Description

RG 146 Tier 1 Insurance Broking Case study Skills assessment

Case study scenario

Consider Jerome Daniels, age 52, who runs a luxury yacht rental business that services Sydney’s high-end private and corporate events market on Sydney Harbour. In the winter months, his yachts operate in the Whitsundays area of Queensland. He has a mix of directly employed and subcontracted crew. The turnover of the business is around $725,000 a month.

His wife, Sue, age 47, runs a digital design and publishing business that services clients nationally. She liaises with her clients mostly over email, phone or video conferencing, but does periodically travel interstate for business purposes so occasionally makes appointments to meet clients during those trips. She has three design interns on staff, as well as a list of go-to freelancers. The turnover of her business is around $85,000 a month.

Jerome and Sue live in the Sydney suburb of Marrickville. Their main residence is valued at $3.850 million. A second property on their block is on a separate title (numbered ‘a’) and the Daniels have been granted Council approval to have their home businesses operate from there. Though rare, from time-to-time clients do ‘drop in’ to this second property for meetings and transactions. Both Jerome and Sue have office equipment and tools stored there. As a residential property, it has a valuation of $1,235,000.

They have two children, James, age 15 and Melissa, age 13.

The couple has some insurance in place but want to ensure they have sufficient cover for both their personal and business needs.

Study the details of the Daniels’ circumstances and answer the following questions (bullet points are acceptable, but you must provide supporting commentary or explanation of your response where requested).

The assignment comprises five parts as follows. There are three scenarios for Part B, as the conditions of the units of competency you are awarded require us to assess you on three client scenarios; two of these scenarios must relate to reviewing the policies of clients who have existing cover:

• • PART A, assessing your onboarding and preliminary fact-finding skills (30 marks)

• Part B1, demonstrating your knowledge and skills in providing advice to the Daniels as a couple

(50 marks)

• Part B2, demonstrating your knowledge and skills in providing advice to Jerome Daniels’ business

(40 marks)

• Part B3, demonstrating your knowledge and skills in providing advice to Sue Daniels’ business

(40 marks)

• Part C , assessing your competence in implementing an insurance program for a customer and in providing ongoing services (30 marks)

PART A Preparing to provide advice in insurance broking (30 marks)

This part is designed to assess your customer on-boarding and preliminary fact-finding skills.

1. Consider the Daniels as a couple. What techniques would you use to identify the nature of the Daniels’ enquiry? Remember this point is pre-fact find so limit your response to obtaining very preliminary information only.

What does this information tell you about what stages of the broking process you might need to carry out to ultimately satisfy their enquiry? Simulate your interpretation of the Daniels’ enquiry and outline the purpose of each step you’ll need to follow to meet their needs (5 marks)

1. 1. Identify and discuss the legislation, regulatory guidance, industry codes, organisational policies and other measures you might need to comply with when chatting about each of the following matters with the Daniels:
      1. the advice your practice and you are authorised to give
      2. your role as an adviser, and

• your licensee’s role as the supervisor of your conduct (3 marks)

• Explain how you’d discuss with and inform the Daniels of, in general terms, the range of insurance-related products and services your practice offers. Also mention the fees, charges and renumeration models in place. In your answer include mention of legislative, industry and organisational requirements applicable to your practice’s conduct and disclosure relating to these areas. (3 marks)

• How and why would you establish the objectives and goals of the Daniels family? In your response, you should address what and how much personal, financial and business details you would collect, and how you would record it (3 marks)

1. What process do you follow to generate a risk profile? What mix of tools and skills would you use to risk profile the Daniels? What information do you gain from a risk profile and why is it important to conduct a thorough one? (3 marks).

• Explain why you should communicate the information you have collected and your preliminary findings to the Daniels. What methods can you use to do this? (2 marks)

• (a) What is a Letter of Authority to Review & Quote (LARQ), when is it required, and what is its purpose? (1.5 marks)

• What is a letter of appointment (LOA), when is it required, and what is its purpose? (1.5 marks)

• What industry standards does NIBA have in place regarding preparation and use of these documents? (1 mark)

• Identify then explain any legislative, regulatory guidance, industry code, and organisational policy requirements that may apply to the preliminary research and appointment stage of the insurance broking process? (3 marks)
  

• Describe what the duty of utmost good faith in insurance is and explain why it is important? (2 marks)

• State two (2) circumstances when you might not be able to service all of the Daniels’ insurance needs. What should you do if that situation arises? (2 marks)