tier 1 training handbook

7/28/2019 Tier 1 Training Handbook

http://slidepdf.com/reader/full/tier-1-training-handbook 1/74

A

TRAINING GUIDE

FOR TIER 1 STUDENTS

IN

GENERAL INSURANCE BROKING

This training guide as been developed by the Author, as resource materialfor 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.



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© Tupcorp Training and Consultancy



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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 IndicativeHrs

Unit Name Please tick uniselected for th

training plan

FNSASIC503TA 50 Provide advice in Managed Investments

Prerequisites for FNSASIC503TA:

FNSICCUS506A 60 Determine client requirements and expectations

FNSICADV502A 70Provide appropriate and timely information and advice toclients

FNSICPRO502A 80 Conduct research to support recommendations

FNSICCUS507A 70 Record and implement client instructions

FNSASIC503UA 50 Provide advice in Superannuation

Prerequisites for FNSASIC503UA:


FNSICADV502A 70Provide appropriate and timely information andadvice to clients



FNSASIC503VA 50 Provide advice in Derivatives

Prerequisites for FNSASIC503VA:FNSICCUS506A 60 Determine client requirements and expectations


FNSFMKT502A 60 Analyse financial market products for client

FNSFMKT503A 50 Advise clients on financial risks

FNSASIC503WA 50 Provide advice in Securities

Prerequisites for FNSASIC503WA:



FNSFMKT502A 60 Analyse financial market products for client



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FNSASIC503XA 50 Provide advice in Life Insurance

Prerequisites for FNSASIC503XA:

FNSICADV501A 150 Provide appropriate services, advice and products to clients

FNSCOMP501A 80Comply with financial services legislation,regulations and codes of practice



FNSASIC503YA 50 Provide advice in Insurance Broking

Prerequisites for FNSASIC503YA:

FNSINBK501A 60 Prepare a new business submission for a broking

FNSINBK502A 60 Monitor client requirements

FNSINBK503A 60 Implement changes to broking client’s insurance program

FNSINBK603A 60 Review insurance brokerage service performance

FNSICGEN403A 10 Collect, assess and use information

FNSICGEN501A 40 Produce research reports and make presentations

FNSICCUS301A 25 Respond to customer enquiries

FNSASIC503ZA 50 Provide advice in Financial Planning

Prerequisites for FNSASIC503ZA:

FNSFPLN501A 50Comply with financial planning practice ethical, operationalguidelines and regulations

FNSFPLN502A 50 Conduct financial planning analysis and research

FNSFPLN503A 60 Develop and prepare financial plan

FNSFPLN504A 50 Implement financial plan

FNSFPLN505A 60 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 organisationwhere ASIC Tier 1 compliance is vital to their daily operations. It relates to those involved in the application of interpersonal, needs analysis, advisory and customer service skills to the provision of advice to clients in a specFinancial Services Industry area.

A range of organisations were consulted to ensure that the learning and assessment strategy for the ASIC Tier 1short Course will meet their organisation’s training and development requirements.

Further information regarding the ongoing relevance and adequacy of the program comes from the EnterpriseProfiles discussed in the following section on ‘Identification of Organisation & Learner needs’.

Identification of Organisation & Learner needs

Orion will consult with each organisation’s high level management in order to determine their needs and thus the needof the learner. These needs are documented in an Enterprise Profile.

Specific individual Learner needs will be determined using Orion’s Qualification Pre-assessment Form, Language,Literacy & Numeracy Indicator and through further consultation between the learner and the Trainer from Orion.



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Customisation

Orion seeks to form a partnership with each organisation. Therefore, the customisation of Learning and

Assessment Strategy will occur prior to delivery of training and will incorporate the organisation’s

specific products, technologies and systems. Students, in consultation with Orion and their employer,

will be advised on the range of electives they can choose that will meet both learning needs and the

organisation’s strategies. 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.

1. Recognition of Prior Learning (RPL)

Students who consider that they are already competent in one or more of the Units of Competence in this qualificationhave the right to have that competency recognised without participating in a learning process. This pathway requires tstudent to demonstrate current competence or provide evidence of prior learning, including prior completion of units ocompetency included in the qualification for which Credit Transfer can be granted. Students are supported throughouthe process by Orion staff.

2. Work-based Training and Assessment

Following the offer of, or participation in the RPL option, students who require further training and assessment wundertake the Work-based Training and Assessment pathway. This pathway involves students completing workrelated training and assessment activities through one of the modes outlined in the following section. All work-based training and assessment combines face to face or computer-based training with self-paced activities toreinforce learning.

Delivery and Assessment Arrangements

1. RPL

All students are offered the option of RPL through all or part of the qualification. 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 suitablfor their needs.

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 - 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.

Portfolio – Students wishing to apply for RPL in a portfolio mode are issued with the document ‘How to apply forRecognition of Prior Learning (RPL)’ .

Students may compile evidence in the form of copies of certificates, work examples, letters etc. This technique isparticularly useful for those participants with existing skills who are located in regional areas where they may havelimited opportunity for face-to-face contact with trainers and assessors. Evidence is verified by the through a verbalquestioning process via a face-to-face or telephone interview.

Alternatively, students may arrange for observation and recognition of workplace performance through employertestimonials or work appraisals or through assessor observation. This technique allows students to collect directevidence where no other documentation is available or to provide further evidence to support other hard copydocumentation. This is frequently preferred by those who have limited previous exposure to education and training owho prefer (often due to LL&N or time constraints) to demonstrate rather than document skills and knowledge.

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. A typicalAssessment Centre involves the participants undertaking a series of simulated work activities. Their performance isviewed by a number of observers who assess their behaviour and skills against key competencies. This technique is



6 of 7assess a broad range of skills and behaviours that may be applicable to other work settings outside those in which theyusually participate.

Resources:

Portfolio:

The document ‘How to apply for Recognition of Prior Learning (RPL)’ provides an easy to follow step-by-stepguide for the application process and includes examples of the types of evidence to be collected.

Once units of competency to be assessed have been selected, a Marking Record Book outlining performance

criteria for each unit of competency is supplied to the student to guide them in collecting evidence. Also included in the Marking Record Book are suggestions of types of evidence specific to that unit that can be

collected, as well as the questions that will be used by the assessor to verify competency.

Learner guides for individual units of competency containing guidelines for collecting evidence for a portfolio calso be provided to students where appropriate.

Each student is assigned an assessor who will be available to support them through the entire process andaddress any special needs.

Assessment Centre:

A pre-assessment kit will be provided to all applicants outlining the assessment centre process and anydocumentation 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 beingassessed.

2. 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, a Trainer from Orion (specialising in Financial Services) consults with both the student and their employer todiscuss the desired workplace outcomes.

Step 2 – The student’s learning needs and abilities are determined through discussion and using Orion’sQualification Pre-assessment Form and LL&N Indicator.

Step 3 – A Training Plan is drawn up in consultation with the student, their supervisor and the Trainer. Electiveare chosen according to:

o the student’s interestso organisational needso workplace capacityo 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 assessmeor training provided

Step 6 - 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.

This delivery mode will include a combination of one-on-one trainer led theory sessions and self-paced practical activitto reinforce the student’s learning. Students will be allocated a certain amount of time in between trainer visits tocomplete each of the practical activities. This time will depend on the student’s ability and workplace influences and wbe scheduled prior to the commencement of training delivery. Anticipated assessment dates will also be scheduled prto the commencement of training, but will remain flexible according to the student’s progress.

Resources, Facilities and Equipment:

For each unit of competency, students are provided with a learner guide which contains information andactivities relating to the unit.

Each student will also be provided with a Marking Record Book outlining the activities to be completed forassessment and a breakdown of the performance criteria to be met in order to be deemed competent.

In addition, the student should have access to a workplace mentor or supervisor who has the experience in th

work relevant to the competencies and who can offer supervision and moderation to the learning. Students will need access to facilities in the workplace, such as a Computer (PC) and software packages, relate

to workplace learning outcomes (this will vary from organisation to organisation depending on the operations)



7 of 7Sheet for each unit of competency).

** NB where facilities and equipment are not available a simulated environment will be created using Orion’s facilities.

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 fromcolleagues and supervisors.

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 integratethe skills learned through training into workplace practice by completing workplace based activities andprojects.

The training and assessment activities may be repeated as necessary until the student has gained theskills, knowledge and experience essential for competence. Students will be given feedback whilst workthrough the relevant competencies to ensure that they have the greatest chance of success.

Assessment of practical skills will occur after the completion of the student’s training activities.Assessment of component goals will be clustered into a project wherever possible and the assessmentconditions shall be consistent with the delivery methods chosen. Under no circumstances will theassessment be conducted in a way that does not require the student to demonstrate the skills outlined ithe provided development and assessment guides.

Duration:

The actual duration for each trainee will be negotiated in the first training session and a Training Plan outlining ttraining schedule agreed upon by the student, employer and trainer will be signed off.

The controlling factor in determining duration is not time spent in training but the readiness of the student todemonstrate the targeted competency dependant on the skills and knowledge already acquired, learning style,the organisation needs and the complexity of each unit of competency. As such, the training plan will remainflexible according to the progress of the student.

Training Schedule:



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Scheduled Date Induction visit To be covered at this visit:

____ / ____ / ______

Induction and Compilation of Training Plan

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, 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, obligations and procedures has been received.

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,L& N tool)

Student signature: ___________________________________________________ Date: ______________________

Student name: ___________________________________________________

Supervisor signature: ________________________________________________ Date: _____________________

Supervisor name: ________________________________________________

Trainer signature: ____________________________________________________ Date: ______________________

Trainer name: ____________________________________________________

Trainer to return the following to Orion: □ Copy of signed Training Plan □ Completed Client & Student forms

Scheduled Date Units to be assessed Units to be trained Delivery method Office signoff (initial & date)

Training Session Two

____ / ____ / ______

__________________

__________________

__________________

__________________

__________________

__________________

__________________

__________________

__________________

______________

______________

______________

Actual visit date: __________________________ Duration of visit: ________________________________

Actual units trained at this visit: Actual units assessed at this visit:Outcome of assessment

RPL/CT C NYC

Reasons for any variations to schedule:

Version 1.02 November 20



9 of 7 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 madeto the training schedule.

Student signature: ______________________________________________________ Date: ___________________

Supervisor signature: ___________________________________________________ Date: ___________________

Trainer signature: _______________________________________________________ Date: ___________________

Trainer and/or supervisor comments (optional):

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.

Date(s) of contact(s):__________________________________________

Method of contact: □ Email (submit copy to Orion) □ Phone call (please attach details of discussion)

Scheduled Date Units to be assessed Units to be trained Delivery methodOffice signoff

(initial & date)

Training Session Three

____ / ____ / ______

__________________

__________________

__________________

__________________

__________________

__________________

__________________

__________________

__________________

______________

______________

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Actual units trained at this visit: Actual units assessed at this visit:Outcome of assessment

RPL/CT C NYC





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Student comments ( must be completed each visit):







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.

Date(s) of contact(s):__________________________________________

Method of contact: □ Email (submit copy to Orion) □ Phone call (please attach details of discussion)

Scheduled Date Units to be assessed Units to be trained Delivery methodOffice signoff

(initial & date)

Training SessionFour

____ / ____ / ______

__________________

__________________

__________________

__________________

__________________

__________________

__________________

__________________

__________________

______________

______________

______________


Actual units trained at this visit: Actual units assessed at this visit:Outcome of assessmentRPL/CT C NYC




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Student comments ( must be completed each visit):







Trainer to return the following to Orion: □ Copy of this page □ Marking Record Sheets □ Assessment

activities/ evidence




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Evidence Gathering Techniques:

A range of the following techniques will be used to gather evidence for each unit of competency in line with learner guidactivities allocated for assessment and the units of competency selected by the student.

A QuestioningB Observation

C Case Study

D Written activityE Role Play

F Work-based project

G Portfolio

Validation of Assessment

The principles of reliability, flexibility, fairness and practicality will be followed when conducting any assessment o

gathering evidence, and will be the benchmarks for the ongoing review of the assessment system. 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. Further details can befound in policies PP026 and PP021.

Prior to the assessment, the assessor will make the student aware of what will be assessed and the process of theassessment. The individual being assessed will also be made aware of Orion Training and PerformanceManagement’s appeals process in case they feel they have been unfairly assessed.

Delivery and Assessment Staff

Staff member

Competency of Staff

Technical Train/ Assess

1. Ross Swan2. Val Phinn

Vocational competency andqualifications are kept in their

individual HR files

Both hold a Certificate IV inAssessment and Workplace

Training

Infrastructure (a tick indicates that Orion has the required infrastructure)

All staff (including full time, 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, including the appropriate units of competency, assessment guidelines and qualification structure.

All staff (including full time, part time and casual staff) involved in delivering the program have access to trainer,assessor and candidate support materials relevant to their areas of delivery and assessment.

All assessors have access to print and electronic copies of the assessment tools used in this program.

The RTO has access to staff and training/assessment resources to meet the requirements of candidates with specianeeds and has an assessment process that incorporates reasonable adjustment procedures.

The RTO has reviewed the equipment and facility requirements for each unit of competency in the qualification andguarantees it has access to the plant and equipment needed to implement the program.

Training and Employment Pathways

Those completing the appropriate ASIC electives will also be able to provide advice at Tier 1 level. The ASIC Tier 1 ShortCourse provides a foundation for completing the Diploma of Financial Services.




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PART I

IDENTIFY CLIENT

NEEDS

RISK ASSESSMENT




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INDENTIFY AND ANALYSE

In developing a client needs analysis and riskassessment strategies, obtaining accurateinformation from the very beginning is crucial, todeveloping a suitable Insurance Programme for a

client.

You should not rely on the questions asked on aproposal form.

An accurate and extensive Risk Assessment andanalysis will form the basis for the RiskManagement strategies you will recommend andthe monitoring and review Programme, youestablish for your client.

A Client Need Analysis and Risk Assessment toolcontaining a number of basic factors are includedin this guide., you may consider using thisassessment tool, or one your Company may have,when planning your Analysis and Risk AssessmentProfile.

This list is not exhaustive as variables and other items of information will be required dependant oneach circumstance.

Based on your Clients Needs Analysis and Risk Assessment you can now look to the mostappropriate Insurers and products on offer.

Presenting to the Insurer

Underwriter’s guidelines and criteria will vary basedon their risk factors and assessment tools.

It is critical that you have that all of the facts are

obtained from your client.

Consider the following – you believe you haveobtained all the necessary information, sourced asuitable insurer and product, recommended theseto a client. The client is pleased with your recommendation and wishes to place cover,he/she then informs you that they stores goods inthe open air.The insurer will not extend cover to goods in theopen air. You are then left in an extremely

invidious position.

One Underwriter may be prepared to writebusiness on a particular risk, for example a ServiceStation, whereas another Underwriter may not as itfalls outside their underwriting guidelines.

Present all of the factual and relevant informationpossible, this allows the Insurer to have a true andaccurate picture of the risk and avoids anypotential conflict, at a later date. Non-disclosure

to an insurer about a risk, can result in a claimdeclinature.

Provide the Insurer with the timeframe in which yourequire their submission back.

Making a decision

In making your decision you must consider all thefactors that may effect your client now and in thefuture, particularly if your client is looking to expand

or change his business activities.




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Client Analysis

Occupation of your client

Complete list of all assets.

Business Structure:

• Sole Trader

• Partnership

• Public or Private Company

• Club etc.

Number of Directors, Partners, Members, 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.e. casuals to permanent ratio.

Level of staff turnover

Health, safety, harassment, smoking policies etc in place.

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




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CLIENTS NEEDS ANALYSIS (continued)

Previous Claims History includingincidences of loss which have notbeen claimed

The effect of a major catastropheon your client’s business.

Do they have a plan in the eventof a catastrophe?

Do they have an IT Plan?

The level of loss your client believesis sustainable.

Fines or Penalties incurred.

Is there business activities likely to have an impact on theenvironment?

Are staff required to complete incident reports – is this processmonitored?

Plans for future expansion or changes in current businessactivities.

Contracts, leases or held harmless agreements in place.

Do they Contract or sub-contract or employ Contractor,Sub-contractors?

Do they have existing insurance cover?

Are the covers adequate?

Are the sums insured adequate?




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Risk Assessment

Level of hazard associated with his occupation eg high hazardfibreglass manufacturing or low hazard, office risk.

Location of premises: - Are the premises?

1. unoccupied

2. near or next high hazard industry

3. near a natural water course

4. has the area experienced any flooding?

5. is there ready access to a fire hydrant and town waters?

6. ready access to a security service

Construction of the building: -Is the building constructed of?:

1. Massive construction i.e. brick, concrete, fire retardantmaterial

2. Inferior construction

3. Does the building contain any asbestos; Refrigerant Panel.

Do they store:-

Materials – highly combustible/hazardouscombustible

low combustiblenon combustible.

Age of the building

Has building been rewired and re-plumbed?

Size of the building

Number of storeys




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Number of buildings

Fences, Signs and other improvements.

Fire Protection:Is there:

1. Automatic sprinklers

2. Fire Alarms

3. Hydrants

4. Hose Reels

5. Extinguishers

Does the business have:

1. Deep frying

2. Extractors cleaned – how often?

3. Flu cleaned – how often?

Security on the premises:

1. Is there an alarm system?

2. What type? Securitel, Landline etc.

3. Windows Bars or Mesh/Internal Keylocks

4. Ram raid barriers

5. Security company patrols

6. Security fence

7. Closed circuit TV

8. Is cash kept on the premises?




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9. Is there a safe – is the cash held in this safe overnight or left unsecured?

Type of contents, plant or machinery on the premises.

1. Age of the plant and machinery

2. Hazards associated with the plant and machinery.

3. How often is the equipment maintained?

4. Availability of parts and equipment in Australia?

5. Does your client have portable equipment or machineswhich may be used away from the premises?

6. Do they have a maintenance agreement with a Computer specialist?

7. Equipment service warranties or agreements in place.

8. Are plant, machinery, contents or stockleft 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, from andhow?

Are goods held in physical/legal control?

Do you test drive vehicles?

Contracts, leases or agreements in place in relation to thetransport of these goods.

Are there formalised guidelines and plans in place in the event of Product Recall/Tamper?




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In relation to Motor Vehicles.

1. Are drivers required to complete and sign driver’sdeclarations?

2. Are drivers required to undertake driver safety training?

3. Are drivers all over the age of 25 years with a minimum of 2years experience?

4. Are drivers all licensed that the particular type of vehicle?

5. Do all drivers have a clean license driving and claimshistory.?

6. Radius of operation of the vehicles

7. Do they carry dangerous goods?

8. What type and quantity of dangerous goods.

9. Where are the vehicles garaged?

10. Do they provide storage of the goods? If so what type andquantity.

Additional information in relation to the Farming Sector.

1. Type of activity carried on.

2. Are there any host farming activities?

3. Is there Ground spraying or aerial spraying?

4. Is there an air landing strip?




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Possible influences and information you may consider in respect to the Insurer and the Products:

INSURER PRODUCTS

Is the Insurer on your Brokers Panelof approved Insurers?

Is the Insurer registered in Australiaas an approved Insurer?

Financial status of the Insurer (this information is available on

Standards and Poor Rating Guide)

Insurers philosophy in respect tounderwriting of risks.

Underwriting Department Service

Claims Service

Ongoing Service - Risk Management specialiststhey may engage to assist .

Extent of cover offered – is the cover most suitableto the risk.

What alternative covers are available.

How limited is the market in respect tothe type of risk.

Additional Policy Endorsements

Additional Policy Exclusions

Policy excesses

Premium competitive




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PART II

SUBMISSION TO CLIENT

RISK MANAGEMENT

MONITOR AND REVIEW

SAMPLE REPORT




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Provide a submission to a client:

When preparing a submission it is essential that youhave taken clear concise notes of the potentialclients instructions, however you should alsoconsider what the potential client has not told you.

When providing a submission it is imperative thatyou outline in clear unambiguous language thefollowing to a client:

• Reconfirm to the client their instructions;

• Ensure you are familiar with the products,extensions and exclusions.

• Provide recommendations on insurance

products and risk management strategies;

• Remind your client of their duty of disclosure;

• Confirm to the client the details, terms andconditions of the products offered;

• Explain your reasons for the selection of these products and the insurer;

• Outline any remuneration (fees, commission

etc you will receive);

• Outline clearly any conflicts of interests or potential conflicts of interests that may existbetween you and the recommended insurer;

• The claims services your company provides;

• Outline any additional requirements i.e.building surveys;

• Outline any risk management strategies youmay have discussed;

• Suggest a suitable time frame for ongoingmonitoring of their needs;

• Obtain a letter of appointment/engagement.

Presenting to your client.

When preparing a submission to your client youshould ensure that the reportis written in such a manner that your client clearlyunderstands it.

The best method to achieve this is to structure yoursubmission and divide into sections. This mayinclude:

A Title Page: An outline of your submission

Introduction: A brief summary of your Brokerage and businessProfile

Overview : Brief summary of your analysiof your clients needs andexpectations.

Body of Report: Your recommendations.Basis of recommendations

Cover, Insurers, PremiumRisk Management strategies

Conclusion: Recommended Service Plan.

A sample report has been included as anappendice




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RISK MANAGEMENT STRATEGIES

Developing Risk Management strategies will largelydepend on the type and nature of the business, it’scomplexity and the risk factors.

The aim of risk management:

To identify the risks and hazards, which may impacton the financial viability of a business or individualand their objectives.Potential affects of loss exposure to these

risks/hazards may include:

• Personal injury/disease.

• Property Loss

• Theft Loss including embezzlement andemployee theft

• Consequential Loss (indirect) i.e. removal of debris, demolition costs etc

• Business Interruption i.e loss of profits,additional working costs

•

Liability Loss

For insurance purposes using your risk assessmentanalysis will help you determine the potential riskexposure.

Risk Assessment is not just about insurance riskexposure and may require expert opinion. Part of your strategies for a complex risk may be toarrange for a specialist Risk Manager to assess the

risk and develop a suitable plan.

Before developing your strategies further youshould consult with your client in respect to their budget constraints. A balance should exist andyour client may elect to self-insure some risks.

MONITOR AND REVIEW

Monitoring and reviewing a Client’s Portfolio is anextremely important part of providing a professionaservice to your client. From the first phone call, amonitoring plan should be in place. Your brokeragemay already have a well established monitoring plausing established reporting systems and set down itheir guidelines.

Establishing our often you should contact a clientshould not be dependant purely on the amount of

premium that is paid, but should be weighted similato the weighting given to an Insurer and taking intoconsideration facts collected during the initial clientand risk analysis.

For example - if you are aware of certain facts,your client may be under-insured, or may be inthe process of expanding the business. Youwould consider additional contact dates for review.

An initial service plan may include the following

1. Date client contacts:

2. Date by which client requires submission:

3. Date sent to Insurers:

4. Date followed up with Insurers:

5. Date of submission to client:

6. Date of follow up with client:

7. Dates for implementing changes and furtherclient discussions.

8. Date of acceptance by client.




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9. Date of cover request to Insurer.

Return of documents plan:

Prepare a checklist of documents required to be sentto insured and to be completed and returned by theinsured.

• Letter confirming cover and ongoingservice plan.

• Confirmation checklist of covers andoptions not selected by client.

• Invoices and schedules

• Policy Wording/PDS

• FSG

• Letter of engagement

• Proposal forms

• Premium Funding forms

• Others as required.

Follow up Diary:

1. Date documents sent to client for completion:

2. Date documents required by :

3. Date of follow up with client.

4. Date of cover note extension with insurer if required.

Submission of documentation to insurer andreturn of insurers documentation plan:

1. Date Proposal form sent to insurer:

2. Date Funding forms sent to PremiumFunding Company

3. Date Policy Document is required by:

Ongoing monitoring plan

Your client’s new business has been finalized – youshould now put into place the ongoing review planyou initially discussed with your client.

This may include:

• First review shortly after completed of New

Business to ensure there are no changes tobe made.

• Second review after 6 months includingclaims loss review.

• Third review 4 to 6 weeks prior to renewal.

• Final review – submission of renewal offer.

Once again the number of times you contact a clienwill be dependant on the analysis you made of hisneeds.

REVIEW SERVICE PERFORMANCE

As an Account Manager you have an obligation toensure your portfolio of business operates smoothlyand effectively. A regular audit of your portfoliomay identify certain areas requiring attention.

For example you may find during a review of your sales/retention rate figures that you are losing anumber of clients. By completing an analysis youmay find that it is related to a particular insurer or product. The insurer’s product may no longer becompetitive in the market place.

Alternatively you may find that a particular Insurer you are using is incurring a significant number of claims from your portfolio of business. This could




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4. Date Policy Document/Schedule received,checked and issued to client.

5. Date payments are received and remitted tothe underwriter.

result in problems at renewal date, the insurer maybe reluctant to provide competitive terms. A reviewof the claims may establish a pattern which youcan then discuss with your clients.

Sample Report – The following is for demonstration uses only and should not be used in agenuine situation. Covers may vary and not all covers are noted.

Submissions should be completed as required by your Company’s office procedures and guidelines.

INSURANCE PORTFOLIO SUBMISSION

PREPARED FOR

XYZ COMPANY1 JOHNS STREET

JOHNSVILLE

BY

JOHN SMITHCOMMERCIAL ACCOUNT MANAGER

ABC INSURANCE BROKERS PTY LTD




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INTRODUCTION

ABC Insurance Brokers Pty Ltd has been in operation for 20 years. We offer a full range of commercial anddomestic insurance products and have access to specialized markets. Our dedicated staff are experienced and are committed to providing professional service, etc

OVERVIEW

This report has been compiled based on the information and analysis of the information you have providedto us. You operate a Business Consultancy, the premises you occupy are leased under a formal leaseagreement. You employ 5 staff. Your current lease agreement requires you to maintain Glass cover.Security to your office is double dead lock on your doors.

You current insurance cover sums insured are as follows:

Description of Risk Sum InsuredFire and Perils cover only Contents of Office situated at 1 Bardon Street, JonesvilleComputer and electronic equipment

Broadform Liability Cover

Glass Breakage

$ 100,000$ 10,000

$5,000,000

Replacement




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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 ,Lightning , Aircraft , Explosion , Riot, civil commotion, malicious damage, Impact of vehicle,Bursting/overflowing of water systems, Rainwater, Accidental Damage, Removal of Debris, Extra costs of reinstatement etc.

Business Interruption A reduction in turnover following accidental insured damage to a commercial premises, may result in loss net profit for the company. The policy is designed to protect this loss of income and will meet continuingpayroll costs and the additional expenditure incurred for the purpose of reducing the loss of income.

General Liability – Public / Products LiabilityMaintain this cover and consider increasing the sum insured to $10million.

BurglaryProtects you for loss of assets following violent and forcible entry to the premises.Policy extends to include damage to premises .

MoneyThis cover insures against money that is stolen from the premises. If required, the cover can extend tobusiness money taken home to a private residence. Money in transit to and from a bank that is stolen or lost is also included if required. You should note the limits that apply to cash held on premises after hours

Plate GlassMaintain cover as required.

Special RisksCovers your laptops and digital camera away from the premises. We recommend full accidental damagecover. Restricted cover is available.

Professional IndemnityIndividuals or companies providing professional advice to the public are exposed to actions against them fodamages for breaches of professional duty they owe to a client. Professional Indemnity insurance protects

against negligent acts, errors or omissions. Run-off cover should also be considered, this extension offersongoing protection following your retirement or cessation of business.

Sums insured.

We draw your attention to the co-insurance/average clause, which applies.We recommend that you review the sums insured in respect to your officecontents, to ensure that you are adequately covered for replacement value.




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Insurer.

ZYZ Insurer is a well established insurer registered to operate in Australia, theyhave a AAA Standards and Poor Rating, are premium and product competitive.etc.

Cover

Fire and Perils Cover:

Risk Sum Insured Insurer Premium ExcessContents $ 100,000

ZYZ Insurers $ 200.00

$250

Extensions of Cover:Cover is extended to include Flood.

Policy exclusions:

Burglary Cover:

Risk Sum Insured Insurer Premium ExcessContents $ 100,000

ZYZ Insurers $ 700.00

$250




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PART III

GLOSSARY OF INSURANCE PRODUCTS




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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. To keep up to date with changeswe recommend you keep up to date with market changes – various magazines such as the NIBA Gazette, Insurance Risk andProfessional Magazine, ANZIIF publications, insurers newsletters are a source.

AVIATION INSURANCETo insure damage to the aircraft and also to protectthe legal liability of the owner/operator/charterer inrespect of their legal liability to third parties (includingpassengers) for personal injury or property damagewhich arises from the operation of the aircraft.

BOILER/PRESSURE VESSEL EXPLOSIONThe insurance of vessels which are under internalpressure. These items are not usually insured under standard policies. The policy can insure damage tothe item itself plus Public Liability protection as well.

BONDSFinancial guarantees that are provided by an Insurer to a Principal who seeks comfort that monies areautomatically available in the event of non-performance by the insured party.

CANCELLATION AND ABANDONMENTProvides cover for the cancellation of an event andresultant loss of income, due

to adverse weather conditions, non-appearance of aperformer.

COMMERCIAL BUSINESS PACKInsurers use varying descriptions of ‘Package'arrangements that are designed to insure the usualrisk exposures of small to medium size businessoperations. These ‘Packages' may include thefollowing classes of risk:

Fire plus damage caused by:•

Storm and wind• Lightning

• Aircraft

• Explosion

• Riot, civil commotion, malicious damage

• Impact of vehicle

• Bursting/overflowing of water systems

• Rainwater

• Accidental Damage

Business Interruption A reduction in turnover following accidentalinsured damage, to a commercial premises mayresult in loss of net profit for the company. Thepolicy is designed to protect this loss of incomeand will meet continuing payroll costs and theadditional expenditure incurred for the purpose oreducing the loss of income.

General Liability – Public / Products LiabilityThis type of policy protects the insured's liabilityat law to pay compensation for negligent actsthat result in property damage or personal injuryto members of the public.

The policy also protects the insureds liability for damages in respect of injury or damage causedby any of the Products that they may sell or manufacture.Defence costs are also included.

BurglaryProtects the insured for loss of assets following

violent and forcible entry to the premises.

MoneyThis cover insures against money that is stolenfrom the premises. If required, the cover canextend to business money taken home to aprivate residence. Money in transit to and from abank that is stolen or lost is also included if required.

Plate Glass

Under this section the replacement cost of insured glass that is broken is paid for together with sign-writing costs if nominated.

Special RisksItems of special value, which may be used awayfrom the normal business address arespecifically nominated with individual valuesunder this section.




34 of 7Electronic EquipmentThe repair cost of sudden unforseen breakdown or damage of electronic equipment can be insured. Inaddition the policy can be extended to include thecost of restoring/replacing data and software wheremedia material has been damaged. The additionaloperating costs that are incurred following insured

damage to the equipment may also be included.

Machinery BreakdownImportant items of machinery can be insured againstsudden unforseen damage. This can also includeboilers or vessels under pressure. The policy can beextended to include resultant deterioration of refrigerated stock and increased costs of working.

Machinery Breakdown – Business InterruptionIf certain items of plant are critical to the

maintenance of the business turnover and anextended period of interruption would damageprofitability then this type of protection will need to beconsidered.

Fidelity / Employee FraudLosses to the business as a result of fraudulent actsor embezzlement by staff members are insured bythis section.

COMMERCIAL LEGAL EXPENSES

Insures legal costs and expenses in pursuit of alegal claim for damages or the defence of a claim,both of which result from an insured event (definedin the policy).

CONTRACT PENALTIES/LIQUIDATIONDAMAGESPolicy will pay for these financial penalties whichhave been imposed under contract and where thepenalty arises as a result of a specified riskoccurring.

CONTRACT WORKS A form of insurance designed specifically to protectagainst the types of risks that arise duringconstruction operations – domestic or civil.

CONTRACTORS PLANT AND MACHINERYCover provided for loss or damage to unregisteredmobile machinery, plant and equipment and the like.

CREDIT INSURANCEThe insurance by a company of the credit risk theyface as a result of non-payment by any of their debtors. The cover can be arranged to insureselected debtors or all debtors.

CROP INSURANCE

Insures the crop for Fire and Hail damage. Liabilityin respect to Ground Spraying and/or Aerial SprayDrift offered by some insurers.

DEFAMATION COVERProvides protection following libel and slander

DIFFERENCE IN CONDITIONS COVER (DIC): Apolicy that covers other perils not insured by basicproperty insurance contracts, supplemental to andexcluding the coverage provided by underlying

contracts.

DIRECTORS AND OFFICERS LIABILITYInsures the legal liability of Directors and Officers ofa company arising from wrongful acts (includingdefence costs but excluding fines and penalties),carried out in the course of their business activities.

The policy may insure claims arising pursuant to theTrade Practices Act 1974 and Fair Trading andsimilar consumer protection legislation, breach of

contract (other than professional services or advicelibel and slander and infringement of copyright,trademarks designs or patents. The policy does notinsure the “Company” other than reimbursement of any loss, which the Company may be required toreimburse to an Officer of the Company under thearticles of the Company.

EMPLOYMENT PRACTICES LIABILITYBusinesses are exposed to many and variedliabilities which may flow from employees who are

discriminated against, eg. wrongful dismissal, sexuaharassment.This policy protects these liabilities both of theemployer involved and of individual staff members. does not pay for fines imposed by the Court.

ENVIRONMENTAL IMPAIRMENT/POLLUTIONLIABILITY

A specialised form of liability insurance to protectagainst damage awards made against a company.




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FARM INSURANCEOffers protection for Farm Dwellings, Contents,Farm Property, Plant and Machinery, Farmimprovements, Theft, Motor vehicles, MachineryBreakdown, Business Interruption, Liability,Livestock and Transit.

HOME INSURANCECoverage available for your home, contents andpersonal valuables.

• Defined Events• Accidental Damage• Landlord Residential Coverage

INDUSTRIAL SPECIAL RISKSThis specialised policy is designed to insure major business enterprises with total insurable assets

usually in excess of $3 million and is tailored to meetthe individual needs of the client.

The policy protects against accidental physical lossor damage to the asset.

INFORMATION TECHNOLOGY LIABILITY A specialist form of liability insurance protection for companies or individuals who are involved in theinformation technology area. The policy protectsagainst ‘Business Injury' liability and/or ‘Personal

Injury' and ‘Property Damage' caused to thirdparties.

INTELLECTUAL PROPERTY COVERProtection against actions taken for breach of trademark, copyright etc.

KIDNAP & RANSOM INSURANCETo meet the costs involved in kidnap/ransomdemands and associated expenses.

LIVESTOCK AND BLOODSTOCKProvides cover loss of use and death of a studanimal.

MOTOR VEHICLE INSURANCE

MARINE INSURANCEThis class of insurance can encompass many areaincluding;

• 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 RISKProvides protection for loss or damage to vessels

during construction,testing, commissioning and delivery.

MEDICAL MALPRACTICE LIABILITY Actions, for compensatory damages by injuredpersons resulting from medical services provided bythe insured are protected by this form of policy.

MORTGAGEE PROTECTIONTwo 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 thelender but paid for by the Mortgagor.

ii. To protect the Mortgagee if the Mortgagor does not carry damage insurance on theproperty upon which the Mortgagee hasadvanced money.

A common example is in respect of moneyadvanced on Strata Title units. The policy is

usually arranged and paid for by theMortgagor.

STATUTORY LIABILITY - FINES & PENALTIESThis insurance product has been developed as a




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Coverage for Sedans, Trucks, Mobile Equipmentetc.

• 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 personsagainst loss of income if they are unable to work asa result of an accident or illness. The policy willusually include ‘lump sum' payments for accidentaldeath or loss of hands, feet, eyes, etc.

POLITICAL RISK - CONFISCATION OREXPROPRIATIONInsurance protection purchased by companies who

operate outside Australia in countries that arepolitically unstable. A specialised insurance area.

PRODUCT RECALLCovers the cost of physical recall of faulty productsor their destruction and the expenses associatedwith the recall.

PRODUCT TAMPERTo insure the losses incurred as a result of malicioustamper to a product or the threat of tamper which is

a hoax.

PROFESSIONAL INDEMNITYIndividuals or companies providing professionaladvice to the public are exposed to actions againstthem for damages for breaches of professional dutythey owe to a client. Professional Indemnityinsurance protects against negligent acts, errors or omissions. It is also possible to effect a ProfessionalIndemnity ‘Civil Liability' policy which provides abroader form of protection than the basic

Professional Indemnity policy.

• Run-off cover

Offers on going protection following retirement or cessation of business.

result of the increasing tendency of Government anStatutory Bodies to impose fines and monetarypenalties on companies, eg. Workplace Health andSafety Acts.

The policy will protect Directors, Officers andEmployees for innocent breaches of Commonwealt

and State Acts which result in a fine and theassociated defence costs.

STRATA TITLE PACKAGEStrata Title packages are designed to include manyof the risk exposures enumerated above under onepolicy for Body Corporate bodies.

SUPPLEMENTARY LEGAL EXPENSESThis cover is usually purchased in association withDirectors and Officers Liability policies.

Protects the insured organisation against the cost olegal expenses and fees incurred, which mayotherwise not be recoverable under a Directors &Officers Liability policy.

TAX PROBE/AUDITTo pay the costs incurred in employing anaccountant to provide information to theCommonwealth and/or State Tax Office as a resultof a tax audit.

TRAVELWhen travelling overseas or within Australia , thistype of policy can be effected to protect a range of risks the traveller may face.

TRUSTEES LIABILITYTrustees of a trust are exposed to negligence claimagainst 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 theprimary limit of liability is exhausted or if a specificexclusion in the primary policy excludes cover andwhich the ‘Umbrella' policy does not exclude fromcover.

WORKERS COMPENSATION




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Each State of Australia requires employers of labouto effect a policy of insurance to protect their liabilities as set our in each Workers Compensation

Act. 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.




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PART IV

GLOSSARY OF INSURANCE TERMS




39 of 7GLOSSARY OF INSURANCE TERMS Acknowledgement: ICA www.ica.com.au

Accident: An event or occurrence which isunforeseen and unintended.

APRA - Australian Prudential RegulationAuthority: A statutory authority established on the

1st July 1998. APRA is responsible for theprudential regulation of the financial sector. APRAtook over the roles of the previous insuranceregulator, the Insurance & SuperannuationCommission (ISC). APRA administers the Insurance

Act 1973 and is responsible for the authorising of insurers. APRA Standards

APRA regulates general insurers through a series of Prudential Regulatory Standards. These arestandards covering minimum capital requirement,valuation of liabilities, risk management strategy,

reinsurance management strategy and others.

ASIC - Australian Securities and InvestmentsCommission: A statutory authority established onthe 1st July 1998. ASIC is responsible for consumer protection legislation and administers the InsuranceContracts Act 1984, Insurance (Agents & Brokers)

Act 1984, and Codes of Practice. The consumer protection provisions of Part V of the TradePractices Act 1974 have to a large extent beenreplicated

in the ASIC Act 1998 and it is ASIC, rather than the ACCC, that monitors compliance by insurers withtrade practices legalisation. ASIC is responsible for the registration of brokers. Australian FinancialServices Licensee (AFSL)

A business that provides a “financial service” mustbe licensed under Chapter 7 of the Corporations

Act 2001. This includes businesses that providefinancial 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 aparticular insurance produce) and businesses thatdeal in a financial product (such as insurers andagents who issue insurance and also intermediarieswho arrange for a person to acquire insurance).

Authorised Representative: A person who isauthorised to provide financial services on behalf of an AFSL. See AFSLI.

Assessor/Adjuster : A person who investigates ansettles losses for an insurance carrier.

Age Limits: Stipulated minimum and maximumages below and above which the company will not

accept applications or may not renew policies.

Aggregate Deductible: Deductible in someinsurance contracts in which all covered lossesduring a year are added together and the insurer pays only when the aggregate deductible amount isexceeded. Assignment: The legal transfer of one person'sinterest in an insurance policy to another person.

Automatic Reinsurance: An agreement that theinsurer must cede and the reinsurer must accept alrisks within certain explicitly defined limits. Thereinsurer undertakes in advance to grantreinsurance to the extent specified in the agreemenin every case where the ceding company acceptsthe application and retains its own limit.

Binder: An authority given by an insurer to aninsurance intermediary authorising the intermediaryto enter into contracts on behalf of the insurer as itsagent.

Binding Authority: The particular terms andauthorities granted to an intermediary by an insurerunder a binder arrangement.

Burning Cost : A method of calculating premiumbased on the insured's claims experience plus

loading for expenses and profit.

Capacity: The amount of capital available to an

insurance company or to the industry as a whole founderwriting general insurance coverage or coverage for specific perils; or

Capacity: The maximum amount of insurancethat can prudently be accepted by an insurer,either at a particular location or in a particular geographical area, having regard to the insurertotal liabilities under its policies and itsreinsurance protection. It is the measure of an




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Certificate of currency: Documentary evidencethat an insurance contract is current. Brief details of the extent of cover and the parties to the contractare provided. Usually requested by financiers toconfirm that their interests are noted, and that thepolicy is current.

Catastrophe: Event which causes a loss of extraordinary magnitude, such as a cyclone,earthquake.

Cede: To transfer all or part of a risk written by aninsurer (the ceding, or primary company) to areinsurer.

Cession: Amount of the insurance ceded to areinsurer by the original insuring company in a

reinsurance operation.

Claims Made/Claims Manifesting/Claimsoccurring: A 'claims made and notified' policyrequires all claims and any fact, situation or circumstance that results in a claim, to be notified tothe Insurer within the Period of Insurance. Theactual mistake could occur at any time, if there isretrospective cover, or otherwise it must occur during the Period of Insurance. The Insured must nothave had any prior knowledge of the fact, situation

or circumstance before the Period of Insurance. Inan "occurrence" wording (as for Public Liability policywordings), the circumstance must occur during thePeriod of Insurance whilst the notification of thisevent can occur at any time subsequently.Examples of Claims Made Policies are ProfessionalIndemnity and Directors and Officers Liability.

Class Rating: Rate-making method in which similar insureds are placed in the same underwriting classand each is charged the same rate. Also called

manual rating.

Co-insurance/Average: A penalty clausecontained within a policy that requires the insured tobear a proportion of a loss when the sum insured or asset value is not equivalent to the actual value of the insured asset, ie. Under Insurance. Some typesof policies allow a certain amount of under insurancebefore the penalty clause operates.

insurer's ability to absorb risk.Costs Inclusive Excess: The amount of excessthe insured must pay towards the legal and defencecosts.

Costs Exclusive Excess: The Insured does notpay any excess towards the legal and defence cost

but only pays the amount of the Excess towards thesettlement of any Claim.

Cross Liability: A clause sometimes included inPublic Liability policies which allows joint insureds totake action against each other and still obtain thebenefit of the policy to protect each party as if theyhad a separate policy.

Concealment: Deliberate failure of an applicant forinsurance to reveal a material fact to the insurer.

Concurrent Causation: Legal doctrine that stateswhen a property loss is due to two causes, one thatis excluded and one that is covered, the policyprovides coverage.

Conditions: Provisions inserted in an insurancecontract that qualify or place limitations on theinsurer's promise to perform.

Consequential Loss: Financial loss occurring as

the consequence of some other loss. Often called aindirect loss.

Contingent Liability: Liability arising out of workdone by independent contractors for acompany/business, which may arise in the future.

Contract: A binding agreement between two or more parties for the doing or not doing of certainthings. A contract of insurance is embodied in awritten document called the policy.

Contractual Liability: Legal liability of another partthat the business agrees to assume by a written or oral contract.

Contribution by Equal Shares: Type of other insurance provision often found in liability insurancecontracts that requires each company to shareequally in the loss until the share of each insurer equals the lowest limit of liability under any policy or




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Contributory: A group insurance plan issued to anemployer under which both the employer andemployee contribute to the cost of the plan. Seventy-five percent of the eligible employees must beinsured.

Contributory Negligence: Negligence of thedamaged person that helped to cause the accident.Some states bar recovery to the plaintiff if the plaintiff was contributory negligent to any extent. Othersapply comparative negligence.

Coverage: The scope of protection provided under a contract of insurance; any of several risks coveredby a policy.

Declarations: Statements in an insurance contract

that provide information about the property or life tobe insured and used for underwriting and ratingpurposes and identification of the property or life tobe insured.

Depreciation: A decrease in the value of propertyover a period of time due to wear and tear or obsolescence. Depreciation is used to determine theactual cash value of property at time of loss.

Direct Loss: Financial loss that results directly from

an insured peril.

Disability: a physical or a mental impairment thatsubstantially limits one or more major life activities of an individual. It may be partial or total. (See PartialDisability; Total Disability.)

Disability Benefit: Periodic payments, usuallymonthly, payable to participants under someretirement plans, if such participants are eligible for the benefits and become totally and permanently

disabled prior to the normal retirement date.

Disposable Personal Income: The personalincome less personal tax and nontax payments. It isthe income available to people for spending andsaving.

Domestic Insurer: An insurance company is adomestic company in the state in which it isincorporated.

until the full amount of loss is paid.Driver Education Credit: Student discount or reduction in premium amount for which youngdrivers become eligible on completion of a driver education course.

Earned Income: Employment income derived from

salary, wages, commissions, or fees.

Economic Loss: The estimated total cost, bothinsured and uninsured, of mishaps (such as motor vehicle accidents, work accidents, and fires);includes such factors as property damage, funeralexpenses, wage loss, insurance administrationcosts, and medical, hospital and legal costs.

Effective Date: The date on which the insuranceunder a policy begins.

Elements of a Negligent Act: Four elements aninjured person must show to prove negligence:existence of a legal duty to use reasonable care,failure to perform that duty, damages or injury to theclaimant, and proximate cause relationship betweenthe negligent act and the infliction of damages.

Embezzlement: Fraudulent use or taking of another's property or money which has beenentrusted to one's care.

Endorsements: An additional piece of paper, not apart of the original contract, which cites certain termand which, when attached to the original contract,becomes a legal part of that contract.

Endorsement: An amendment of the policy.

Estoppel: Legal doctrine that prevents a personfrom denying the truth of a previous representationof fact, especially when such representation has

been relied on by the one to whom the statementwas made.

Excess/ Deductible: An amount, which apolicyholder agrees to pay, per claim or per accidentoward the total amount of an insured loss.

Extra Costs of Reinstatement: Additional coststhat my be imposed by changes in Government or Council regulations which were not in force when th




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Exclusions: Specific conditions or circumstanceslisted in the policy for which the policy will notprovide benefit payments.

Exclusion or Exception: Specified conditions or

circumstances, listed in the policy, for which thepolicy will not provide benefits.

Ex gratia payment: A payment made by an insurer to a claimant as an act of grace, where nocontractual entitlement to the claim exists. Theinsurer decides to pay in order to maintain goodwill,public relations, or as a matter of social justice or some other non-contractual reason. Reinsurers arenot obliged to pay for ex gratia claims but mayspecifically agree to do so under the "follow the

fortunes" clause.

Expense ratio: The portion of premium used topay all costs of acquiring, writing and servicinginsurance and reinsurance, usually expressed as apercentage of net written premium.

Expiry date: The date on which a policy ends.Conventionally, 4.00pm is the normal time of expiry,although this varies under certain types of policy,e.g. reinsurance contracts, marine contracts. Some

insurers have opted for a midnight expiry time.

Experience Refund: A provision in most grouppolicies for the return of premium to the policyholder because of lower than anticipated claims.

Exposure Unit: Unit of measurement used ininsurance pricing.

Extended Coverage Insurance: Protection for theinsured against property damage caused by

windstorm, hail, smoke, explosion, riot, riot attendinga strike, civil commotion, vehicle and aircraft. This isprovided in conjunction with the fire insurance policyand the various "package" policies.

Extended Reporting Period: An additional periodof time after policy expiration during which validclaims will be paid under a claims-made policy of liability insurance.

original asset was built or made.

Extortion: Surrender of property away from thepremises as a result of a threat to do bodily harm tothe named insured, relative, or invitee who is beingheld captive.

Facultative Reinsurance: A type of reinsurance inwhich the reinsurer can accept or reject any riskpresented by an insurance company seekingreinsurance.

Fiduciary: A person who holds something in trustfor another.

Fiduciary Duty: To act in good faith and in the besinterests of the client and to disclose all facts whichmay affect their decision, including disclosing any

conflictsof interest. Fire Services Levy: A separate charge made byInsurers on certain classes of business that reflectsthe amount of cost imposed by Governments onInsurers for contribution to the funding of firebrigades. The levy will vary from State to State

Floaters: Insurance policies, that cover property thacan be moved from one location to another for both

transportation perils and perils affecting property at fixed location.

Foreign Insurer: An insurer is a foreign company iany state other than the one in which it isincorporated.

Fortuitous Loss: Unforeseen and unexpected lossthat occurs as a result of chance.

General Average: In ocean marine insurance, a

loss incurred for the common good that is shared byall parties to the venture.

General Damages: Damages awarded to an injureperson for intangible loss which cannot be measuredirectly by dollars. Popularly known as "pain andsuffering." General damages are distinguished fromspecial damages which are awarded for actualeconomic loss, such as medical costs, loss of income, etc.




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Extended Reporting Period Endorsement: Addedto a claims-made policy of liability insurance toprovide additional period of time during which validclaims will be paid.Gross Negligence: the intentional failure to performa manifest duty in reckless disregard of the

consequences as affecting the life or property of another.

Group Contract: A contract of insurance made withan employer or other entity that covers a group of persons identified as individuals by reference to their relationship to the entity.

Group Insurance: Insurance written on a number of people under a single master policy, issued to their employer or to an association with which they are

affiliated.

Guaranteed Renewable Contract: A contract thatthe insured person or entity has the right to continuein force by the timely payment of premiums for asubstantial period of time, during which period theinsurer has no right to make unilaterally any changein any provision of the contract, while the contract isin force, other than a change in the premium rate for classes of policyholders.

Guaranty Fund: A fund, derived from assessmentsagainst solvent insurance companies, to absorblosses of claimants against insolvent insurancecompanies.

Hard Market: That part of the insurance sales cyclein which competitive pricing is at a minimum ascompanies charge the premiums necessary to meettheir underwriting losses in order to avoid insolvencyand boost capacity; usually associated with a sharpdecline in capacity (see "Soft market").

Hazard: Condition that creates or increases thechance of loss.

Hold Harmless Clause: Clause written into acontract by which one party agrees to releaseanother party from all legal liability, such as a retailer who agrees to release the manufacturer from legalliability if the product injures someone.

Housekeeping: An important risk assessmentissue to underwriters. Housekeeping concerns anobjective assessment of the extent to which aninsured maintains the general cleanliness,appearance, utility and up-keep of premises. Poor housekeeping would be evidenced by excessive

accumulated rubbish, congestion in work areas,deferred maintenance and general untidiness. Suchsituations represent increased hazard.

Imputed Negligence: Case in which responsibilityfor damage can be transferred from the negligentparty to another person, such as an employer.

Incurred Claims: Incurred claims equal the claimspaid during the policy year plus the claim reservesas of the end of the policy year, minus the

corresponding reserves as of the beginning of thepolicy year. The difference between the year endand beginning of the year claim reserves is calledthe increase in reserves and may be added directlyto the paid claims to produce the incurred claims.

Incurred-but-not-reported (IBNR) reserves: liability account on an insurer's balance sheetreflecting claims that are expected based uponstatistical projections but which have not yet beenreported to the insurer.

Indemnification: Compensation to the victim of aloss, in whole or in part, by payment, repair, or replacement.

Indemnity: Legal principle that specifies an insuredshould not collect more than the actual cash value oa loss but should be restored to approximately thesame financial position as existed before the loss.

Insolvent: Having insufficient financial resources

(assets) to meet financial obligations (liabilities).

Insurable Interest : .A claimant must be able toestablish at time of loss that he or she had apecuniary or economic interest in the subject matterof insurance. This interest does not have to be aninterest recognised in law or in equity.




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Insurable Risk: The conditions that make a riskinsurable are (a) the peril insured against mustproduce a definite loss not under the control of theinsured, (b) there must be a large number of homogeneous exposures subject to the same perils,(c) the loss must be calculable and the cost of

insuring it must be economically feasible, (d) theperil must be unlikely to affect all insuredssimultaneously, and (e) the loss produced by a riskmust be definite and have a potential to befinancially serious.

Jurisdiction Limits: Refers to the fact that thepolicy will only cover claims brought within the courtsystem of the nominated countries. Territorial Limitrefers to the place where the act, error or omissionoccurs.

Joint-and-Several Liability: A legal principle thatpermits the injured party in a tort action to recover the entire amount of compensation due for injuriesfrom any tort feasor who is able to pay, regardless of the degree of that party's negligence.

Knock for knock agreement: An arrangementbetween motor vehicle insurers whereby eachagrees to pay for its own repair costs and will foregorecovery action against the other signatories

irrespective of questions of fault.

Layer : Non-proportional reinsurance programs areusually divided into a number of layers, which areoften placed with different reinsurers to facilitateplacement at the best terms for the reinsured. In theevent of loss the layers operate consecutively.Sometimes insured’s will purchase insurance inlayers. They may, for example, have a primaryliability cover and then purchase an additional layer of protection that sits on top of the primary layer.

This can be a more cost-effective method of obtaining the required level of cover than purchasingit from the ground up. Direct covers may also havelayers.

Limit or limit of liability: The maximum amount aninsurer will pay under a particular policy coverage.

Material fact: Any fact is material if the insuredknows that it is matter relevant to the decision of theinsurer whether to accept a risk and if so, on whatterms. A fact is also material if a reasonable personin the circumstances could be expected to know thamatter was so relevant.

Known Circumstance:Claims arising after the policy inception which arisefrom circumstances which the Insured knew (or should have known) at the time of the policyinception may give rise to a claim, are excluded. This because such claims are not fortuitous at the timeof entering into the insurance but, on the contrarythere is a real possibility that a claim may eventuate

Loss Avoidance: A risk management technique

whereby a situation or activity that may result in aloss for a firm is avoided or abandoned.

Loss control: any conscious action (or decision noto act) intended to reduce the frequency, severity, ounpredictability of accidental losses.

Loss Expense - Allocated: Handling expenses,such as legal or independent adjuster fees, paid byan insurance company in settling a claim, which canbe definitely charged to that particular claim.

Loss Expense - Unallocated: Salaries and other expenses incurred in connection with the operationof a claim department of an insurance carrier, whichcannot be charged to individual claims.

Loss Payable Clause: Means of protecting amortgagee's interest in property by directing theinsurer to make a loss payment to the mortgagee inthe event of a loss.

Loss Prevention: Any measure, which reduces theprobability or frequency of a particular loss but doesnot eliminate completely all possibility of that loss.

Loss Ratio: The ratio of claims to premiums. It maybe calculated in several different ways, using paidpremiums or earned premiums, and using paidclaims with or without changes in claim reserves anwith or without changes in active life reserves.




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Loss Reserve: The amount set up as the estimatedcost of a claim.

Market Value: The price at which an item can bebought or sold at any particular time.

Master Policy: A policy that is issued to anemployer or trustee, establishing a group insuranceplan for designated members of an eligible group.

Master Policy (or Master Contract): The policyissued to a group policyholder setting forth theprovisions of the group insurance plan. Theindividuals insure under the policy are then issuedcertificates of insurance.

Material Damage: Insurance against damage to a

vehicle itself. It includes automobile comprehensive,collision, fire and theft.Material damage and physical damage are termsthat often are used inter- changeably.

Misrepresentation: Misrepresentation occurswhen an applicant for insurance makes a statementthat is untrue and the insurer in good faith enters intothe contract. An insurer can cancel a policy for misrepresentation. If done fraudulently, the insurer may avoid the contract. In all other cases the

Contracts Act 1984 offers means of protection for the insured from the adverse consequences of misrepresentation.

No fault liabilityThe principle that a person who has been injured byanother may recover compensation from the other person whether or not that other person was at fault(such as by negligence or recklessness). Liabilityflows from the event, that is, from the injury.

Negligence: Failure to use the care that areasonable and prudent person would have usedunder the same or similar circumstances.

Net Premium: The portion of the premium rate,which is designed to cover benefits of the policy, butnot expenses, contingencies, or profit. The term isalso used to describe the portion of the premiumremitted to the home office by an agent after deduction of the agent's commission.

Non-cancellable Guaranteed Renewable Policy An individual policy which the insured person has thright to continue to force until a specified age, suchas to age 65, by the timely payment of premiums.During this period, the insurer has no right tounilaterally make any changes in any provision of th

policy while it is in force.

Non-disclosure: This is the withholding of information from an insurer. An insurer can cancel apolicy for nondisclosure. If done fraudulently duringcontract negotiations an insurer can avoid a contracfrom its, inception and deny any claim. In all other cases an insurer is entitled to reduce its liability for any claim by the extent to which the failure todisclose prejudiced the insurer.

Occupational Hazards: Occupations which exposthe insured to greater than normal physical danger by the very nature of the work in which the insured iengaged, and the varying periods of absence fromthe occupation, due to the disability, that can beexpected.

Occurrence: An accident, including continuous or repeated exposure to substantially the samegeneral, harmful conditions, that results in bodilyinjury or property damage during the period of an

insurance policy.

Occurrence policy: A liability insurance policy thatcovers claims arising out of occurrences that takeplace during the policy period, regardless of whenthe claim is filed.

Occurrence wording: A term used in liabilityinsurance. It refers to a policy under which thecircumstances giving rise to a claim must occur during the period of insurance. Claims under such a

contract may arise many years after the occurrenceof an event and this, created problems for insurersboth in terms of rating adequacy and claimsreserving. These problems gave rise to thedevelopment of "claims made" wordings, under which claims must be made against the insuredduring the period of insurance in order for the insureto provide an indemnity. A further development wasthe "claims made and notified" wording, under whicthe claim must be made against the insured and




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Overriding Commission (Overwrite): Acommission paid to general agents or agencymanagers in addition to the commission paid thesoliciting agent or broker.

Paid-up Insurance: Insurance on which all required

premiums have, been paid. The term is frequentlyused to mean the reduced paid-up insuranceavailable as a nonforfeiture option.

Partial Disability: The result of an illness or injury,which prevents an insured from performing one or more of the functions of his/her regular job.

Partial Disability: A benefit sometimes found indisability income policies providing for the paymentof reduced monthly income in the event the insured

cannot work full time and/or is prevented fromperforming one or more important daily dutiespertaining to his occupation.

Peril: The cause of a possible loss, such as fire,windstorm, theft, explosion, or riot.

Personal Lines: Those types of insurance, such asauto or home insurance, for individuals or familiesrather than for businesses or organizations.

Physical Damage: Damage to or loss of the autoresulting from collision, fire, theft or other perils.

Pollution Liability: Exposure to lawsuits for injury or cleanup costs that result from pollution damage

Premium funding: An arrangement between aninsured and a finance provider whereby theinsurance premiums are financed.

then advised to the insurer within the policy period.Probable maximum loss (PML): A term mostlyused in connection with property insurance. It refersto an estimate of the likely loss to be experienced ina "worse case" scenario, excluding catastropheevents. Some definitions assume that all fire fightingequipment, structural fire protection (eg. fire doors)

and alarms for a particular risk will fail. Other definitions of PML assume that these items fillfunction normally. The insurer uses this estimate of probable maximum loss as a basis for arrangingreinsurance. An insurer may be able to substantiallyincrease its retention (and therefore retain morepremium) on a single risk because of its PMLestimate. Mistakes will expose the insurer andpossibly reinsurers to an excessive single lossbeyond that contemplated by either party whentreaties were negotiated. Some treaties have been

negotiated on the basis that PML underwritingapplies. Insurers have differing terminology for PMLeg. Maximum possible loss, maximum probableloss, maximum foreseeable loss, estimatedmaximum loss, etc. They are all similar in concept.Insurers also use a form of PML to estimate their exposures in catastrophe zones to help them decidhow much catastrophe reinsurance to purchase.

Pool: An organization of insurers or reinsurersthrough which particular types of risk are

underwritten and premiums, losses and expensesare shared in agreed upon amounts.

Primary Insurance: Insurance that payscompensation for a loss ahead of any other insurance covers the policyholder may have.

Product Liability: Legal liability incurred by, amanufacturer, merchant, or distributor because of injury, or damage resulting from the use of itsproduct.

Proof of Loss: Documentary evidence required byan insurer to prove a valid claim exists. It usuallyconsists of a claim form completed by the insuredand the insured's attending physician. For medicalexpense insurance itemized bills must also beincluded.




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Property Damage Coverage: An agreement by aninsurance carrier to protect an insured against legalliability for damage by an insured automobile to theproperty of another.

Property Insurance: Insurance providing financial

protection against the loss of, or damage to, real andpersonal property caused by such perils as fire, theft,windstorm, hail, explosion, riot, aircraft, motor vehicles, vandalism, malicious mischief, riot and civilcommotion, and smoke.

Property Insurance: Provides financial protectionagainst loss or damage to the insured's propertycaused by such perils as fire, windstorm, hail, etc.

Proximate Cause: The dominating cause of loss or

damage which sets in motion an unbroken chain of events between the occurrence and damage. Asuccessful loss or damage claim must beproximately caused by an insured event.

Punitive Damages: a court awarded amount thatexceeds the economic losses and general damagesof a defendant and is intended solely to punish theplaintiff.

Reinstatement: A term used in a number of ways.

It may refer to the restoring of a lapsed or cancelledpolicy to full force and effect. It may also refer to thesituation that exists when the amount of reinsurancecover provided under an excess of loss treaty isreduced by the payment of a loss. Cover isautomatically reinstated to the level existing prior tothe occurrence of that loss. Often reinstatement issubject to, payment of a reinstatement premium.The number of reinstatements allowed is a matter for negotiation when contracts are arranged. The termalso refers to reduction of sum insured following a

claim payment under direct policies of insurance. Inburglary insurance, for example, a claim paymentwill automatically reduce the sum insured and thismust be reinstated by negotiation between theparties. Other classes of insurance may provide for automatic reinstatement of sum insured or policylimits in the event of claims payments.

Run-off: The remaining liability of a reinsurer after the effective cancellation date of a treaty where theris no portfolio withdrawal or additional cover offeredunder a Claims Made Policy. Losses may continuafter date of termination until expiry of individualcessions made to the treaty during its currency.

Liabilities may continue to be discharged in respectto claims incurred prior to termination.

Reinsurance :The purchase of insurance by aninsurance company from another insurancecompany (reinsurer) to provide it protection againstlarge losses on cases it has already insured.

Reinsurance Facility: An alternative mechanism toservice those insureds that cannot obtain insurancein the voluntary market. Premiums and losses for th

business that is ceded to the facility are pooled andall insurers share according to their proportion of thevoluntary market.

Replacement Cost: The cost to repair or replaceproperty at construction costs prevailing at time of loss; the cost to repair or rebuild property withoutconsidering depreciation.

Rescission: Termination of an insurance contract bthe insurer on the grounds of material misstatement

on the application for insurance. The action of rescission must take place within the contestableperiod or Time Limit on Certain Defences but takeseffect as of the date of issue of the policy, thusvoiding the contract from its inception.

Reservation of Rights: An arrangement wherebyan insurer defends a case without commitment toprovide coverage in the event that the factsdisclosed during the trial reveal that the occurrenceis not covered.

Reserve: An amount representing liabilities kept ban insurer to provide for future commitments under policies outstanding or an amount allocated for aspecial purpose.

Retention: The net amount of risk retained by aninsurance company for its own account or that of specified others, and not reinsured.




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Risk control: Any conscious action (or decision notto act) intended to reduce the frequency, severity, or unpredictability of accidental losses.

Retroactive Date: Retroactive date is the date

after which acts, errors or omissions of the Insuredare covered. That is, any act, error or omissionarising from work done after the Retroactive date willbe covered under the Policy. The Inception date isthe date of the start of the Policy Period.

Salvage: Recovery made by an insurance companyby the sale of property, 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 theinternal means of the policyholder, in place of purchasing coverage from commercial carriers. (2) Aform of risk financing through which a firm assumesall or a part of its own losses.

Soft Market: That part of the insurance sales cyclein which competition is at a maximum as insurancecompanies use their excess capacity to sell morepolicies at lower prices (see Hard market).

Standard Provision: Those contract provisionsgenerally required by state statutes until supersededby the uniform policy provision. (2)A set of policyprovisions prescribed by former laws setting forthcertain rights and obligations of both the insured andthe company under an individual policy of healthinsurance. These were originally introduced in 1912and have now been replaced by the UniformProvisions.

Strict Liability: Liability for damages even though

fault or negligence cannot be proven.

Subrogation: Process by which one insurancecompany seeks reimbursement from another company or person for a claim it has already paid.

Substandard Insurance: Insurance issued with anextra premium or special restriction to those personswho do not qualify for insurance at standard rates.

Third party claim: a demand made by a personagainst a policyholder of another company and anypayment that will be made by that company.

Treaty: An agreement between a reinsurer and aceding insurer setting forth details of the reinsurancarrangement.




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PART V

ACTIVITIES

Before proceeding with your activities, discuss which ones are to be completed, with your TraineExemptions from certain activities may be available. This will be dependent on your experience, currework role, type of work you complete on a daily basis and any other training you may have completeYou will be required to provide written evidence to support this.

You are required to complete the following activities:

Activities

3.2 3.103.5 3.123.6 3.153.8




50 of 7 Activity 1 – Answer the following questions as a review of the Insurance Actsand Codes of Practice

• The Insurance Contracts Act - outline the most relevant sections you would useon 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’ mayexist between the Broker and the Insurer?

• In what timeframe is a Broker required to remit? Refunds to a client Payments to an insurer




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How does the Insurance Act 1973 and the General Insurance Code of Practice have an affecton you as a broker?

In brief, what is the purpose of the following?

• Trade Practices Act • Credit Act

• Consumer Credit Code • Privacy Act




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ACTIVITY 2

A client requests insurance cover on his business. He indicates to you and on his proposal form that thebusiness involves the retail sale of Garden furniture and ornaments.

There is a fire on the premises, during the course of investigation by the Assessor’s, it is discovered the

insured has been manufacturing Metal Garden Ornaments, on the premises. He then sells these productsin the shop.

Taking into account the relevant Insurance Acts:

1. What are the obligations in relation to this insurance contract.

2. Can the Insurer refuse to settle the claim? State your reasons.

Discuss with your Trainer the options that are available to a client who has

had a claim refused.




53 of 7ACTIVITY 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




54 of 7CASE 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.

The building is leased and he has one apprentice mechanic.

Select three Business Pack Policies your office may use and provide a comparison between thethree 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. He also informs youthat he has purchased a Tow Truck to use in association with his business.

Outline the classes of insurance cover you believe are most essential to this client.

State the reasons for your selection.




55 of 7ACTIVITY 5

A number of scenarios have been provided below. You receive a brief telephone message froma prospective client who has provided limited information. You need to establish a suitable Needsand Risk analysis before contacting the prospective client. 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.

1. List the information you would seek from this client in order to obtain a quotation ontheir behalf.

2. List the products you may consider recommending and the basis for your recommendation.

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. The Director has advised he has a fleet of 10 vehicles and owns the premises from which his businessoperates.

b) James Smith is an Electrician, he has one casual employee, and owns a Holden Rodeo Utility.Operates from his home.

c) Food Outlet Pty Ltd owns a retail grocery store, 3 directors and 5 casual employees – leases hispremises.

d) Outback Pastoral Company operates a grazing and farming property with 2 working directorsonly. Owns the property, runs cattle and grows cotton.

e) Jenny Jones runs a small café, takeaway food outlet, employs 2 casual staff. Leases thepremises

f) Geronimo Whole Suppliers Pty Ltd operates a wholesale supply business, supplying products toretail grocery stores. They employ 20 permanent staff and own the property from which thebusiness operates.

g) Car and Truck Repairs Pty Ltd own and operates a mechanical auto repair workshop. Theyemploy 5 people and lease their business premises




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h) Rosewall Social Tennis Club – has 20 members and hires courts.

i) Pull My Tooth Dental Practice – employs 3 permanent staff. Leases the surgery.

j) Dog Trailer Manufacturing Pty Ltd – manufactures truck and car trailers.




57 of 7ACTIVITY 6 (Select either Activity 6, 7 or 8)

Prepare the following Business Submission.Please note submissions must be in report format.

John French is a new client who has contacted your office for quotations, he has initially provided thefollowing information.

He has recently purchased a Civil Engineering Business from the retiring Directors for whom he has workedfor 15 years. He has built and moved into a brick, 2 storey office block with local alarm system, fireextinguishers.

He provides a consulting engineering service for large utilities companies in the area and regularlysupervises on site work undertaken by contractors.

The property is situated at 14 Hargreaves Street, Brisbane 4000.

He is a fully qualified Civil Engineer as well as a Property Investor

He rents two offices in the building to other professionals.

Employs 10 staff and estimates an annual turnover of $8 million. His wage bill is $700,000 per annum.

John has contacted your office seeking advice on suitable Insurance covers, he has provided the followinglimited information

• Building value - $2.5 million,

• Office Contents - $50,000

•

Liability cover of $10million.

John also owns the following investment property, which is insured elsewhere and is due for renewalin 3 weeks time.

1 Hamilton Street, Newcastle 2010 NSW.

Retail Shopping Complex with 3 units occupied by Green Grocer,Butcher and Bakery.Lease agreement requires tenants to be responsible for cover in respect to Glass and all Landlords Fixture

and Fittings.

• Building sum insured - $1.5million

• Liability cover - $10million




58 of 7Task:

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.

• List the most common exclusions on each product.

• Prepare suitable quotation slips for the Insurers.

Prepare a submission to the client.

Assume you have selected an insurer who pays you an additional overriding commission of 0.05%.

Complete the following documentation:

• Select one class of cover or policy package you have recommended on the property in NSW- usingthe attached template complete the relevant schedule. Assume the base premium is$1000.00.

• Consider risk management strategies to be discussed with the client and outline these.

• Write a New Business submission report to Mr French, include details of the products,Insurers, and risk management strategies you are recommending.The reasons you are making the recommendations. Include a covering letter to Mr French.

• Provide a list of all other documents you may send with the submission, provide examples.

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




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Acceptance of Submission

Mr French accepts your submission.

• Describe in point format your next course of action.

• Provide a sample of the appropriate documentation you wouldforward to the client.

• Provide a sample of the appropriate documentation you wouldforward to the Insurer.




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XYZ INSURANCE BROKER PTY LTD

AFS Lic.No. 123456 ABN 12 134 151 678

GPO Box 123, Brisbane 4000 Phone: 07-333344441/15 Unit Street Fax: 07-33334445Brisbane City 4000 Email: email @xyz.com

Invoice

Name: Invoice

Number

Address: InvoiceDate

Address: Acct ID

Class of

Policy:

Policy No:

Insurer: Period of Cover:

From:

The Insured: To:

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 Levy

Fire Levy GST StampDuty

Broker Fee

$ $ $ $ $ $




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TOTAL DUE $

Schedule attached to and forming part of Policy No:

Insurer: Inv No:

Period of Cover: From: To:

The Insured:

Note to student. (complete schedule as per your Company’s guidelines and procedures)

The Business:

The Situation:




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ACTIVITY 7

Frank Farmer is a new client who has contacted your office for quotations, he has initially provided thefollowing information. He owns two farms. They are due for renewal in 3 weeks time and he is not

satisfied with his current broker. He is also a Contract Harvester.

He has provided the following information

His current policy covers the following:-

Farm 1 - 300 hectares in size. Wheat, Barley and Sorghum.

• Main Homestead - $100,000 (Timber and Iron Roof)

• Contents $ 60,000

• Workers Cottage - $ 30,000 (Timber and Iron Roof)

• 2 x Machinery Sheds $ 30,000 eoe(Iron on Steel)

• 3 x Silos Not insured (Iron)

• Dam for domestic use and irrigation purposes.

• 2 x Headers $150,000 eoe

• 2 x Tractors $ 75,000 eoe

• 2 x Cotton Pickers $250,000 eoe

• Miscellaneous farming equipment. $ 50,000

• 2 x Toyota Landcruiser Utilities Market Value

• 1 x Toyota Camry Sedan Market Value

•

2 x Prime Movers $100,000 eoe• 2 x Tipping Trailers. $ 30,000 eoe

Farm 2 – 150 hectares in size – Stud Horses

• Main Homestead $150,000 (Timber and Iron Roof)

• 2 x Hay sheds $ 40,000 eoe (Iron on Timber)

• 2 x Bores

• 5 Tonne Truck and Crate $ 15,000

• 2 x Horse Floats $ 15,000 eoe

He employs 1 permanent employee who resides at Farm 2 and 4 casuals.




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Task:











• Select one class of cover or policy package you have recommended. Using the attached templatecomplete the relevant schedule. Assume the base premium is $1000.00.


• Write a New Business submission report to Mr Farmer, include details of the products,Insurers, and risk management strategies you are recommending.The reasons you are making the recommendations. Include a covering letter to Mr Farmer.


Ongoing Service

Formulate an ongoing monitoring service plan for this client including timeframes in respect of:


• document return and recordingVersion 1.02 November 20



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XYZ INSURANCE BROKER PTY LTD AFS Lic.No. 123456 ABN 12 134 151 678


Invoice

Name: Invoice

Number

Address: Invoice

Date

Address: Acct ID

Class of Policy:

Policy No:


From:

The Insured: To:






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Broker Fee

$ $ $ $ $ $

TOTAL DUE $


Insurer: Inv No:Period of Cover: From: To:

The Insured:

Note to student.

(complete schedule as per your Company’s guidelines and procedures)

The Business:

The Situation:




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Task:











• Select one class of cover or policy package you have recommended. Using the attached templatecomplete the relevant schedule. Assume the base premium is $1000.00.


• Write a New Business submission report to Mrs Sullivan, include details of the products,Insurers, and risk management strategies you are recommending.The reasons you are making the recommendations. Include a covering letter to Mr Farmer.


Ongoing Service

Formulate an ongoing monitoring service plan for this client including timeframes in respect of:





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• document return and recording

• monitoring of losses

• ongoing service plan

Acceptance of Submission

Mrs Sullivan accepts your submission.

• Describe in point format your next course of action.

• Provide a sample of the appropriate documentation you wouldforward to the client.

• Provide a sample of the appropriate documentation you wouldforward to the Insurer.




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XYZ INSURANCE BROKER PTY LTD

AFS Lic.No. 123456 ABN 12 134 151 678


Invoice

Name: Invoice

Number

Address: InvoiceDate

Address: Acct ID

Class of Policy:

Policy No:


From:

The Insured: To:






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Broker Fee

$ $ $ $ $ $

TOTAL DUE $


Insurer: Inv No:Period of Cover: From: To:

The Insured:

Note to student. (complete schedule as per your Company’s guidelines and procedures)

The Business:

The Situation:




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ACTIVITY 9

You may choose one of the following and submit a report: You are requiredto outline what methods you used to obtain the data.

1. Review the retention rate of business in relation to product/client type.

I. Select a particular type of business or scheme your brokerage may write.eg. House Insurance, One off liability insurance etc. or

II. Select a particular type of client. eg electricians, professionals etc.

III. Complete an analysis of your retention rate of that business

2. Review claims loss ratio:

I. Select a particular underwriter.

II. Complete an analysis of the number of claims and types of claims you have lodged in the passed 6months.

3. 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.

4. Review Renewal Transfer/Retention Rate

I. Select a period of renewals

II. Complete an analysis of the number of policies and volume of businessyou have transferred from one underwriter to another.

III. The number of policies, which have lapsed. The reasons for the lapses.




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PART VI

MARKING RECORD




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tier 1 training handbook

Documents