SAQA

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SOUTH AFRICAN QUALIFICATIONS AUTHORITY

REGISTERED UNIT STANDARD THAT HAS PASSED THE END DATE:

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	5
REGISTRATION STATUS		REGISTRATION START DATE	REGISTRATION END DATE	SAQA DECISION NUMBER
Passed the End Date - Status was "Reregistered"		2018-07-01	2023-06-30	SAQA 06120/18
LAST DATE FOR ENROLMENT		LAST DATE FOR ACHIEVEMENT
2026-06-30		2029-06-30

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	Passed the End Date - Status was "Reregistered"	2023-06-30	INSETA
Elective	66611	National Certificate: Wealth Management	Level 5	NQF Level 05	Passed the End Date - Status was "Reregistered"	2023-06-30	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.

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