Revised documentation is issued to client in organisation format and according to organisation operating procedures and legislative requirements

5.2. Reinsurance cover is confirmed as appropriate

5.3. Lapse notice is issued to client, if applicable, in accordance with organisation procedures

5.4. Documentation is filed and stored according to operating procedures

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

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 processes

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 suitable products

maintain and 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 renewal business in accordance with underwriting and organisation guidelines

complete and file relevant 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 be sourced from:

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 acceptability may include:

claims history

endorsements

excesses/deductibles

internal and industry statistics

pricing

quality of risk

reinsurance cover

risk factors

risk improvement requirements

variations in policy wording.

Client history may include:

financial results

insurance history

number of type of policies

time insured.

Declining renewal means:

advising client/broker/adviser of non-acceptance of risk and rationale for decision.

Revised documentation includes:

endorsement or renewal certificate.

Legislative requirements refers to:

all activities covered in this unit to be undertaken in line with the relevant current:

legislation

regulations

organisation operating procedures and

codes of practice, where applicable.

Unit sector

Insurance services

This unit contains employability skills.