SAQA All qualifications and part qualifications registered on the National Qualifications Framework are public property. Thus the only payment that can be made for them is for service and reproduction. It is illegal to sell this material for profit. If the material is reproduced or quoted, the South African Qualifications Authority (SAQA) should be acknowledged as the source.
SOUTH AFRICAN QUALIFICATIONS AUTHORITY 
REGISTERED UNIT STANDARD: 

Demonstrate knowledge and understanding of the fundamental principles of risk finance in order to propose an insurance solution 
SAQA US ID UNIT STANDARD TITLE
242562  Demonstrate knowledge and understanding of the fundamental principles of risk finance in order to propose an insurance solution 
ORIGINATOR
SGB Insurance and Investment 
PRIMARY OR DELEGATED QUALITY ASSURANCE FUNCTIONARY
-  
FIELD SUBFIELD
Field 03 - Business, Commerce and Management Studies Finance, Economics and Accounting 
ABET BAND UNIT STANDARD TYPE PRE-2009 NQF LEVEL NQF LEVEL CREDITS
Undefined  Regular  Level 5  Level TBA: Pre-2009 was L5 
REGISTRATION STATUS REGISTRATION START DATE REGISTRATION END DATE SAQA DECISION NUMBER
Reregistered  2018-07-01  2023-06-30  SAQA 06120/18 
LAST DATE FOR ENROLMENT LAST DATE FOR ACHIEVEMENT
2024-06-30   2027-06-30  

In all of the tables in this document, both the pre-2009 NQF Level and the NQF Level is shown. In the text (purpose statements, qualification rules, etc), any references to NQF Levels are to the pre-2009 levels unless specifically stated otherwise.  

This unit standard does not replace any other unit standard and is not replaced by any other unit standard. 

PURPOSE OF THE UNIT STANDARD 
This unit standard is intended for Brokers and Intermediaries who give advice relating to risk finance and to learners who work in the field of Risk Management.

The qualifying learner is capable of:
  • Explaining the concept of risk transfer as opposed to insurance.
  • Explaining the limits of insurance and risk retention/risk transfer parameters.
  • Explaining the different facilities involved in risk transfer.
  • Proposing an insurance solution to transfer risk in a business entity. 

  • LEARNING ASSUMED TO BE IN PLACE AND RECOGNITION OF PRIOR LEARNING 
    It is assumed that learners are competent in Communication and Mathematical Literacy at NQF Level 4. 

    UNIT STANDARD RANGE 
    The typical scope of this unit standard is:
  • Conditions of uncertainty include, but are not limited to, risk averse, risk seeking and risk neutral.
  • Fear factors include, but are not limited to, size of losses, criminal prosecution, share holder activism and corporate governance.
  • Probability theory includes, but is not limited to, probability distributions, binomial distributions, Poisson distribution and normal distributions.
  • Examples of options include, but are not limited to, captives, contingencies, bury costs, spread loss, derivatives, quota share, aggregate, stop loss and catastrophe bonds. 

  • Specific Outcomes and Assessment Criteria: 

    SPECIFIC OUTCOME 1 
    Explain the concept of risk transfer as opposed to insurance. 

    ASSESSMENT CRITERIA
     

    ASSESSMENT CRITERION 1 
    Reasons why an organisation would seek to transfer risk are explained with examples. 

    ASSESSMENT CRITERION 2 
    The underlying principles of risk transfer are explained with examples. 

    ASSESSMENT CRITERION 3 
    Possible indicators of risk tolerance in a business are identified in order to determine ways of mitigating risk. 

    SPECIFIC OUTCOME 2 
    Explain the limits of insurance and risk retention/risk transfer parameters. 

    ASSESSMENT CRITERIA
     

    ASSESSMENT CRITERION 1 
    Aggregate annual losses are determined using probability theory. 

    ASSESSMENT CRITERION 2 
    A distribution graph is interpreted and explained in relation to risk retention and risk transfer. 

    ASSESSMENT CRITERION 3 
    The risks in an entity are analysed to determine which risks could be transferred to insurance. 

    ASSESSMENT CRITERION 4 
    Knowledge of the cost of insurance is applied to determine risk retention. 

    ASSESSMENT CRITERION 5 
    The difference between a provision and a reserve is explained with examples. 

    SPECIFIC OUTCOME 3 
    Explain the different facilities involved in alternative risk transfer. 

    ASSESSMENT CRITERIA
     

    ASSESSMENT CRITERION 1 
    The concepts of risk retention and risk transfer are explained with reference to degrees of risk. 

    ASSESSMENT CRITERION 2 
    Available options for retention and transfer of risk are explained with examples. 

    ASSESSMENT CRITERION 3 
    The difference between risk transfer and alternative risk transfer is explained with examples. 

    SPECIFIC OUTCOME 4 
    Propose an insurance solution to transfer risk in a business entity. 

    ASSESSMENT CRITERIA
     

    ASSESSMENT CRITERION 1 
    The prices of risk transfer and risk retention are compared to determine the most cost effective solution for a specific entity. 

    ASSESSMENT CRITERION 2 
    A short term insurance solution is proposed for a specific entity. 


    UNIT STANDARD ACCREDITATION AND MODERATION OPTIONS 
  • Anyone assessing a candidate against this Unit Standard must be registered as an assessor with the relevant ETQA or ETQA where a Memorandum of Understanding (MOU) exists with the relevant ETQA.
  • Any institution offering learning that will enable achievement of this unit standard must be accredited as a provider through the relevant ETQA or ETQA where a Memorandum of Understanding (MOU) exists with the relevant ETQA.
  • Moderation of assessment will be overseen by the relevant ETQA according to the moderation guidelines and the agreed ETQA procedures. 

  • UNIT STANDARD ESSENTIAL EMBEDDED KNOWLEDGE 
    N/A 

    UNIT STANDARD DEVELOPMENTAL OUTCOME 
    N/A 

    UNIT STANDARD LINKAGES 
    N/A 


    Critical Cross-field Outcomes (CCFO): 

    UNIT STANDARD CCFO IDENTIFYING 
    Learners are capable of identifying and solving problems in which responses show that responsible decisions using critical thinking have been made in proposing a solution to transfer risk. 

    UNIT STANDARD CCFO COLLECTING 
    Learners are capable of collecting, organising and critically evaluating information in determining risk retention and risk transfer parameters. 

    UNIT STANDARD CCFO COMMUNICATING 
    Learners are capable of communicating effectively in interpreting and explaining distribution graphs. 

    UNIT STANDARD CCFO SCIENCE 
    Learners are capable of using technology effectively and critically in determining risk retention and risk transfer parameters. 

    UNIT STANDARD CCFO DEMONSTRATING 
    Learners are capable of demonstrating an understanding of the world as a set of related systems by recognising that problem-solving contexts do not exist in isolation in determining ways of mitigating risk. 

    UNIT STANDARD ASSESSOR CRITERIA 
    N/A 

    REREGISTRATION HISTORY 
    As per the SAQA Board decision/s at that time, this unit standard was Reregistered in 2012; 2015. 

    UNIT STANDARD NOTES 
    Search words: risk finance, risk transfer, risk retention. 

    QUALIFICATIONS UTILISING THIS UNIT STANDARD: 
      ID QUALIFICATION TITLE PRE-2009 NQF LEVEL NQF LEVEL STATUS END DATE PRIMARY OR DELEGATED QA FUNCTIONARY
    Core  57918   National Certificate: Short Term Insurance  Level 5  Level TBA: Pre-2009 was L5  Reregistered  2023-06-30  INSETA 
    Elective  66611   National Certificate: Wealth Management  Level 5  Level TBA: Pre-2009 was L5  Reregistered  2021-06-30  As per Learning Programmes recorded against this Qual 


    PROVIDERS CURRENTLY ACCREDITED TO OFFER THIS UNIT STANDARD: 
    This information shows the current accreditations (i.e. those not past their accreditation end dates), and is the most complete record available to SAQA as of today. Some Primary or Delegated Quality Assurance Functionaries have a lag in their recording systems for provider accreditation, in turn leading to a lag in notifying SAQA of all the providers that they have accredited to offer qualifications and unit standards, as well as any extensions to accreditation end dates. The relevant Primary or Delegated Quality Assurance Functionary should be notified if a record appears to be missing from here.
     
    1. African Resources & Financial Training (Pty) Ltd 
    2. AFRICAN UNION SKILLS DEVELOPMENT PTY LTD 
    3. ALCARI 233 CC T/A ALCARI (Eversdal)(TP) 
    4. Boland Public FET College - Central Office 
    5. CKP Development Agency (Pty) Ltd. 
    6. COLLEGE OF CAPE TOWN 
    7. College of Cape Town - Central Office 
    8. False Bay College 
    9. Intec College 
    10. Invuya Institute of Learning (Pty) Ltd 
    11. Masifunde Training Centre (Pty) Ltd 
    12. North Link College 
    13. Old Mutual Life Assurance Company South Africa 
    14. Ray Strodl Consulting (Pty) Ltd 
    15. Ripple Effect 4 (Pty) Ltd 
    16. Sanlam Life Insurance Ltd 
    17. Sanlam Life Insurance Ltd. 
    18. South Cape College 
    19. South Cape Public FET College - Central Office 
    20. The Institute of Health Risk Managers (Pty) Ltd 
    21. Umfolozi FET College - Central Office 
    22. Universal Healthcare Services (Pty) Ltd 



    All qualifications and part qualifications registered on the National Qualifications Framework are public property. Thus the only payment that can be made for them is for service and reproduction. It is illegal to sell this material for profit. If the material is reproduced or quoted, the South African Qualifications Authority (SAQA) should be acknowledged as the source.