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This training guide as been developed by the Author, as resource material for training purposes only in association with Orion Training and Performance Management. The Author gives permission to the users to make copies for use in the immediate training environment but may not be reproduced for any other purpose. While every care has been taken in the production of these notes it should be remembered that insurance industry guidelines, codes, laws and acts associated with this industry do change. The Author does not give warranty nor accept any liability in relation to the content of this work. Version 1.02 November 2005
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© Tupcorp Training and Consultancy
Version 1.02 November 2005
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Orion Training and Performance Management Pty Ltd Training Plan
Student name: ______________________________________ Employer name: _____________________________
Phone number:___________________________ Address:__________________________________________________ Trainer: __________________________________ Email:____________________________________________________
ASIC Tier 1 Short Course
To attain a Statement of attainment for ASIC Tier 1 compliance the following units must be achieved: The ASIC Tier 1 compliance unit(s) from the list below appropriate to area(s) of specialisation, plus underpinning knowledge and skills as outlined in the training package guidelines plus any related pre-requisites as outlined below. Unit Code Indicative Hrs Unit Name Please tick units selected for this training plan
Provide advice in Managed Investments
Prerequisites for FNSASIC503TA: FNSICCUS506A FNSICADV502A FNSICPRO502A FNSICCUS507A 60 70 80 70 Determine client requirements and expectations Provide appropriate and timely information and advice to clients Conduct research to support recommendations Record and implement client instructions
Provide advice in Superannuation
Prerequisites for FNSASIC503UA: FNSICCUS506A FNSICADV502A FNSICPRO502A FNSICCUS507A 60 70 80 70 Determine client requirements and expectations Provide appropriate and timely information and advice to clients Conduct research to support recommendations Record and implement client instructions
Provide advice in Derivatives
Prerequisites for FNSASIC503VA: FNSICCUS506A FNSICCUS507A FNSFMKT502A FNSFMKT503A 60 70 60 50 Determine client requirements and expectations Record and implement client instructions Analyse financial market products for client Advise clients on financial risks
Provide advice in Securities Determine client requirements and expectations Record and implement client instructions Analyse financial market products for client Advise clients on financial risks
Version 1.02 November 2005
Prerequisites for FNSASIC503WA: FNSICCUS506A FNSICCUS507A FNSFMKT502A FNSFMKT503A 60 70 60 50
regulations and codes of practice Conduct research to support recommendations Record and implement client instructions FNSASIC503YA 50 Provide advice in Insurance Broking Prepare a new business submission for a broking client Monitor client requirements Implement changes to broking client’s insurance program Review insurance brokerage service performance Collect. advice and products to clients Comply with financial services legislation. operational guidelines and regulations Conduct financial planning analysis and research Develop and prepare financial plan Implement financial plan Review financial plan and provide ongoing service Target Groups This course is designed to suit those wishing to enter an organisation or who currently work in an organisation where ASIC Tier 1 compliance is vital to their daily operations.02 November 2005 . Version 1. Language. These needs are documented in an Enterprise Profile. Further information regarding the ongoing relevance and adequacy of the program comes from the Enterprise Profiles discussed in the following section on ‘Identification of Organisation & Learner needs’. advisory and customer service skills to the provision of advice to clients in a specific Financial Services Industry area. Literacy & Numeracy Indicator and through further consultation between the learner and the Trainer from Orion. assess and use information Produce research reports and make presentations Respond to customer enquiries Prerequisites for FNSASIC503YA: FNSINBK501A FNSINBK502A FNSINBK503A FNSINBK603A FNSICGEN403A FNSICGEN501A FNSICCUS301A 60 60 60 60 10 40 25 FNSASIC503ZA 50 Provide advice in Financial Planning Prerequisites for FNSASIC503ZA: FNSFPLN501A FNSFPLN502A FNSFPLN503A FNSFPLN504A FNSFPLN505A 50 50 60 50 60 Comply with financial planning practice ethical. needs analysis. Identification of Organisation & Learner needs Orion will consult with each organisation’s high level management in order to determine their needs and thus the needs of the learner. A range of organisations were consulted to ensure that the learning and assessment strategy for the ASIC Tier 1 short Course will meet their organisation’s training and development requirements. It relates to those involved in the application of interpersonal.4 of 74 FNSASIC503XA 50 Provide advice in Life Insurance Prerequisites for FNSASIC503XA: FNSICADV501A FNSCOMP501A FNSICPRO502A FNSICCUS507A 150 80 80 70 Provide appropriate services. Specific individual Learner needs will be determined using Orion’s Qualification Pre-assessment Form.
A typical Assessment Centre involves the participants undertaking a series of simulated work activities. work examples. students may arrange for observation and recognition of workplace performance through employer testimonials or work appraisals or through assessor observation. This pathway requires the student to demonstrate current competence or provide evidence of prior learning. This is frequently preferred by those who have limited previous exposure to education and training or who prefer (often due to LL&N or time constraints) to demonstrate rather than document skills and knowledge. letters etc. This technique is particularly useful for those participants with existing skills who are located in regional areas where they may have limited opportunity for face-to-face contact with trainers and assessors. students who require further training and assessment will undertake the Work-based Training and Assessment pathway. Therefore. technologies and systems.5 of 74 Customisation Orion seeks to form a partnership with each organisation. Assessment Centre – Students who may not be currently employed or who may wish to undertake a more comprehensive assessment than is possible in the workplace may participate in an Assessment Centre. 2. All workbased training and assessment combines face to face or computer-based training with self-paced activities to reinforce learning. Evidence is verified by the through a verbal questioning process via a face-to-face or telephone interview. RPL All students are offered the option of RPL through all or part of the qualification. Further customisation will occur in accordance with Orion’s Customisation Method Policy pp032 Qualification Delivery Options Students may choose one or a combination of the following two options to achieve this qualification. including prior completion of units of competency included in the qualification for which Credit Transfer can be granted. This technique is particularly valuable for students who are in career transition or at risk of redundancy as it provides the opportunity to Version 1. Delivery and Assessment Arrangements 1. in consultation with Orion and their employer. or participation in the RPL option. Alternatively. Their performance is viewed by a number of observers who assess their behaviour and skills against key competencies. This technique allows students to collect direct evidence where no other documentation is available or to provide further evidence to support other hard copy documentation. Step 3 – Support materials are issued to the student Step 4 – Assessment takes place in accordance with the mode selected Step 5 – Orion provides feedback to the student regarding outcomes and if necessary provides details of opportunities for further assessment or gap training Step 6 . Portfolio – Students wishing to apply for RPL in a portfolio mode are issued with the document ‘How to apply for Recognition of Prior Learning (RPL)’ .02 November 2005 .The results of the assessment are recorded and a Statement of Attainment or Qualification issued Delivery modes: The RPL option for this qualification can be undertaken in one or a combination of the following modes. Students are supported throughout the process by Orion staff. The process is as follows: Step 1 – Student completes an enrolment form and submits it to Orion Step 2 – An Orion staff member contacts the student to determine which mode of delivery will be most suitable for their needs. Students. 1. the customisation of Learning and Assessment Strategy will occur prior to delivery of training and will incorporate the organisation’s specific products. will be advised on the range of electives they can choose that will meet both learning needs and the organisation’s strategies. This pathway involves students completing work related training and assessment activities through one of the modes outlined in the following section. Recognition of Prior Learning (RPL) Students who consider that they are already competent in one or more of the Units of Competence in this qualification have the right to have that competency recognised without participating in a learning process. Work-based Training and Assessment Following the offer of. Students may compile evidence in the form of copies of certificates.
Learner guides for individual units of competency containing guidelines for collecting evidence for a portfolio can also be provided to students where appropriate. such as a Computer (PC) and software packages. Students will be allocated a certain amount of time in between trainer visits to complete each of the practical activities. Anticipated assessment dates will also be scheduled prior to the commencement of training. related to workplace learning outcomes (this will vary from organisation to organisation depending on the operations) Access to related industry Legislation and Acts is also required (details for accessing listed on Marking Record Version 1. Each student is assigned an assessor who will be available to support them through the entire process and address any special needs. Students will need access to facilities in the workplace. Facilities and Equipment: For each unit of competency. Assessment Centre: A pre-assessment kit will be provided to all applicants outlining the assessment centre process and any documentation they will need to bring with them to the assessment day All other materials required will be issued on the day of assessment according to the competencies being assessed. 2. a Trainer from Orion (specialising in Financial Services) consults with both the student and their employer to discuss the desired workplace outcomes. Resources: Portfolio: The document ‘How to apply for Recognition of Prior Learning (RPL)’ provides an easy to follow step-by-step guide for the application process and includes examples of the types of evidence to be collected. Also included in the Marking Record Book are suggestions of types of evidence specific to that unit that can be collected. Resources. but will remain flexible according to the student’s progress. Step 3 – A Training Plan is drawn up in consultation with the student. their supervisor and the Trainer. Electives are chosen according to: o the student’s interests o organisational needs o workplace capacity o future career options o personal development and training needs Step 4 – Training and Assessment takes place in accordance with the training plan Step 5 – Feedback is provided to the student regarding outcomes and if necessary details of further assessment or training provided Step 6 . This delivery mode will include a combination of one-on-one trainer led theory sessions and self-paced practical activities to reinforce the student’s learning. Each student will also be provided with a Marking Record Book outlining the activities to be completed for assessment and a breakdown of the performance criteria to be met in order to be deemed competent. a Marking Record Book outlining performance criteria for each unit of competency is supplied to the student to guide them in collecting evidence.6 of 74 assess a broad range of skills and behaviours that may be applicable to other work settings outside those in which they usually participate.The results of the assessment are recorded and a Statement of Attainment or Qualification issued Delivery modes: This qualification is only delivered in an on-the-job mode. Once units of competency to be assessed have been selected. This time will depend on the student’s ability and workplace influences and will be scheduled prior to the commencement of training delivery.02 November 2005 . In addition. Work-based Training and Assessment Work-based Training and Assessment takes place via the following process: Step 1 – In order to assist the student in choosing the appropriate units of competency and delivery modes. the student should have access to a workplace mentor or supervisor who has the experience in the work relevant to the competencies and who can offer supervision and moderation to the learning. students are provided with a learner guide which contains information and activities relating to the unit. as well as the questions that will be used by the assessor to verify competency. Step 2 – The student’s learning needs and abilities are determined through discussion and using Orion’s Qualification Pre-assessment Form and LL&N Indicator.
employer and trainer will be signed off. Under no circumstances will the assessment be conducted in a way that does not require the student to demonstrate the skills outlined in the provided development and assessment guides. the organisation needs and the complexity of each unit of competency. Training Schedule: Version 1. The training and assessment activities may be repeated as necessary until the student has gained the skills. As such. Students will be given feedback whilst working through the relevant competencies to ensure that they have the greatest chance of success. The controlling factor in determining duration is not time spent in training but the readiness of the student to demonstrate the targeted competency dependant on the skills and knowledge already acquired.02 November 2005 . Duration: The actual duration for each trainee will be negotiated in the first training session and a Training Plan outlining the training schedule agreed upon by the student. learning style.7 of 74 Sheet for each unit of competency). ** NB where facilities and equipment are not available a simulated environment will be created using Orion’s facilities. the training plan will remain flexible according to the progress of the student. knowledge and experience essential for competence. Other features of work-based delivery modes: Students in the workplace will have real examples to work with and may get ideas to work on from colleagues and supervisors. Assessment of component goals will be clustered into a project wherever possible and the assessment conditions shall be consistent with the delivery methods chosen. Assessment of practical skills will occur after the completion of the student’s training activities. Trainers will be able to design or modify existing training and assessment tools so that the requirements of the individual and the assessment context are met. Confidence and experience will be developed by ensuring the students have the opportunity to integrate the skills learned through training into workplace practice by completing workplace based activities and projects.
02 November 2005 .8 of 74 Scheduled Date Induction visit Induction and Compilation of Training Plan To be covered at this visit: Discuss training/assessment requirements and procedures Select units of competency Review RPL possibilities Schedule training delivery ____ / ____ / ______ I declare that: the units of competency selected for this qualification have been agreed upon by all parties below options and arrangements for RPL. obligations and procedures has been received.L& N tool) Student signature: ___________________________________________________ Student name: ___________________________________________________ Date: ______________________ Supervisor signature: ________________________________________________ Supervisor name: ________________________________________________ Date: _____________________ Trainer signature: ____________________________________________________ Trainer name: ____________________________________________________ Date: ______________________ Trainer to return the following to Orion: □ Copy of signed Training Plan □ Completed Client & Student forms Units to be trained __________________ __________________ __________________ Delivery method __________________ __________________ __________________ Office signoff (initial & date) Scheduled Date Training Session Two ____ / ____ / ______ Units to be assessed __________________ __________________ __________________ ______________ ______________ ______________ Actual visit date: __________________________ Actual units trained at this visit: Duration of visit: ________________________________ Actual units assessed at this visit: Outcome of assessment RPL/CT C NYC Reasons for any variations to schedule: Version 1. Student learning needs have been assessed and the following outcome agreed upon (please tick): □ No additional support required □ additional learning support is required (details outlined on L. training and assessment (as outlined in this document) have been discussed this training schedule has been agreed upon by all parties below the training handbook which covers all requirements.
02 November 2005 . Date(s) of contact(s):__________________________________________ Method of contact: □ Email (submit copy to Orion) □ Phone call (please attach details of discussion) Units to be assessed __________________ __________________ __________________ Units to be trained __________________ __________________ __________________ Delivery method __________________ __________________ __________________ Office signoff (initial & date) Scheduled Date Training Session Three ____ / ____ / ______ ______________ ______________ ______________ Actual visit date: __________________________ Actual units trained at this visit: Duration of visit: ________________________________ Actual units assessed at this visit: Outcome of assessment RPL/CT C NYC Reasons for any variations to schedule: Version 1. Student signature: ______________________________________________________ Supervisor signature: ___________________________________________________ Trainer signature: _______________________________________________________ Trainer and/or supervisor comments (optional): Date: ___________________ Date: ___________________ Date: ___________________ Action required by Orion Administration: Trainer to return the following to Orion: □ Copy of this page Monitoring – the Trainer will contact the student between each visit to support the learning process.9 of 74 Student comments (must be completed each visit): I confirm that the above training and/or assessment took place today and (if applicable) agree with the variations made to the training schedule.
Date(s) of contact(s):__________________________________________ Method of contact: □ Email (submit copy to Orion) □ Phone call (please attach details of discussion) Units to be assessed __________________ __________________ __________________ Units to be trained __________________ __________________ __________________ Delivery method __________________ __________________ __________________ Office signoff (initial & date) Scheduled Date Training Session Four ____ / ____ / ______ ______________ ______________ ______________ Actual visit date: __________________________ Actual units trained at this visit: Duration of visit: ________________________________ Actual units assessed at this visit: Outcome of assessment RPL/CT C NYC Version 1.02 November 2005 .10 of 74 Student comments (must be completed each visit): I confirm that the above training and/or assessment took place today and (if applicable) agree with the variations made to the training schedule. Student signature: ______________________________________________________ Supervisor signature: ___________________________________________________ Trainer signature: _______________________________________________________ Trainer and/or supervisor comments (optional): Date: ___________________ Date: ___________________ Date: ___________________ Action required by Orion Administration: Trainer to return the following to Orion: □ Copy of this page Monitoring – the Trainer will contact the student between each visit to support the learning process.
02 November 2005 . Student signature: ______________________________________________________ Supervisor signature: ___________________________________________________ Trainer signature: _______________________________________________________ Trainer and/or supervisor comments (optional): Date: ___________________ Date: ___________________ Date: ___________________ Action required by Orion Administration: Trainer to return the following to Orion: activities/ □ Copy of this page □ Marking Record Sheets □ Assessment evidence Version 1.11 of 74 Reasons for any variations to schedule: Student comments (must be completed each visit): I confirm that the above training and/or assessment took place today and (if applicable) agree with the variations made to the training schedule.
Version 1. All staff (including full time. The RTO has reviewed the equipment and facility requirements for each unit of competency in the qualification and guarantees it has access to the plant and equipment needed to implement the program. A Questioning B Observation C Case Study D Written activity E Role Play F Work-based project G Portfolio Validation of Assessment The principles of reliability. Ross Swan 2. The RTO has access to staff and training/assessment resources to meet the requirements of candidates with special needs and has an assessment process that incorporates reasonable adjustment procedures. In addition the following techniques will be used to validate assessment tools and outcomes for this qualification: Benchmarking Client satisfaction survey Moderation meetings Internal audit Orion validates assessments and reviews Learning and Assessment Strategies at least annually. assessor and candidate support materials relevant to their areas of delivery and assessment. and will be the benchmarks for the ongoing review of the assessment system. fairness and practicality will be followed when conducting any assessment or gathering evidence. including the appropriate units of competency. Val Phinn Technical Vocational competency and qualifications are kept in their individual HR files Train/ Assess Both hold a Certificate IV in Assessment and Workplace Training Infrastructure (a tick indicates that Orion has the required infrastructure) All staff (including full time. The ASIC Tier 1 Short Course provides a foundation for completing the Diploma of Financial Services.12 of 74 Evidence Gathering Techniques: A range of the following techniques will be used to gather evidence for each unit of competency in line with learner guide activities allocated for assessment and the units of competency selected by the student.02 November 2005 . Prior to the assessment. Further details can be found in policies PP026 and PP021. part time and casual staff) involved in delivering the program have access to trainer. The individual being assessed will also be made aware of Orion Training and Performance Management’s appeals process in case they feel they have been unfairly assessed. flexibility. the assessor will make the student aware of what will be assessed and the process of the assessment. assessment guidelines and qualification structure. part time and casual staff) involved in the delivery and assessment of this qualification. have direct access to the current version of the relevant Training Package. All assessors have access to print and electronic copies of the assessment tools used in this program. Training and Employment Pathways Those completing the appropriate ASIC electives will also be able to provide advice at Tier 1 level. Delivery and Assessment Staff Competency of Staff Staff member 1.
02 November 2005 .13 of 74 Version 1.
02 November 2005 .14 of 74 PART I IDENTIFY CLIENT NEEDS RISK ASSESSMENT Version 1.
You are then left in an extremely invidious position. Consider the following – you believe you have obtained all the necessary information. Based on your Clients Needs Analysis and Risk Assessment you can now look to the most appropriate Insurers and products on offer. recommended these to a client. Presenting to the Insurer Underwriter’s guidelines and criteria will vary based on their risk factors and assessment tools. Making a decision In making your decision you must consider all the factors that may effect your client now and in the future. Non-disclosure to an insurer about a risk. obtaining accurate information from the very beginning is crucial. Version 1. he/she then informs you that they stores goods in the open air. whereas another Underwriter may not as it falls outside their underwriting guidelines. to developing a suitable Insurance Programme for a client. you establish for your client. This list is not exhaustive as variables and other items of information will be required dependant on each circumstance. you may consider using this assessment tool. at a later date. A Client Need Analysis and Risk Assessment tool containing a number of basic factors are included in this guide. The client is pleased with your recommendation and wishes to place cover. sourced a suitable insurer and product. when planning your Analysis and Risk Assessment Profile..15 of 74 INDENTIFY AND ANALYSE In developing a client needs analysis and risk assessment strategies.02 November 2005 . It is critical that you have that all of the facts are obtained from your client. You should not rely on the questions asked on a proposal form. can result in a claim declinature. One Underwriter may be prepared to write business on a particular risk. The insurer will not extend cover to goods in the open air. particularly if your client is looking to expand or change his business activities. this allows the Insurer to have a true and accurate picture of the risk and avoids any potential conflict. An accurate and extensive Risk Assessment and analysis will form the basis for the Risk Management strategies you will recommend and the monitoring and review Programme. Provide the Insurer with the timeframe in which you require their submission back. or one your Company may have. Present all of the factual and relevant information possible. for example a Service Station.
16 of 74 Client Analysis Occupation of your client Complete list of all assets. safety. smoking policies etc in place. Members. casuals to permanent ratio.e. Level of staff turnover Health. Volunteers Level of business liquidity/Budget Constraints Profit and Loss Report/Budget Forecast Number of years in operation/experience Number of employees Wages Types of employees i. Business Structure: • • • • Sole Trader Partnership Public or Private Company Club etc.02 November 2005 . Number of Directors. harassment. Do they provide advice? Are staff trained? Are they provided with ongoing training? Client’s Needs indicated Client’s Expectations in respect to: • • • • Financial stability of insurer Service standards Product standards Review standards Version 1. Partners.
Contracts. leases or held harmless agreements in place.17 of 74 CLIENTS NEEDS ANALYSIS (continued) Previous Claims History including incidences of loss which have not been claimed The effect of a major catastrophe on your client’s business. Do they have a plan in the event of a catastrophe? Do they have an IT Plan? The level of loss your client believes is sustainable. Fines or Penalties incurred. Sub-contractors? Do they have existing insurance cover? Are the covers adequate? Are the sums insured adequate? Version 1. Is there business activities likely to have an impact on the environment? Are staff required to complete incident reports – is this process monitored? Plans for future expansion or changes in current business activities. Do they Contract or sub-contract or employ Contractor.02 November 2005 .
near or next high hazard industry 3. fire retardant material 2. brick. Age of the building Has building been rewired and re-plumbed? Size of the building Number of storeys Version 1. Does the building contain any asbestos. Inferior construction 3.18 of 74 Risk Assessment Level of hazard associated with his occupation eg high hazard fibreglass manufacturing or low hazard. concrete.02 November 2005 Are the premises? .e. office risk. is there ready access to a fire hydrant and town waters? 6. Do they store:Materials – highly combustible/hazardous combustible low combustible non combustible. near a natural water course 4. has the area experienced any flooding? 5. unoccupied 2. Refrigerant Panel. ready access to a security service Construction of the building: Is the building constructed of?: 1. Massive construction i. Location of premises: 1.
19 of 74 Number of buildings Fences. Automatic sprinklers 2. Is there an alarm system? 2. Closed circuit TV 8. Extinguishers Does the business have: 1. Ram raid barriers 5. 3. Windows Bars or Mesh/Internal Keylocks 4. Fire Alarms 3. Security company patrols 6. Is cash kept on the premises? Version 1. Landline etc. Hose Reels 5. Deep frying 2. Security fence 7. Hydrants 4. Extractors cleaned – how often? 3.02 November 2005 . What type? Securitel. Flu cleaned – how often? Security on the premises: 1. Signs and other improvements. Fire Protection: Is there: 1.
20 of 74 9. 3.02 November 2005 . Hazards associated with the plant and machinery. Age of the plant and machinery 2. 1. 8. Are there formalised guidelines and plans in place in the event of Product Recall/Tamper? Version 1. from and how? Are goods held in physical/legal control? Do you test drive vehicles? Contracts. plant or machinery on the premises. Are plant. Equipment service warranties or agreements in place. contents or stock left in the open air? Are goods manufactured or sold? Are goods imported or exported? To and from where? Are goods transported within Australia or overseas? To. Do they have a maintenance agreement with a Computer specialist? 7. machinery. leases or agreements in place in relation to the transport of these goods. Availability of parts and equipment in Australia? 5. Is there a safe – is the cash held in this safe overnight or left unsecured? Type of contents. Does your client have portable equipment or machines which may be used away from the premises? 6. How often is the equipment maintained? 4.
Are drivers all licensed that the particular type of vehicle? 5. 1. Are drivers required to undertake driver safety training? 3. Is there an air landing strip? Version 1.? 6. Are drivers all over the age of 25 years with a minimum of 2 years experience? 4. 1. Are drivers required to complete and sign driver’s declarations? 2. Additional information in relation to the Farming Sector. Do they provide storage of the goods? If so what type and quantity. What type and quantity of dangerous goods. Type of activity carried on. Do they carry dangerous goods? 8.21 of 74 In relation to Motor Vehicles. Do all drivers have a clean license driving and claims history.02 November 2005 . Is there Ground spraying or aerial spraying? 4. Where are the vehicles garaged? 10. 9. Are there any host farming activities? 3. 2. Radius of operation of the vehicles 7.
Underwriting Department Service Premium competitive Claims Service Ongoing Service . How limited is the market in respect to the type of risk.02 November 2005 .Risk Management specialists they may engage to assist . Additional Policy Endorsements Additional Policy Exclusions Policy excesses Version 1. What alternative covers are available. PRODUCTS Extent of cover offered – is the cover most suitable to the risk.22 of 74 Possible influences and information you may consider in respect to the Insurer and the Products: INSURER Is the Insurer on your Brokers Panel of approved Insurers? Is the Insurer registered in Australia as an approved Insurer? Financial status of the Insurer (this information is available on Standards and Poor Rating Guide) Insurers philosophy in respect to underwriting of risks.
02 November 2005 .23 of 74 Version 1.
24 of 74 PART II SUBMISSION TO CLIENT RISK MANAGEMENT MONITOR AND REVIEW SAMPLE REPORT Version 1.02 November 2005 .
This may include: A Title Page: Introduction: An outline of your submission A brief summary of your Brokerage and business Profile Brief summary of your analysis of your clients needs and expectations. Confirm to the client the details. When providing a submission it is imperative that you outline in clear unambiguous language the following to a client: • • • • • • • • Reconfirm to the client their instructions. terms and conditions of the products offered. When preparing a submission to your client you should ensure that the report is written in such a manner that your client clearly understands it. Outline any risk management strategies you may have discussed. Overview : Body of Report: Conclusion: A sample report has been included as an appendice • • • • • Version 1.25 of 74 Provide a submission to a client: When preparing a submission it is essential that you have taken clear concise notes of the potential clients instructions.e. Ensure you are familiar with the products. Insurers. Premium Risk Management strategies Recommended Service Plan. commission etc you will receive). Suggest a suitable time frame for ongoing monitoring of their needs. Outline any remuneration (fees. building surveys. Remind your client of their duty of disclosure. Presenting to your client. The best method to achieve this is to structure your submission and divide into sections. Outline clearly any conflicts of interests or potential conflicts of interests that may exist between you and the recommended insurer. Outline any additional requirements i. Basis of recommendations Cover. extensions and exclusions. The claims services your company provides. Your recommendations. Provide recommendations on insurance products and risk management strategies. however you should also consider what the potential client has not told you. Obtain a letter of appointment/engagement. Explain your reasons for the selection of these products and the insurer.02 November 2005 .
if you are aware of certain facts.26 of 74 RISK MANAGEMENT STRATEGIES Developing Risk Management strategies will largely depend on the type and nature of the business. consideration facts collected during the initial client and risk analysis. on the financial viability of a business or individual and their objectives. Dates for implementing changes and further client discussions. 8. Date sent to Insurers: 4. You • Business Interruption i. Date of submission to client: 6. Risk Assessment is not just about insurance risk exposure and may require expert opinion. demolition costs etc the process of expanding the business. your client may be under-insured. but should be weighted similar to the weighting given to an Insurer and taking into • Personal injury/disease. or may be in debris. Establishing our often you should contact a client Potential affects of loss exposure to these should not be dependant purely on the amount of risks/hazards may include: premium that is paid. Date of follow up with client: 7. Date by which client requires submission: 3. • Property Loss • Theft Loss including embezzlement and employee theft • Consequential Loss (indirect) i. removal of For example .e loss of profits.e. Date of acceptance by client. Version 1. Date client contacts: 2. Part of your strategies for a complex risk may be to arrange for a specialist Risk Manager to assess the risk and develop a suitable plan. From the first phone call. which may impact their guidelines. Date followed up with Insurers: 5. An initial service plan may include the following: 1. it’s complexity and the risk factors. • Liability Loss For insurance purposes using your risk assessment analysis will help you determine the potential risk exposure.02 November 2005 . Before developing your strategies further you should consult with your client in respect to their budget constraints. would consider additional contact dates for additional working costs review. MONITOR AND REVIEW Monitoring and reviewing a Client’s Portfolio is an extremely important part of providing a professional service to your client. a monitoring plan should be in place. Your brokerage The aim of risk management: may already have a well established monitoring plan using established reporting systems and set down in To identify the risks and hazards. A balance should exist and your client may elect to self-insure some risks.
Final review – submission of renewal offer. • • • • • • • • • Letter confirming cover and ongoing service plan. Second review after 6 months including claims loss review.27 of 74 9. Confirmation checklist of covers and options not selected by client. REVIEW SERVICE PERFORMANCE As an Account Manager you have an obligation to ensure your portfolio of business operates smoothly and effectively. Return of documents plan: Ongoing monitoring plan Prepare a checklist of documents required to be sent Your client’s new business has been finalized – you to insured and to be completed and returned by the should now put into place the ongoing review plan insured. Date documents sent to client for completion: 2.02 November 2005 . 4. A regular audit of your portfolio may identify certain areas requiring attention. Date Policy Document is required by: Once again the number of times you contact a client will be dependant on the analysis you made of his needs. The insurer’s product may no longer be competitive in the market place. By completing an analysis you may find that it is related to a particular insurer or product. Date of cover request to Insurer. you initially discussed with your client. Date documents required by : 3. Date Proposal form sent to insurer: 2. Alternatively you may find that a particular Insurer you are using is incurring a significant number of claims from your portfolio of business. Submission of documentation to insurer and return of insurers documentation plan: 1. Invoices and schedules Policy Wording/PDS FSG Letter of engagement Proposal forms Premium Funding forms Others as required. For example you may find during a review of your sales/retention rate figures that you are losing a number of clients. This may include: • First review shortly after completed of New Business to ensure there are no changes to be made. Date of cover note extension with insurer if required. Third review 4 to 6 weeks prior to renewal. This could Version 1. Date of follow up with client. • • • Follow up Diary: 1. Date Funding forms sent to Premium Funding Company 3.
checked and issued to client.4. 28 of 74 result in problems at renewal date. Submissions should be completed as required by your Company’s office procedures and guidelines. Date payments are received and remitted to the underwriter. Date Policy Document/Schedule received. A review of the claims may establish a pattern which you can then discuss with your clients.02 November 2005 . 5. Sample Report – The following is for demonstration uses only and should not be used in a genuine situation. INSURANCE PORTFOLIO SUBMISSION PREPARED FOR XYZ COMPANY 1 JOHNS STREET JOHNSVILLE BY JOHN SMITH COMMERCIAL ACCOUNT MANAGER ABC INSURANCE BROKERS PTY LTD Version 1. Covers may vary and not all covers are noted. the insurer may be reluctant to provide competitive terms.
000 $5. etc OVERVIEW This report has been compiled based on the information and analysis of the information you have provided to us. the premises you occupy are leased under a formal lease agreement. Your current lease agreement requires you to maintain Glass cover. Jonesville Computer and electronic equipment Broadform Liability Cover Glass Breakage Sum Insured $ 100. You employ 5 staff. You current insurance cover sums insured are as follows: Description of Risk Fire and Perils cover only Contents of Office situated at 1 Bardon Street.29 of 74 INTRODUCTION ABC Insurance Brokers Pty Ltd has been in operation for 20 years.02 November 2005 . You operate a Business Consultancy. We offer a full range of commercial and domestic insurance products and have access to specialized markets. Security to your office is double dead lock on your doors.000 Replacement Version 1. Our dedicated staff are experienced and are committed to providing professional service.000 $ 10.000.
We recommend that you review the sums insured in respect to your office contents. Business Interruption A reduction in turnover following accidental insured damage to a commercial premises. Special Risks Covers your laptops and digital camera away from the premises. Policy extends to include damage to premises . which applies. Extra costs of reinstatement etc. Aircraft . You should note the limits that apply to cash held on premises after hours.30 of 74 RECOMMENDATIONS Covers: We recommend that you give consideration to the following insurance covers: Property (some examples only) Fire and Perils including Accidental Damage – provides you with protection against: Storm and wind . Removal of Debris. Rainwater. General Liability – Public / Products Liability Maintain this cover and consider increasing the sum insured to $10million. civil commotion. Accidental Damage. Burglary Protects you for loss of assets following violent and forcible entry to the premises. to ensure that you are adequately covered for replacement value. Restricted cover is available. Version 1. Bursting/overflowing of water systems. We recommend full accidental damage cover.02 November 2005 . Explosion . Money This cover insures against money that is stolen from the premises. this extension offers ongoing protection following your retirement or cessation of business. Lightning . Plate Glass Maintain cover as required. If required. We draw your attention to the co-insurance/average clause. Money in transit to and from a bank that is stolen or lost is also included if required. Impact of vehicle. Professional Indemnity Individuals or companies providing professional advice to the public are exposed to actions against them for damages for breaches of professional duty they owe to a client. Professional Indemnity insurance protects against negligent acts. The policy is designed to protect this loss of income and will meet continuing payroll costs and the additional expenditure incurred for the purpose of reducing the loss of income. malicious damage. Sums insured. may result in loss of net profit for the company. errors or omissions. the cover can extend to business money taken home to a private residence. Riot. Run-off cover should also be considered.
Cover Fire and Perils Cover: Risk Sum Insured Contents $ 100.00 Excess $250 Version 1. are premium and product competitive. etc. ZYZ Insurer is a well established insurer registered to operate in Australia. Policy exclusions: Burglary Cover: Risk Contents Sum Insured $ 100. they have a AAA Standards and Poor Rating.000 Insurer ZYZ Insurers Premium $ 200.31 of 74 Insurer.000 Insurer ZYZ Insurers Premium $ 700.02 November 2005 .00 Excess $250 Extensions of Cover: Cover is extended to include Flood.
02 November 2005 .32 of 74 PART III GLOSSARY OF INSURANCE PRODUCTS Version 1.
Plate Glass Under this section the replacement cost of insured glass that is broken is paid for together with sign-writing costs if nominated. malicious damage Impact of vehicle Bursting/overflowing of water systems Rainwater Accidental Damage Business Interruption A reduction in turnover following accidental insured damage. The policy also protects the insureds liability for damages in respect of injury or damage caused by any of the Products that they may sell or manufacture. BONDS Financial guarantees that are provided by an Insurer to a Principal who seeks comfort that monies are automatically available in the event of nonperformance by the insured party. The policy can insure damage to the item itself plus Public Liability protection as well. Money This cover insures against money that is stolen from the premises. Insurance Risk and Professional Magazine. civil commotion. These items are not usually insured under standard policies. Defence costs are also included. which may be used away from the normal business address are specifically nominated with individual values under this section.02 November 2005 . to a commercial premises may result in loss of net profit for the company. ANZIIF publications. due to adverse weather conditions. AVIATION INSURANCE To insure damage to the aircraft and also to protect the legal liability of the owner/operator/charterer in respect of their legal liability to third parties (including passengers) for personal injury or property damage which arises from the operation of the aircraft. General Liability – Public / Products Liability This type of policy protects the insured's liability at law to pay compensation for negligent acts that result in property damage or personal injury to members of the public. BOILER/PRESSURE VESSEL EXPLOSION The insurance of vessels which are under internal pressure. If required. To keep up to date with changes we recommend you keep up to date with market changes – various magazines such as the NIBA Gazette.33 of 74 PRODUCT SUMMARY A list of products available in the General Insurance industry is noted hereunder. Once again this list is not exhaustive as new products enter the market and change regularly. Special Risks Items of special value. non-appearance of a performer. the cover can extend to business money taken home to a private residence. COMMERCIAL BUSINESS PACK Insurers use varying descriptions of ‘Package' arrangements that are designed to insure the usual risk exposures of small to medium size business operations. insurers newsletters are a source. Burglary Protects the insured for loss of assets following violent and forcible entry to the premises. Version 1. CANCELLATION AND ABANDONMENT Provides cover for the cancellation of an event and resultant loss of income. Money in transit to and from a bank that is stolen or lost is also included if required. The policy is designed to protect this loss of income and will meet continuing payroll costs and the additional expenditure incurred for the purpose of reducing the loss of income. These ‘Packages' may include the following classes of risk: Fire plus damage caused by: • • • • • • • • • Storm and wind Lightning Aircraft Explosion Riot.
34 of 74 Electronic Equipment The repair cost of sudden unforseen breakdown or damage of electronic equipment can be insured. In addition the policy can be extended to include the cost of restoring/replacing data and software where media material has been damaged. The additional operating costs that are incurred following insured damage to the equipment may also be included. Machinery Breakdown Important items of machinery can be insured against sudden unforseen damage. This can also include boilers or vessels under pressure. The policy can be extended to include resultant deterioration of refrigerated stock and increased costs of working. CREDIT INSURANCE The insurance by a company of the credit risk they face as a result of non-payment by any of their debtors. The cover can be arranged to insure selected debtors or all debtors. CROP INSURANCE Insures the crop for Fire and Hail damage. Liability in respect to Ground Spraying and/or Aerial Spray Drift offered by some insurers. DEFAMATION COVER Provides protection following libel and slander DIFFERENCE IN CONDITIONS COVER (DIC): A policy that covers other perils not insured by basic property insurance contracts, supplemental to and excluding the coverage provided by underlying contracts.
Machinery Breakdown – Business Interruption If certain items of plant are critical to the maintenance of the business turnover and an extended period of interruption would damage profitability then this type of protection will need to be DIRECTORS AND OFFICERS LIABILITY Insures the legal liability of Directors and Officers of considered. a company arising from wrongful acts (including defence costs but excluding fines and penalties), Fidelity / Employee Fraud Losses to the business as a result of fraudulent acts carried out in the course of their business activities. or embezzlement by staff members are insured by The policy may insure claims arising pursuant to the this section. Trade Practices Act 1974 and Fair Trading and similar consumer protection legislation, breach of COMMERCIAL LEGAL EXPENSES contract (other than professional services or advice) Insures legal costs and expenses in pursuit of a libel and slander and infringement of copyright, legal claim for damages or the defence of a claim, trademarks designs or patents. The policy does not both of which result from an insured event (defined insure the “Company” other than reimbursement of in the policy). any loss, which the Company may be required to CONTRACT PENALTIES/LIQUIDATION reimburse to an Officer of the Company under the DAMAGES articles of the Company. Policy will pay for these financial penalties which have been imposed under contract and where the EMPLOYMENT PRACTICES LIABILITY penalty arises as a result of a specified risk Businesses are exposed to many and varied occurring. liabilities which may flow from employees who are discriminated against, eg. wrongful dismissal, sexual CONTRACT WORKS harassment. A form of insurance designed specifically to protect This policy protects these liabilities both of the against the types of risks that arise during employer involved and of individual staff members. It construction operations – domestic or civil. does not pay for fines imposed by the Court. CONTRACTORS PLANT AND MACHINERY Cover provided for loss or damage to unregistered mobile machinery, plant and equipment and the like. ENVIRONMENTAL IMPAIRMENT/POLLUTION LIABILITY A specialised form of liability insurance to protect against damage awards made against a company.
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35 of 74 FARM INSURANCE Offers protection for Farm Dwellings, Contents, Farm Property, Plant and Machinery, Farm improvements, Theft, Motor vehicles, Machinery Breakdown, Business Interruption, Liability, Livestock and Transit. HOME INSURANCE Coverage available for your home, contents and personal valuables. • Defined Events • Accidental Damage • Landlord Residential Coverage INDUSTRIAL SPECIAL RISKS This specialised policy is designed to insure major business enterprises with total insurable assets usually in excess of $3 million and is tailored to meet the individual needs of the client. The policy protects against accidental physical loss or damage to the asset. INFORMATION TECHNOLOGY LIABILITY A specialist form of liability insurance protection for companies or individuals who are involved in the information technology area. The policy protects against ‘Business Injury' liability and/or ‘Personal Injury' and ‘Property Damage' caused to third parties. INTELLECTUAL PROPERTY COVER Protection against actions taken for breach of trademark, copyright etc. KIDNAP & RANSOM INSURANCE To meet the costs involved in kidnap/ransom demands and associated expenses. LIVESTOCK AND BLOODSTOCK Provides cover loss of use and death of a stud animal. MARINE INSURANCE This class of insurance can encompass many areas including; • Hull and machinery of boats whether commercial or private pleasure. • Cargo carried on vessels. • Cargo in transit on land. • Third party liabilities arising from the operation of a marine craft. • Carriers Liability. • Ship-repair activities • Charterers Liability • Container Liability • Stevedore Liability MARINE/SHIP BUILDERS RISK Provides protection for loss or damage to vessels during construction, testing, commissioning and delivery. MEDICAL MALPRACTICE LIABILITY Actions, for compensatory damages by injured persons resulting from medical services provided by the insured are protected by this form of policy. MORTGAGEE PROTECTION Two forms of coverage are insurable: i. To protect the Mortgagee for financial loss which arises out of default in repayment of monies owing to the Mortgagee. This form of cover is required, by major lenders and the policy is arranged by the lender but paid for by the Mortgagor. ii. To protect the Mortgagee if the Mortgagor does not carry damage insurance on the property upon which the Mortgagee has advanced money. A common example is in respect of money advanced on Strata Title units. The policy is usually arranged and paid for by the Mortgagor.
MOTOR VEHICLE INSURANCE
STATUTORY LIABILITY - FINES & PENALTIES This insurance product has been developed as a
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Coverage for Sedans, Trucks, Mobile Equipment etc. • Comprehensive • Third Party Property Damage • Fire/Theft Third Party Property Damage • Specialised Coverage • Fleet Insurance PERSONAL ACCIDENT / ILLNESS A form of policy that protects self employed persons against loss of income if they are unable to work as a result of an accident or illness. The policy will usually include ‘lump sum' payments for accidental death or loss of hands, feet, eyes, etc. POLITICAL RISK - CONFISCATION OR EXPROPRIATION Insurance protection purchased by companies who operate outside Australia in countries that are politically unstable. A specialised insurance area. PRODUCT RECALL Covers the cost of physical recall of faulty products or their destruction and the expenses associated with the recall. PRODUCT TAMPER To insure the losses incurred as a result of malicious tamper to a product or the threat of tamper which is a hoax. PROFESSIONAL INDEMNITY Individuals or companies providing professional advice to the public are exposed to actions against them for damages for breaches of professional duty they owe to a client. Professional Indemnity insurance protects against negligent acts, errors or omissions. It is also possible to effect a Professional Indemnity ‘Civil Liability' policy which provides a broader form of protection than the basic Professional Indemnity policy. • Run-off cover
36 of 74 result of the increasing tendency of Government and Statutory Bodies to impose fines and monetary penalties on companies, eg. Workplace Health and Safety Acts. The policy will protect Directors, Officers and Employees for innocent breaches of Commonwealth and State Acts which result in a fine and the associated defence costs. STRATA TITLE PACKAGE Strata Title packages are designed to include many of the risk exposures enumerated above under one policy for Body Corporate bodies. SUPPLEMENTARY LEGAL EXPENSES This cover is usually purchased in association with Directors and Officers Liability policies. Protects the insured organisation against the cost of legal expenses and fees incurred, which may otherwise not be recoverable under a Directors & Officers Liability policy. TAX PROBE/AUDIT To pay the costs incurred in employing an accountant to provide information to the Commonwealth and/or State Tax Office as a result of a tax audit. TRAVEL When travelling overseas or within Australia , this type of policy can be effected to protect a range of risks the traveller may face. TRUSTEES LIABILITY Trustees of a trust are exposed to negligence claims against them as a result of carrying out their duties. This type of policy is intended to protect their exposure and is particularly important that trustees of superannuation funds have this protection. UMBRELLA INSURANCE A form of policy that comes into operation once the primary limit of liability is exhausted or if a specific exclusion in the primary policy excludes cover and which the ‘Umbrella' policy does not exclude from cover. WORKERS COMPENSATION
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Offers on going protection following retirement or cessation of business.
Version 1. Each employer who has employees visiting or working in another State other than the State of domicile should have a policy in the State visited.02 November 2005 .37 of 74 Each State of Australia requires employers of labour to effect a policy of insurance to protect their liabilities as set our in each Workers Compensation Act.
02 November 2005 .38 of 74 PART IV GLOSSARY OF INSURANCE TERMS Version 1.
Age Limits: Stipulated minimum and maximum ages below and above which the company will not accept applications or may not renew policies. or Capacity: The maximum amount of insurance that can prudently be accepted by an insurer. having regard to the insurer's total liabilities under its policies and its reinsurance protection. Assessor/Adjuster : A person who investigates and settles losses for an insurance carrier. ASIC is responsible for the registration of brokers.au Accident: An event or occurrence which is unforeseen and unintended. ASIC . the Insurance & Superannuation Commission (ISC).com.02 November 2005 . Insurance (Agents & Brokers) Act 1984. APRA is responsible for the prudential regulation of the financial sector. Burning Cost : A method of calculating premium based on the insured's claims experience plus a loading for expenses and profit. APRA . valuation of liabilities. This includes businesses that provide financial product advice (such as insurers or intermediaries who make recommendations or statements of opinion that are intended to influence a prospective insured’s decision in relation to a particular insurance produce) and businesses that deal in a financial product (such as insurers and agents who issue insurance and also intermediaries who arrange for a person to acquire insurance). Assignment: The legal transfer of one person's interest in an insurance policy to another person. Binding Authority: The particular terms and authorities granted to an intermediary by an insurer under a binder arrangement. These are standards covering minimum capital requirement. that monitors compliance by insurers with trade practices legalisation. Capacity: The amount of capital available to an insurance company or to the industry as a whole for underwriting general insurance coverage or coverage for specific perils. It is the measure of an Version 1. APRA Standards APRA regulates general insurers through a series of Prudential Regulatory Standards. risk management strategy. Automatic Reinsurance: An agreement that the insurer must cede and the reinsurer must accept all risks within certain explicitly defined limits. Binder: An authority given by an insurer to an insurance intermediary authorising the intermediary to enter into contracts on behalf of the insurer as its agent. rather than the ACCC.ica. Authorised Representative: A person who is authorised to provide financial services on behalf of an AFSL. Australian Financial Services Licensee (AFSL) A business that provides a “financial service” must be licensed under Chapter 7 of the Corporations Act 2001. Aggregate Deductible: Deductible in some insurance contracts in which all covered losses during a year are added together and the insurer pays only when the aggregate deductible amount is exceeded.39 of 74 GLOSSARY OF INSURANCE TERMS Acknowledgement: ICA www. either at a particular location or in a particular geographical area. and Codes of Practice. The consumer protection provisions of Part V of the Trade Practices Act 1974 have to a large extent been replicated in the ASIC Act 1998 and it is ASIC. ASIC is responsible for consumer protection legislation and administers the Insurance Contracts Act 1984.Australian Prudential Regulation Authority: A statutory authority established on the 1st July 1998.Australian Securities and Investments Commission: A statutory authority established on the 1st July 1998. The reinsurer undertakes in advance to grant reinsurance to the extent specified in the agreement in every case where the ceding company accepts the application and retains its own limit. APRA administers the Insurance Act 1973 and is responsible for the authorising of insurers. APRA took over the roles of the previous insurance regulator. reinsurance management strategy and others. See AFSLI.
Examples of Claims Made Policies are Professional Indemnity and Directors and Officers Liability. or primary company) to a reinsurer. Costs Inclusive Excess: The amount of excess the insured must pay towards the legal and defence costs. Contractual Liability: Legal liability of another party that the business agrees to assume by a written or oral contract. ie. Also called manual rating. Under Insurance. Cross Liability: A clause sometimes included in Public Liability policies which allows joint insureds to take action against each other and still obtain the benefit of the policy to protect each party as if they had a separate policy. Conditions: Provisions inserted in an insurance contract that qualify or place limitations on the insurer's promise to perform. Some types of policies allow a certain amount of under insurance before the penalty clause operates. A contract of insurance is embodied in a written document called the policy. situation or circumstance that results in a claim. Concealment: Deliberate failure of an applicant for insurance to reveal a material fact to the insurer. Usually requested by financiers to confirm that their interests are noted. insurer's ability to absorb risk. the policy provides coverage. if there is retrospective cover. Concurrent Causation: Legal doctrine that states when a property loss is due to two causes. and that the policy is current. situation or circumstance before the Period of Insurance. Cede: To transfer all or part of a risk written by an insurer (the ceding. Costs Exclusive Excess: The Insured does not pay any excess towards the legal and defence costs but only pays the amount of the Excess towards the settlement of any Claim. In an "occurrence" wording (as for Public Liability policy wordings). Contribution by Equal Shares: Type of other insurance provision often found in liability insurance contracts that requires each company to share equally in the loss until the share of each insurer equals the lowest limit of liability under any policy or Version 1.40 of 74 Certificate of currency: Documentary evidence that an insurance contract is current. Contingent Liability: Liability arising out of work done by independent contractors for a company/business. Often called an indirect loss.02 November 2005 . Co-insurance/Average: A penalty clause contained within a policy that requires the insured to bear a proportion of a loss when the sum insured or asset value is not equivalent to the actual value of the insured asset. Contract: A binding agreement between two or more parties for the doing or not doing of certain things. which may arise in the future. Brief details of the extent of cover and the parties to the contract are provided. one that is excluded and one that is covered. such as a cyclone. the circumstance must occur during the Period of Insurance whilst the notification of this event can occur at any time subsequently. or otherwise it must occur during the Period of Insurance. Claims Made/Claims Manifesting/Claims occurring: A 'claims made and notified' policy requires all claims and any fact. Class Rating: Rate-making method in which similar insureds are placed in the same underwriting class and each is charged the same rate. Consequential Loss: Financial loss occurring as the consequence of some other loss. Catastrophe: Event which causes a loss of extraordinary magnitude. to be notified to the Insurer within the Period of Insurance. The Insured must not have had any prior knowledge of the fact. Cession: Amount of the insurance ceded to a reinsurer by the original insuring company in a reinsurance operation. The actual mistake could occur at any time. earthquake.
usually monthly. Disability: a physical or a mental impairment that substantially limits one or more major life activities of an individual. of mishaps (such as motor vehicle accidents. Seventyfive percent of the eligible employees must be insured. damages or injury to the claimant. Estoppel: Legal doctrine that prevents a person from denying the truth of a previous representation of fact.) Disability Benefit: Periodic payments. It may be partial or total. Domestic Insurer: An insurance company is a domestic company in the state in which it is incorporated. Driver Education Credit: Student discount or reduction in premium amount for which young drivers become eligible on completion of a driver education course. toward the total amount of an insured loss. work accidents. Embezzlement: Fraudulent use or taking of another's property or money which has been entrusted to one's care. Direct Loss: Financial loss that results directly from an insured peril. if such participants are eligible for the benefits and become totally and permanently disabled prior to the normal retirement date. It is the income available to people for spending and saving. failure to perform that duty. Earned Income: Employment income derived from salary. commissions. funeral expenses. Disposable Personal Income: The personal income less personal tax and nontax payments. Extra Costs of Reinstatement: Additional costs that my be imposed by changes in Government or Council regulations which were not in force when the Version 1. payable to participants under some retirement plans. Effective Date: The date on which the insurance under a policy begins. Depreciation: A decrease in the value of property over a period of time due to wear and tear or obsolescence. Some states bar recovery to the plaintiff if the plaintiff was contributory negligent to any extent. when attached to the original contract.02 November 2005 . and proximate cause relationship between the negligent act and the infliction of damages. wage loss. insurance administration costs. per claim or per accident. Others apply comparative negligence. (See Partial Disability. and fires). and medical. hospital and legal costs. any of several risks covered by a policy. especially when such representation has been relied on by the one to whom the statement was made. Elements of a Negligent Act: Four elements an injured person must show to prove negligence: existence of a legal duty to use reasonable care. wages. Economic Loss: The estimated total cost. both insured and uninsured. includes such factors as property damage. which cites certain terms and which. Coverage: The scope of protection provided under a contract of insurance. not a part of the original contract. Excess/ Deductible: An amount. until the full amount of loss is paid.41 of 74 Contributory: A group insurance plan issued to an employer under which both the employer and employee contribute to the cost of the plan. Declarations: Statements in an insurance contract that provide information about the property or life to be insured and used for underwriting and rating purposes and identification of the property or life to be insured. or fees. Total Disability. Endorsement: An amendment of the policy. Endorsements: An additional piece of paper. becomes a legal part of that contract. which a policyholder agrees to pay. Contributory Negligence: Negligence of the damaged person that helped to cause the accident. Depreciation is used to determine the actual cash value of property at time of loss.
or as a matter of social justice or some other non-contractual reason. listed in the policy. Fiduciary: A person who holds something in trust for another. Exclusions: Specific conditions or circumstances listed in the policy for which the policy will not provide benefit payments.02 November 2005 . hail. civil commotion. Version 1.g. loss of income. Foreign Insurer: An insurer is a foreign company in any state other than the one in which it is incorporated. vehicle and aircraft. Some insurers have opted for a midnight expiry time. Extended Reporting Period: An additional period of time after policy expiration during which valid claims will be paid under a claims-made policy of liability insurance. Fiduciary Duty: To act in good faith and in the best interests of the client and to disclose all facts which may affect their decision. marine contracts. This is provided in conjunction with the fire insurance policy and the various "package" policies. or invitee who is being held captive. explosion. Conventionally. Popularly known as "pain and suffering." General damages are distinguished from special damages which are awarded for actual economic loss. that cover property that can be moved from one location to another for both transportation perils and perils affecting property at a fixed location. riot attending a strike. Expense ratio: The portion of premium used to pay all costs of acquiring. Extortion: Surrender of property away from the premises as a result of a threat to do bodily harm to the named insured.42 of 74 original asset was built or made. public relations. etc. smoke. Expiry date: The date on which a policy ends. riot. although this varies under certain types of policy. usually expressed as a percentage of net written premium. The insurer decides to pay in order to maintain goodwill. for which the policy will not provide benefits. Exclusion or Exception: Specified conditions or circumstances. General Average: In ocean marine insurance. General Damages: Damages awarded to an injured person for intangible loss which cannot be measured directly by dollars. relative. Extended Coverage Insurance: Protection for the insured against property damage caused by windstorm. Exposure Unit: Unit of measurement used in insurance pricing. Reinsurers are not obliged to pay for ex gratia claims but may specifically agree to do so under the "follow the fortunes" clause. Fortuitous Loss: Unforeseen and unexpected loss that occurs as a result of chance. Facultative Reinsurance: A type of reinsurance in which the reinsurer can accept or reject any risk presented by an insurance company seeking reinsurance. Experience Refund: A provision in most group policies for the return of premium to the policyholder because of lower than anticipated claims. e. 4. such as medical costs.00pm is the normal time of expiry. Ex gratia payment: A payment made by an insurer to a claimant as an act of grace. The levy will vary from State to State Floaters: Insurance policies. Fire Services Levy: A separate charge made by Insurers on certain classes of business that reflects the amount of cost imposed by Governments on Insurers for contribution to the funding of fire brigades. a loss incurred for the common good that is shared by all parties to the venture. writing and servicing insurance and reinsurance. reinsurance contracts. where no contractual entitlement to the claim exists. including disclosing any conflicts of interest.
such as an employer. Version 1. Group Insurance: Insurance written on a number of people under a single master policy. usually associated with a sharp decline in capacity (see "Soft market"). Housekeeping: An important risk assessment issue to underwriters.43 of 74 Extended Reporting Period Endorsement: Added to a claims-made policy of liability insurance to provide additional period of time during which valid claims will be paid. appearance. Hard Market: That part of the insurance sales cycle in which competitive pricing is at a minimum as companies charge the premiums necessary to meet their underwriting losses in order to avoid insolvency and boost capacity.A claimant must be able to establish at time of loss that he or she had a pecuniary or economic interest in the subject matter of insurance. during which period the insurer has no right to make unilaterally any change in any provision of the contract. Indemnification: Compensation to the victim of a loss. by payment. Gross Negligence: the intentional failure to perform a manifest duty in reckless disregard of the consequences as affecting the life or property of another. in whole or in part. to absorb losses of claimants against insolvent insurance companies. Insolvent: Having insufficient financial resources (assets) to meet financial obligations (liabilities). Hold Harmless Clause: Clause written into a contract by which one party agrees to release another party from all legal liability. Guaranteed Renewable Contract: A contract that the insured person or entity has the right to continue in force by the timely payment of premiums for a substantial period of time. Hazard: Condition that creates or increases the chance of loss. Incurred Claims: Incurred claims equal the claims paid during the policy year plus the claim reserves as of the end of the policy year. Group Contract: A contract of insurance made with an employer or other entity that covers a group of persons identified as individuals by reference to their relationship to the entity. The difference between the year end and beginning of the year claim reserves is called the increase in reserves and may be added directly to the paid claims to produce the incurred claims. derived from assessments against solvent insurance companies. This interest does not have to be an interest recognised in law or in equity. deferred maintenance and general untidiness. utility and up-keep of premises. Guaranty Fund: A fund. congestion in work areas. while the contract is in force. other than a change in the premium rate for classes of policyholders. Poor housekeeping would be evidenced by excessive accumulated rubbish. Incurred-but-not-reported (IBNR) reserves: liability account on an insurer's balance sheet reflecting claims that are expected based upon statistical projections but which have not yet been reported to the insurer. Insurable Interest : . such as a retailer who agrees to release the manufacturer from legal liability if the product injures someone. Imputed Negligence: Case in which responsibility for damage can be transferred from the negligent party to another person. repair. Indemnity: Legal principle that specifies an insured should not collect more than the actual cash value of a loss but should be restored to approximately the same financial position as existed before the loss.02 November 2005 . Housekeeping concerns an objective assessment of the extent to which an insured maintains the general cleanliness. minus the corresponding reserves as of the beginning of the policy year. Such situations represent increased hazard. issued to their employer or to an association with which they are affiliated. or replacement.
This can be a more cost-effective method of obtaining the required level of cover than purchasing it from the ground up. or unpredictability of accidental losses. They may. Loss Ratio: The ratio of claims to premiums. Territorial Limit refers to the place where the act. Joint-and-Several Liability: A legal principle that permits the injured party in a tort action to recover the entire amount of compensation due for injuries from any tort feasor who is able to pay. In the event of loss the layers operate consecutively. which reduces the probability or frequency of a particular loss but does not eliminate completely all possibility of that loss. such as legal or independent adjuster fees.44 of 74 Insurable Risk: The conditions that make a risk insurable are (a) the peril insured against must produce a definite loss not under the control of the insured. paid by an insurance company in settling a claim. Direct covers may also have layers. Loss Prevention: Any measure. on what terms. (b) there must be a large number of homogeneous exposures subject to the same perils. It may be calculated in several different ways. Material fact: Any fact is material if the insured knows that it is matter relevant to the decision of the insurer whether to accept a risk and if so. (c) the loss must be calculable and the cost of insuring it must be economically feasible. Knock for knock agreement: An arrangement between motor vehicle insurers whereby each agrees to pay for its own repair costs and will forego recovery action against the other signatories irrespective of questions of fault. have a primary liability cover and then purchase an additional layer of protection that sits on top of the primary layer. error or omission occurs. Loss Payable Clause: Means of protecting a mortgagee's interest in property by directing the insurer to make a loss payment to the mortgagee in the event of a loss. Sometimes insured’s will purchase insurance in layers. Loss Expense . Loss Avoidance: A risk management technique whereby a situation or activity that may result in a loss for a firm is avoided or abandoned. which cannot be charged to individual claims. Version 1. A fact is also material if a reasonable person in the circumstances could be expected to know that matter was so relevant. on the contrary there is a real possibility that a claim may eventuate. Limit or limit of liability: The maximum amount an insurer will pay under a particular policy coverage. Jurisdiction Limits: Refers to the fact that the policy will only cover claims brought within the court system of the nominated countries.Allocated: Handling expenses. (d) the peril must be unlikely to affect all insureds simultaneously. for example.Unallocated: Salaries and other expenses incurred in connection with the operation of a claim department of an insurance carrier. which can be definitely charged to that particular claim. and using paid claims with or without changes in claim reserves and with or without changes in active life reserves. Known Circumstance: Claims arising after the policy inception which arise from circumstances which the Insured knew (or should have known) at the time of the policy inception may give rise to a claim. Loss control: any conscious action (or decision not to act) intended to reduce the frequency. regardless of the degree of that party's negligence. This is because such claims are not fortuitous at the time of entering into the insurance but.02 November 2005 . which are often placed with different reinsurers to facilitate placement at the best terms for the reinsured. are excluded. using paid premiums or earned premiums. Layer: Non-proportional reinsurance programs are usually divided into a number of layers. Loss Expense . and (e) the loss produced by a risk must be definite and have a potential to be financially serious. severity.
or profit. the insurer may avoid the contract. In all other cases an insurer is entitled to reduce its liability for any claim by the extent to which the failure to disclose prejudiced the insurer. the insurer has no right to unilaterally make any changes in any provision of the policy while it is in force. An insurer can cancel a policy for nondisclosure. that can be expected. regardless of when the claim is filed. inception and deny any claim. Non-disclosure: This is the withholding of information from an insurer. Occurrence policy: A liability insurance policy that covers claims arising out of occurrences that take place during the policy period. During this period. that results in bodily injury or property damage during the period of an insurance policy. Misrepresentation: Misrepresentation occurs when an applicant for insurance makes a statement that is untrue and the insurer in good faith enters into the contract. In all other cases the Contracts Act 1984 offers means of protection for the insured from the adverse consequences of misrepresentation. fire and theft. which is designed to cover benefits of the policy. The term is also used to describe the portion of the premium remitted to the home office by an agent after deduction of the agent's commission. The individuals insure under the policy are then issued certificates of insurance. establishing a group insurance plan for designated members of an eligible group.02 November 2005 . Liability flows from the event. An insurer can cancel a policy for misrepresentation. It refers to a policy under which the circumstances giving rise to a claim must occur during the period of insurance. due to the disability. If done fraudulently. Market Value: The price at which an item can be bought or sold at any particular time. If done fraudulently during contract negotiations an insurer can avoid a contract from its. harmful conditions. but not expenses. by the timely payment of premiums. Master Policy (or Master Contract): The policy issued to a group policyholder setting forth the provisions of the group insurance plan. created problems for insurers both in terms of rating adequacy and claims reserving. Claims under such a contract may arise many years after the occurrence of an event and this. Net Premium: The portion of the premium rate. contingencies. Occupational Hazards: Occupations which expose the insured to greater than normal physical danger by the very nature of the work in which the insured is engaged. Occurrence wording: A term used in liability insurance. from the injury. including continuous or repeated exposure to substantially the same general. such as to age 65. Occurrence: An accident. Material damage and physical damage are terms that often are used inter. Non-cancellable Guaranteed Renewable Policy: An individual policy which the insured person has the right to continue to force until a specified age. Master Policy: A policy that is issued to an employer or trustee. Material Damage: Insurance against damage to a vehicle itself. under which claims must be made against the insured during the period of insurance in order for the insurer to provide an indemnity.45 of 74 Loss Reserve: The amount set up as the estimated cost of a claim. and the varying periods of absence from the occupation.changeably. that is. It includes automobile comprehensive. These problems gave rise to the development of "claims made" wordings. under which the claim must be made against the insured and Version 1. Negligence: Failure to use the care that a reasonable and prudent person would have used under the same or similar circumstances. A further development was the "claims made and notified" wording. collision. No fault liability The principle that a person who has been injured by another may recover compensation from the other person whether or not that other person was at fault (such as by negligence or recklessness).
Pool: An organization of insurers or reinsurers through which particular types of risk are underwritten and premiums. Mistakes will expose the insurer and possibly reinsurers to an excessive single loss beyond that contemplated by either party when treaties were negotiated. or distributor because of injury. maximum probable loss. Maximum possible loss. Insurers also use a form of PML to estimate their exposures in catastrophe zones to help them decide how much catastrophe reinsurance to purchase. a manufacturer. theft or other perils. windstorm. Other definitions of PML assume that these items fill function normally. It refers to an estimate of the likely loss to be experienced in a "worse case" scenario.Overriding Commission (Overwrite): A commission paid to general agents or agency managers in addition to the commission paid the soliciting agent or broker. such as auto or home insurance. for individuals or families rather than for businesses or organizations. Probable maximum loss (PML): A term mostly used in connection with property insurance. fire. or damage resulting from the use of its product. For medical expense insurance itemized bills must also be included. excluding catastrophe events. Primary Insurance: Insurance that pays compensation for a loss ahead of any other insurance covers the policyholder may have. Physical Damage: Damage to or loss of the auto resulting from collision. The term is frequently used to mean the reduced paid-up insurance available as a nonforfeiture option. explosion. eg. Personal Lines: Those types of insurance. Insurers have differing terminology for PML. Some definitions assume that all fire fighting equipment. fire doors) and alarms for a particular risk will fail. which prevents an insured from performing one or more of the functions of his/her regular job. Pollution Liability: Exposure to lawsuits for injury or cleanup costs that result from pollution damage Premium funding: An arrangement between an insured and a finance provider whereby the insurance premiums are financed. Paid-up Insurance: Insurance on which all required premiums have. Product Liability: Legal liability incurred by. Proof of Loss: Documentary evidence required by an insurer to prove a valid claim exists. maximum foreseeable loss. such as fire. Peril: The cause of a possible loss. It usually consists of a claim form completed by the insured and the insured's attending physician. or riot. etc. Some treaties have been negotiated on the basis that PML underwriting applies. losses and expenses are shared in agreed upon amounts. merchant. been paid. Version 1. They are all similar in concept. 46 of 74 then advised to the insurer within the policy period. Partial Disability: The result of an illness or injury. theft. The insurer uses this estimate of probable maximum loss as a basis for arranging reinsurance. Partial Disability: A benefit sometimes found in disability income policies providing for the payment of reduced monthly income in the event the insured cannot work full time and/or is prevented from performing one or more important daily duties pertaining to his occupation. structural fire protection (eg. An insurer may be able to substantially increase its retention (and therefore retain more premium) on a single risk because of its PML estimate.02 November 2005 . estimated maximum loss.
theft. an insurer defends a case without commitment to The number of reinstatements allowed is a matter for provide coverage in the event that the facts negotiation when contracts are arranged. In burglary insurance. malicious mischief. protection against the loss of. and smoke. and not reinsured. Retention: The net amount of risk retained by an insurance company for its own account or that of specified others. riot. payment of a reinstatement premium. plaintiff. thus reduced by the payment of a loss. Premiums and losses for the damage which sets in motion an unbroken chain of business that is ceded to the facility are pooled and events between the occurrence and damage. explosion. proximately caused by an insured event. automatic reinstatement of sum insured or policy limits in the event of claims payments. claim payment under direct policies of insurance. Version 1. motor vehicles. Cover is voiding the contract from its inception. hail. etc. to claims incurred prior to termination. the insurer on the grounds of material misstatement It may refer to the restoring of a lapsed or cancelled on the application for insurance. Run-off: The remaining liability of a reinsurer after the effective cancellation date of a treaty where there is no portfolio withdrawal or additional cover offered under a Claims Made Policy. or damage to. aircraft.02 November 2005 . a claim payment Reserve: An amount representing liabilities kept by will automatically reduce the sum insured and this an insurer to provide for future commitments under must be reinstated by negotiation between the policies outstanding or an amount allocated for a parties. The action of policy to full force and effect. Often reinstatement is Reservation of Rights: An arrangement whereby subject to. automatically reinstated to the level existing prior to the occurrence of that loss. Replacement Cost: The cost to repair or replace Punitive Damages: a court awarded amount that property at construction costs prevailing at time of exceeds the economic losses and general damages loss. the cost to repair or rebuild property without of a defendant and is intended solely to punish the considering depreciation. vandalism. real and Liabilities may continue to be discharged in respect personal property caused by such perils as fire. windstorm. The term disclosed during the trial reveal that the occurrence also refers to reduction of sum insured following a is not covered. insurance company from another insurance company (reinsurer) to provide it protection against Property Insurance: Provides financial protection large losses on cases it has already insured. windstorm. riot and civil Reinsurance :The purchase of insurance by an commotion. hail. against loss or damage to the insured's property caused by such perils as fire. It may also refer to the rescission must take place within the contestable situation that exists when the amount of reinsurance period or Time Limit on Certain Defences but takes cover provided under an excess of loss treaty is effect as of the date of issue of the policy. Reinsurance Facility: An alternative mechanism to service those insureds that cannot obtain insurance Proximate Cause: The dominating cause of loss or in the voluntary market. for example.47 of 74 Property Damage Coverage: An agreement by an insurance carrier to protect an insured against legal liability for damage by an insured automobile to the property of another. Losses may continue after date of termination until expiry of individual Property Insurance: Insurance providing financial cessions made to the treaty during its currency. Other classes of insurance may provide for special purpose. Rescission: Termination of an insurance contract by Reinstatement: A term used in a number of ways. A all insurers share according to their proportion of the successful loss or damage claim must be voluntary market.
. Salvage: Recovery made by an insurance company by the sale of property. Standard Provision: Those contract provisions generally required by state statutes until superseded by the uniform policy provision. Soft Market: That part of the insurance sales cycle in which competition is at a maximum as insurance companies use their excess capacity to sell more policies at lower prices (see Hard market). Retroactive Date: Retroactive date is the date after which acts. which has been taken over from the insured as a part of loss settlement. Self-Insurance:(1) A program for providing group insurance with benefits financed entirely through the internal means of the policyholder. error or omission arising from work done after the Retroactive date will be covered under the Policy. The Inception date is the date of the start of the Policy Period. or unpredictability of accidental losses. (2)A set of policy provisions prescribed by former laws setting forth certain rights and obligations of both the insured and the company under an individual policy of health insurance. Substandard Insurance: Insurance issued with an extra premium or special restriction to those persons who do not qualify for insurance at standard rates. That is. any act. Strict Liability: Liability for damages even though fault or negligence cannot be proven.02 November 2005 Third party claim: a demand made by a person against a policyholder of another company and any payment that will be made by that company. Treaty: An agreement between a reinsurer and a ceding insurer setting forth details of the reinsurance arrangement. Subrogation: Process by which one insurance company seeks reimbursement from another company or person for a claim it has already paid. severity. These were originally introduced in 1912 and have now been replaced by the Uniform Provisions. Version 1. errors or omissions of the Insured are covered.48 of 74 Risk control: Any conscious action (or decision not to act) intended to reduce the frequency. (2) A form of risk financing through which a firm assumes all or a part of its own losses. in place of purchasing coverage from commercial carriers.
10 3. type of work you complete on a daily basis and any other training you may have completed.5 3.8 3. Exemptions from certain activities may be available.2 3. This will be dependent on your experience.02 November 2005 .49 of 74 PART V ACTIVITIES Before proceeding with your activities. You will be required to provide written evidence to support this.6 3.15 Version 1. current work role. discuss which ones are to be completed. with your Trainer. You are required to complete the following activities: Activities 3.12 3.
outline the most relevant sections you would use on a regular basis. • Subrogation? • Insurable interests under the Insurance Contracts Act? • What are the obligations of the insurer in respect to renewable contracts? • Marine Insurance Act – outline the insurance covers this act would apply to • Which Insurance Act covers Pleasure Craft Insurance? • Outline the powers of ASIC? • Nominate two breaches you would consider should be reported to ASIC? • What is the purpose of the IBDL and the IEC? • Which of the Retail Products are you required to be Tier 1 accredited to provide advice? • What is the minimum ‘cooling off’ period under a general insurance contract? • What are a broker’s obligations in respect to where a potential ‘conflict of interest’ may exist between the Broker and the Insurer? • In what timeframe is a Broker required to remit? Refunds to a client Payments to an insurer Version 1.02 November 2005 .50 of 74 Activity 1 – Answer the following questions as a review of the Insurance Acts and Codes of Practice • The Insurance Contracts Act .
02 November 2005 . what is the purpose of the following? • Trade Practices Act • Credit Act • Consumer Credit Code • Privacy Act Version 1.51 of 74 How does the Insurance Act 1973 and the General Insurance Code of Practice have an affect on you as a broker? In brief.
What are the obligations in relation to this insurance contract. Discuss with your Trainer the options that are available to a client who has had a claim refused. There is a fire on the premises. Version 1.02 November 2005 .52 of 74 ACTIVITY 2 A client requests insurance cover on his business. it is discovered the insured has been manufacturing Metal Garden Ornaments. Taking into account the relevant Insurance Acts: 1. 2. He indicates to you and on his proposal form that the business involves the retail sale of Garden furniture and ornaments. during the course of investigation by the Assessor’s. He then sells these products in the shop. on the premises. Can the Insurer refuse to settle the claim? State your reasons.
02 November 2005 .53 of 74 ACTIVITY 3 Research and briefly describe each of the following:• Proximate Cause • Resultant Damage • Statutory Liability • Claims Made Policy • Nominate two ‘claims made’ policies • Employment Practices Liability • Co-insurance • Difference in conditions insurance • Indemnity Value • Reinsurance • Treaty • Contractual Liability • Cross Liability Version 1.
Select three Business Pack Policies your office may use and provide a comparison between the three on the following sections including endorsements relative to each section: Burglary Money Machinery Breakdown Liability The proprietor has indicated that he has limited funds to cover insurance premiums.54 of 74 CASE STUDIES ( These tasks should be completed in line with your Company’s Guidelines) ACTIVITY 4 You are in the process of negotiating a Business Pack Policy Renewal for a Motor Vehicle Repair Workshop. Outline the classes of insurance cover you believe are most essential to this client. He also informs you that he has purchased a Tow Truck to use in association with his business. The building is leased and he has one apprentice mechanic.02 November 2005 . State the reasons for your selection. Version 1.
List the products you may consider recommending and the basis for your recommendation. They employ 20 permanent staff and own the property from which the business operates. Owns the property. b) James Smith is an Electrician. 1. You need to establish a suitable Needs and Risk analysis before contacting the prospective client. You receive a brief telephone message from a prospective client who has provided limited information. supplying products to retail grocery stores.55 of 74 ACTIVITY 5 A number of scenarios have been provided below. Operates from his home. he has one casual employee. 2. You should select two of these scenarios and provide the following:You may assume that the client does not require any other cover other than cover for his/her business. The Director has advised he has a fleet of 10 vehicles and owns the premises from which his business operates. employs 2 casual staff. List the information you would seek from this client in order to obtain a quotation on their behalf. c) Food Outlet Pty Ltd owns a retail grocery store. g) Car and Truck Repairs Pty Ltd own and operates a mechanical auto repair workshop. runs cattle and grows cotton.02 November 2005 . 3 directors and 5 casual employees – leases his premises. and owns a Holden Rodeo Utility. They employ 5 people and lease their business premises Version 1. List the Insurers you have selected and the reasons for the selection Scenarios a) Going Trucking Pty Ltd owns and operates a medium General Freight Business. d) Outback Pastoral Company operates a grazing and farming property with 2 working directors only. Leases the premises f) Geronimo Whole Suppliers Pty Ltd operates a wholesale supply business. e) Jenny Jones runs a small café. takeaway food outlet.
02 November 2005 .56 of 74 h) Rosewall Social Tennis Club – has 20 members and hires courts. i) Pull My Tooth Dental Practice – employs 3 permanent staff. Version 1. j) Dog Trailer Manufacturing Pty Ltd – manufactures truck and car trailers. Leases the surgery.
5 million. The property is situated at 14 Hargreaves Street.57 of 74 ACTIVITY 6 (Select either Activity 6.000 Liability cover of $10million.02 November 2005 . Butcher and Bakery. Please note submissions must be in report format. he has provided the following limited information • • • Building value . Office Contents . fire extinguishers. which is insured elsewhere and is due for renewal in 3 weeks time. 2 storey office block with local alarm system. Newcastle 2010 NSW.000 per annum. Lease agreement requires tenants to be responsible for cover in respect to Glass and all Landlords Fixtures and Fittings.5million Liability cover .$1.$10million Version 1. His wage bill is $700. He is a fully qualified Civil Engineer as well as a Property Investor He rents two offices in the building to other professionals. He has recently purchased a Civil Engineering Business from the retiring Directors for whom he has worked for 15 years. John has contacted your office seeking advice on suitable Insurance covers.$50. John French is a new client who has contacted your office for quotations. • • Building sum insured . John also owns the following investment property. 7 or 8) Prepare the following Business Submission. he has initially provided the following information. Retail Shopping Complex with 3 units occupied by Green Grocer. Brisbane 4000.$2. 1 Hamilton Street. He provides a consulting engineering service for large utilities companies in the area and regularly supervises on site work undertaken by contractors. Employs 10 staff and estimates an annual turnover of $8 million. He has built and moved into a brick.
include details of the products.using the attached template complete the relevant schedule. List the most common exclusions on each product. Complete the following documentation: • Select one class of cover or policy package you have recommended on the property in NSW. The reasons you are making the recommendations. Assume the base premium is $1000. Provide a list of all other documents you may send with the submission.00. Prepare a submission to the client. Write a New Business submission report to Mr French. provide examples. Include a covering letter to Mr French. and risk management strategies you are recommending. • • • Ongoing Service Formulate an ongoing monitoring service plan for this client including timeframes in respect to: • • • • premium collection document return and recording monitoring of losses ongoing service plan Version 1. Consider risk management strategies to be discussed with the client and outline these.58 of 74 Task: Prepare a quotation (documents will be required) • • • • • • Outline in point format the additional information you would require Complete a suitable Needs Analysis Identify suitable products/insurers List the reasons why you chose the product and the particular Insurer. Prepare suitable quotation slips for the Insurers. Insurers.05%. Assume you have selected an insurer who pays you an additional overriding commission of 0.02 November 2005 .
02 November 2005 . • Describe in point format your next course of action. Version 1. • Provide a sample of the appropriate documentation you would forward to the Insurer.59 of 74 Acceptance of Submission Mr French accepts your submission. • Provide a sample of the appropriate documentation you would forward to the client.
com Invoice Name: Address: Address: Class of Policy: Invoice Nu mb er Invoice Da te Acct ID Policy No: Period of Cover: From: To: Insurer: The Insured: Particulars: See attached schedule for a description of the risk insured Note to student: (add any other information which you deem as necessary to this invoice) (save this document before emailing) Premium $ U’writer Fire Levy Levy $ $ GST $ Stamp Duty $ Broker Fee $ Version 1. Brisbane 4000 1/15 Unit Street Brisbane City 4000 ABN 12 134 151 678 Phone: 07-33334444 Fax: 07-33334445 Email: email @xyz. 123456 GPO Box 123.60 of 74 XYZ INSURANCE BROKER PTY LTD AFS Lic.No.02 November 2005 .
(complete schedule as per your Company’s guidelines and procedures) The Business: The Situation: Version 1.61 of 74 TOTAL DUE Schedule attached to and forming part of Policy No: Insurer: Period of Cover: The Insured: From: Inv No: $ To: Note to student.02 November 2005 .
000 2 x Toyota Landcruiser Utilities Market Value 1 x Toyota Camry Sedan Market Value 2 x Prime Movers $100.000 eoe 2 x Tractors $ 75. They are due for renewal in 3 weeks time and he is not satisfied with his current broker. $ 30. Wheat.000 eoe He employs 1 permanent employee who resides at Farm 2 and 4 casuals. $ 50. • • • • • • • • • • • • • • Main Homestead $100. He owns two farms.000 (Timber and Iron Roof) 2 x Machinery Sheds $ 30. He is also a Contract Harvester.000 eoe Farm 2 – 150 hectares in size – Stud Horses • • • • • Main Homestead 2 x Hay sheds 2 x Bores 5 Tonne Truck and Crate 2 x Horse Floats $150.02 November 2005 . Barley and Sorghum.000 $ 15.000 eoe 2 x Cotton Pickers $250. 2 x Headers $150.000 eoe (Iron on Steel) 3 x Silos Not insured (Iron) Dam for domestic use and irrigation purposes.000 (Timber and Iron Roof) Contents $ 60.000 Workers Cottage $ 30.62 of 74 ACTIVITY 7 Frank Farmer is a new client who has contacted your office for quotations. He has provided the following information His current policy covers the following:Farm 1 .000 eoe Miscellaneous farming equipment.000 eoe (Iron on Timber) $ 15. Version 1.000 eoe 2 x Tipping Trailers.300 hectares in size. he has initially provided the following information.000 (Timber and Iron Roof) $ 40.
Consider risk management strategies to be discussed with the client and outline these. provide examples. Include a covering letter to Mr Farmer. Prepare a submission to the client. Write a New Business submission report to Mr Farmer. Insurers. Using the attached template complete the relevant schedule. List the most common exclusions on each product. Complete the following documentation: • • • Select one class of cover or policy package you have recommended. • Ongoing Service Formulate an ongoing monitoring service plan for this client including timeframes in respect of: • • premium collection document return and recording Version 1. The reasons you are making the recommendations. and risk management strategies you are recommending. Provide a list of all other documents you may send with the submission. Assume the base premium is $1000.02 November 2005 .00. Assume you have selected an insurer who pays you an additional overriding commission of 0.05%. Prepare suitable quotation slips for the Insurers. include details of the products.63 of 74 Task: Prepare a quotation (documents will be required) • • • • • • Outline in point format the additional information you would require Complete a suitable Needs Analysis Identify suitable products/insurers List the reasons why you chose the product and the particular Insurer.
Version 1. • Provide a sample of the appropriate documentation you would forward to the client. • Describe in point format your next course of action. • Provide a sample of the appropriate documentation you would forward to the Insurer.02 November 2005 .64 of 74 • • monitoring of losses ongoing service plan Acceptance of Submission Mr Farmer accepts your submission.
123456 GPO Box 123.No.com Invoice Name: Address: Address: Class of Policy: Invoice Nu mb er Invoice Da te Acct ID Policy No: Period of Cover: From: To: Insurer: The Insured: Particulars: See attached schedule for a description of the risk insured Note to student: (add any other information which you deem as necessary to this invoice) (save this document before emailing) Version 1.02 November 2005 .65 of 74 XYZ INSURANCE BROKER PTY LTD AFS Lic. Brisbane 4000 1/15 Unit Street Brisbane City 4000 ABN 12 134 151 678 Phone: 07-33334444 Fax: 07-33334445 Email: email @xyz.
(complete schedule as per your Company’s guidelines and procedures) The Business: The Situation: Version 1.66 of 74 Premium $ U’writer Fire Levy Levy $ $ GST $ Stamp Duty $ $ $ TOTAL DUE Broker Fee Schedule attached to and forming part of Policy No: Insurer: Period of Cover: The Insured: From: Inv No: To: Note to student.02 November 2005 .
She employs 5 staff. Fire and Perils • • Contents Stock $150. she owns a Wholesale Book Distribution Company She has provided the following information: Her business is located in a warehouse complex.000 Burglary • Stock only $ 15.000 $300. She currently has the following insurance cover. She leases the shop space. Fire extinguishers only. Liability Version 1.000 $ 5million. Concrete/Iron construction. Books are imported from overseas and are transported via road to various destinations.02 November 2005 .000 pa. Security is a monitored alarm system.000. Turnover is $3.67 of 74 ACTIVITY 8 Judy Sullivan has contacted your office.
• Ongoing Service Formulate an ongoing monitoring service plan for this client including timeframes in respect of: • premium collection Version 1. The reasons you are making the recommendations.68 of 74 Task: Prepare a quotation (documents will be required) • • • • • • Outline in point format the additional information you would require Complete a suitable Needs Analysis Identify suitable products/insurers List the reasons why you chose the product and the particular Insurer. Assume you have selected an insurer who pays you an additional overriding commission of 0. and risk management strategies you are recommending.02 November 2005 . Provide a list of all other documents you may send with the submission. Prepare suitable quotation slips for the Insurers.05%. List the most common exclusions on each product. Prepare a submission to the client. Assume the base premium is $1000. Write a New Business submission report to Mrs Sullivan. provide examples. Include a covering letter to Mr Farmer. Complete the following documentation: • • • Select one class of cover or policy package you have recommended.00. Using the attached template complete the relevant schedule. Insurers. Consider risk management strategies to be discussed with the client and outline these. include details of the products.
02 November 2005 . • Provide a sample of the appropriate documentation you would forward to the Insurer. • Provide a sample of the appropriate documentation you would forward to the client. • Describe in point format your next course of action.69 of 74 • • • document return and recording monitoring of losses ongoing service plan Acceptance of Submission Mrs Sullivan accepts your submission. Version 1.
Brisbane 4000 1/15 Unit Street Brisbane City 4000 ABN 12 134 151 678 Phone: 07-33334444 Fax: 07-33334445 Email: email @xyz. 123456 GPO Box 123.02 November 2005 .com Invoice Name: Address: Address: Class of Policy: Invoice Nu mb er Invoice Da te Acct ID Policy No: Period of Cover: From: To: Insurer: The Insured: Particulars: See attached schedule for a description of the risk insured Note to student: (add any other information which you deem as necessary to this invoice) (save this document before emailing) Version 1.No.70 of 74 XYZ INSURANCE BROKER PTY LTD AFS Lic.
71 of 74 Premium $ U’writer Fire Levy Levy $ $ GST $ Stamp Duty $ $ Broker Fee $ TOTAL DUE Schedule attached to and forming part of Policy No: Insurer: Period of Cover: The Insured: From: To: Inv No: Note to student.02 November 2005 . (complete schedule as per your Company’s guidelines and procedures) The Business: The Situation: Version 1.
Complete an analysis of the number of policies and volume of business you have transferred from one underwriter to another. Review Renewal Transfer/Retention Rate I. House Insurance. 4. II. 3. I. The reasons for the lapses. Select a particular underwriter. Select a particular type of business or scheme your brokerage may write.02 November 2005 . Select a period of renewals II. Review the retention rate of business in relation to product/client type. III. eg. One off liability insurance etc. Complete an analysis of the number of claims and types of claims you have lodged in the passed 6 months. Review claims loss ratio: I.72 of 74 ACTIVITY 9 You may choose one of the following and submit a report: You are required to outline what methods you used to obtain the data. or II. III. Complete an analysis of your retention rate of that business 2. eg electricians. which have lapsed. 1. professionals etc. Select a particular type of client. Review New Business Written Complete an analysis of the number and premium volume amount of non-transfer New Business Written Policies for the past 6 months that you have been actively involved with. Version 1. The number of policies.
02 November 2005 .73 of 74 PART VI MARKING RECORD Version 1.
74 of 74 Version 1.02 November 2005 .
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