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                                   Learning Materials

                Unit Standard Title:                       Underwrite a standard risk in long term
                                                           insurance


                Unit Standard No:                          14433


                Unit Standard Credits:                     40


                NQF Level:                                 4



                                     Facilitator Guide

This outcomes-based learning material was developed by ARA Insurance Skills and
        reviewed by Momentum with funding from INSETA in October 2003..
We also received very helpful input and commentary from a team provided by Sanlam,
    who reviewed material and assisted with composition. Our thanks are due to:
  Alrina Laker, Brenda Snyders, David Hattingh, Esmari Wium, Susan Dippenaar,
                                  Vanessa February
Our thanks are also due to the following reinsurers who provided helpful commentary
          and suggestions as well as access to their underwriting manuals:
                General Cologne Re, Hannover Re, Munich Re, RGA

                               The material is generic in nature.
                Its purpose is to serve as a guide for the further development
                    and customization of company-specific, learner-specific
                         and situation-specific learning interventions.


                                                    Disclaimer:
 Whilst every effort has been made to ensure that the learning material is accurate, INSETA takes no responsibility
 for any loss or damage suffered by any person as a result of the reliance upon the information contained herein.




Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                                                                  Page 2



             Underwrite a standard risk in long-term insurance
Contents

Facilitator Guide – Pre-planning Information ....................................................................... 10
  Introduction ........................................................................................................................... 10
  The outcomes summarised ................................................................................................... 10
  The recommended structure of learning................................................................................ 11
  The timing of delivery ............................................................................................................ 13
     Initial training (class-room) ................................................................................................ 13
     On-going structured training .............................................................................................. 13
     Practical training ................................................................................................................ 13
     Reading and research ....................................................................................................... 14
     Summary of coaching sessions ......................................................................................... 14
  Detailed delivery plan............................................................................................................ 16
     Training timetable .............................................................................................................. 17
     Practical training phase ..................................................................................................... 24
     Company support for training time..................................................................................... 24
     Structure of practical training ............................................................................................. 24
     Structure of formal training time and related coaching ....................................................... 24
     Schedule of on-going training ............................................................................................ 25
  Material for learning .............................................................................................................. 26
  Preparation for training days ................................................................................................. 26
  The assessment process ...................................................................................................... 26
     Formative and summative assessments ............................................................................ 26
     Identities of role players in the assessment process .......................................................... 27
  Training course material ....................................................................................................... 27
Day 1 – Facilitator Notes ........................................................................................................ 28
  Preparation for day 1 ............................................................................................................ 28
  Agenda for today .................................................................................................................. 28
  The welcome ........................................................................................................................ 29
  The NQF ............................................................................................................................... 30
  The Unit Standard................................................................................................................. 30
  Expectations – group exercise .............................................................................................. 30
  The assessment process ...................................................................................................... 30
  The portfolio of evidence ....................................................................................................... 31
  Compiling a portfolio – group discussion ............................................................................... 31
  Purpose of underwriting ........................................................................................................ 31
  Types of underwriting............................................................................................................ 31
Day 1 – Learner Material ........................................................................................................ 33
  Objectives for today .............................................................................................................. 33
  Introduction – day 1 .............................................................................................................. 33
  Training plan ......................................................................................................................... 34
  This week’s formal training programme................................................................................. 34


Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                                                               Page 3



   Agenda for Day 1 .................................................................................................................. 36
   The National Qualifications Framework (NQF) ...................................................................... 36
   This unit standard ................................................................................................................. 36
   Introduction to this course ..................................................................................................... 42
      Your expectations.............................................................................................................. 42
      The assessment process................................................................................................... 44
      Your portfolio of evidence .................................................................................................. 44
      Compiling of portfolio – group discussion .......................................................................... 46
   Why underwrite? ................................................................................................................... 47
      Why underwrite – exercise ................................................................................................ 49
      General issues in underwriting .......................................................................................... 50
      Types of underwriting ........................................................................................................ 52
      Types of underwriting – exercise ....................................................................................... 53
      Types of underwriting – formative assessment .................................................................. 55
Day 2 – Facilitator Notes ........................................................................................................ 56
  Preparation for day 2 ............................................................................................................ 56
  Agenda for today .................................................................................................................. 56
  The welcome ........................................................................................................................ 57
  Purpose of underwriting ........................................................................................................ 57
  Company products ................................................................................................................ 58
  Underwriting procedures ....................................................................................................... 58
Day 2 – Learner Material ........................................................................................................ 60
  Objectives for today .............................................................................................................. 60
  Introduction – day 2 .............................................................................................................. 60
  Agenda for Day 2 .................................................................................................................. 60
  Purpose of underwriting ........................................................................................................ 62
     Purpose of underwriting – exercise 1................................................................................. 63
     Purpose of underwriting – exercise 2................................................................................. 65
     Purpose of underwriting – formative assessment .............................................................. 66
  Company products ................................................................................................................ 67
     Product discussion ............................................................................................................ 68
     Product features ................................................................................................................ 75
     Company products – exercise ........................................................................................... 79
  Underwriting procedures ....................................................................................................... 84
Day 3 – Facilitator Notes ........................................................................................................ 92
  Preparation for day 3 ............................................................................................................ 92
  Agenda for today .................................................................................................................. 92
  The welcome ........................................................................................................................ 93
  Underwriting procedures ....................................................................................................... 93
  Source material..................................................................................................................... 93
  Limits of authority.................................................................................................................. 95
Day 3 – Learner Material ........................................................................................................ 97
  Objectives for today .............................................................................................................. 97
  Introduction – day 3 .............................................................................................................. 97


Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                                                               Page 4



   Agenda for Day 3 .................................................................................................................. 97
   Underwriting procedures ....................................................................................................... 99
   Source material................................................................................................................... 100
   Limits of authority................................................................................................................ 121
     Underwriting limits – formative assessment ..................................................................... 123
Day 4 – Facilitator Notes ...................................................................................................... 124
  Preparation for day 4 .......................................................................................................... 124
  Agenda for today ................................................................................................................ 124
  The welcome ...................................................................................................................... 126
  Medical pathology ............................................................................................................... 126
  Occupational and avocational risks ..................................................................................... 127
Day 4 – Learner Material ...................................................................................................... 128
  Objectives for today ............................................................................................................ 128
  Introduction – day 4 ............................................................................................................ 128
  Agenda for Day 4 ................................................................................................................ 128
  Medical pathology ............................................................................................................... 130
     Medical pathology – formative assessment 1 .................................................................. 131
     Medical pathology – formative assessment 2 .................................................................. 146
  Occupational and avocational risks ..................................................................................... 147
     Occupational and avocational risks – formative assessment ........................................... 152
Day 5 – Facilitator Notes ...................................................................................................... 154
  Preparation for day 5 .......................................................................................................... 154
  Agenda for today ................................................................................................................ 154
  The welcome ...................................................................................................................... 155
  LOA protocols ..................................................................................................................... 155
  Financial underwriting and insurable interest ...................................................................... 156
  Medical schemes underwriting ............................................................................................ 156
  Recapping .......................................................................................................................... 156
Day 5 – Learner Material ...................................................................................................... 158
  Objectives for today ............................................................................................................ 158
  Introduction – day 5 ............................................................................................................ 158
  Agenda for Day 5 ................................................................................................................ 158
  LOA protocols ..................................................................................................................... 160
     The code on the Life Register (Chapter 1) ....................................................................... 164
     The code of good practice on disability (Chapter 3) ......................................................... 167
     The HIV testing protocol (Chapter 6) ............................................................................... 168
     The Life Offices Association – formative assessment ...................................................... 170
  Financial underwriting and insurable interest ...................................................................... 172
     Financial underwriting – formative assessment ............................................................... 178
  Medical schemes underwriting ............................................................................................ 181
     Medical schemes underwriting – formative assessment .................................................. 183
  Recapping .......................................................................................................................... 184
Planning session .................................................................................................................. 185


Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                                                                  Page 5



Weekly modules ................................................................................................................... 187
 Notes for the facilitator ........................................................................................................ 189
Week 1................................................................................................................................... 190
 Week 1 Medical Topic: Physical build, family history and genetics...................................... 193
   Objective: By the end of this session the learner will be able to: ...................................... 193
   Resource material for the learner to use: ......................................................................... 193
   Questions to ask learners to check understanding: ......................................................... 193
 Week 1 General Topic: General discussion of underwriting forms ...................................... 195
   Objective: By the end of this session the learner will be able to: ...................................... 195
   Resource material for the learner to use: ......................................................................... 195
   Questions to ask learners to check understanding: ......................................................... 195
 Preparation for next session ............................................................................................... 197
Week 2................................................................................................................................... 199
 Week 2 Medical Topic: Cardio-vascular system – heart and blood pressure ....................... 202
   Objective: By the end of this session the learner will be able to: ...................................... 202
   Resource material for the learner to use: ......................................................................... 202
   Questions to ask learners to check understanding: ......................................................... 202
 Week 2 General Topic: Occupation definitions useful and not useful .................................. 204
   Objective: By the end of this session the learner will be able to: ...................................... 204
   Resource material for the learner to use: ......................................................................... 204
   Questions to ask learners to check understanding: ......................................................... 204
 Preparation for next session ............................................................................................... 206
Week 3................................................................................................................................... 208
 Week 3 Medical Topic: Cardio-vascular system - peripheral and cholesterol ...................... 211
   Objective: By the end of this session the learner will be able to: ...................................... 211
   Resource material for the learner to use: ......................................................................... 211
   Questions to ask learners to check understanding: ......................................................... 211
 Week 3 General Topic: Occupations sensitive to claims ..................................................... 213
   Objective: By the end of this session the learner will be able to: ...................................... 213
   Resource material for the learner to use: ......................................................................... 213
   Questions to ask learners to check understanding: ......................................................... 213
 Preparation for next session ............................................................................................... 215
Week 4................................................................................................................................... 217
 Week 4 Medical Topic: Respiratory system ........................................................................ 220
   Objective: By the end of this session the learner will be able to: ...................................... 220
   Resource material for the learner to use: ......................................................................... 220
   Questions to ask learners to check understanding: ......................................................... 220
 Week 4 General Topic: Financial underwriting and insurable interest ................................. 222
   Objective: By the end of this session the learner will be able to: ...................................... 222
   Resource material for the learner to use: ......................................................................... 222
   Questions to ask learners to check understanding: ......................................................... 222
 Preparation for next session ............................................................................................... 224
Week 5................................................................................................................................... 226
 Week 5 Medical Topic: Tumours ......................................................................................... 229
   Objective: By the end of this session the learner will be able to: ...................................... 229
   Resource material for the learner to use: ......................................................................... 229


Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                                                                  Page 6



     Questions to ask learners to check understanding: ......................................................... 229
   Week 5 General Topic: Health conflicts with the work environment .................................... 231
     Objective: By the end of this session the learner will be able to: ...................................... 231
     Resource material for the learner to use: ......................................................................... 231
     Questions to ask learners to check understanding: ......................................................... 231
   Preparation for next session ............................................................................................... 233
Week 6................................................................................................................................... 235
 Week 6 Medical Topic: Locomotor or musculo-skeletal system .......................................... 238
   Objective: By the end of this session the learner will be able to: ...................................... 238
   Resource material for the learner to use: ......................................................................... 238
   Questions to ask learners to check understanding: ......................................................... 238
 Week 6 General Topic: Quality of working environment ...................................................... 240
   Objective: By the end of this session the learner will be able to: ...................................... 240
   Resource material for the learner to use: ......................................................................... 240
   Questions to ask learners to check understanding: ......................................................... 240
 Preparation for next session ............................................................................................... 242
Week 7................................................................................................................................... 244
 Week 7 Medical Topic: Review 1 ........................................................................................ 247
   Objective: By the end of this session the learner will be able to: ...................................... 247
   Resource material for the learner to use: ......................................................................... 247
   Questions to ask learners to check understanding: ......................................................... 247
 Week 7 General Topic: Mining – underground and open cast ............................................. 249
   Objective: By the end of this session the learner will be able to: ...................................... 249
   Resource material for the learner to use: ......................................................................... 249
   Questions to ask learners to check understanding: ......................................................... 249
 Preparation for next session ............................................................................................... 251
Week 8................................................................................................................................... 253
 Week 8 Medical Topic: Endocrine and metabolic system .................................................... 256
   Objective: By the end of this session the learner will be able to: ...................................... 256
   Resource material for the learner to use: ......................................................................... 256
   Questions to ask learners to check understanding: ......................................................... 256
 Week 8 General Topic: Heavy machinery and construction ................................................ 258
   Objective: By the end of this session the learner will be able to: ...................................... 258
   Resource material for the learner to use: ......................................................................... 258
   Questions to ask learners to check understanding: ......................................................... 258
 Preparation for next session ............................................................................................... 260
Week 9................................................................................................................................... 262
 Week 9 Medical Topic: Gastro-intestinal track .................................................................... 265
   Objective: By the end of this session the learner will be able to: ...................................... 265
   Resource material for the learner to use: ......................................................................... 265
   Questions to ask learners to check understanding: ......................................................... 265
 Week 9 General Topic: Military personnel........................................................................... 267
   Objective: By the end of this session the learner will be able to: ...................................... 267
   Resource material for the learner to use: ......................................................................... 267
   Questions to ask learners to check understanding: ......................................................... 267
 Preparation for next session ............................................................................................... 269


Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                                                                 Page 7



Week 10................................................................................................................................. 271
 Week 10 Medical Topic: Urogenitary or genito-urinary system............................................ 274
   Objective: By the end of this session the learner will be able to: ...................................... 274
   Resource material for the learner to use: ......................................................................... 274
   Questions to ask learners to check understanding: ......................................................... 274
 Week 10 General Topic: Security firms ............................................................................... 276
   Objective: By the end of this session the learner will be able to: ...................................... 276
   Resource material for the learner to use: ......................................................................... 276
   Questions to ask learners to check understanding: ......................................................... 276
 Preparation for next session ............................................................................................... 278
Week 11................................................................................................................................. 280
 Week 11 Medical Topic: Haematology, blood and lymphatic systems ................................. 283
   Objective: By the end of this session the learner will be able to: ...................................... 283
   Resource material for the learner to use: ......................................................................... 283
   Questions to ask learners to check understanding: ......................................................... 283
 Week 11 General Topic: Liquor and entertainment industries ............................................. 285
   Objective: By the end of this session the learner will be able to: ...................................... 285
   Resource material for the learner to use: ......................................................................... 285
   Questions to ask learners to check understanding: ......................................................... 285
 Preparation for next session ............................................................................................... 287
Week 12................................................................................................................................. 289
 Week 12 Medical Topic: Eye, ear, nose and throat ............................................................. 292
   Objective: By the end of this session the learner will be able to: ...................................... 292
   Resource material for the learner to use: ......................................................................... 292
   Questions to ask learners to check understanding: ......................................................... 292
 Week 12 General Topic: Working with electricity ................................................................ 294
   Objective: By the end of this session the learner will be able to: ...................................... 294
   Resource material for the learner to use: ......................................................................... 294
   Questions to ask learners to check understanding: ......................................................... 294
 Preparation for next session ............................................................................................... 296
Week 13................................................................................................................................. 298
 Week 13 Medical Topic: Skin .............................................................................................. 301
   Objective: By the end of this session the learner will be able to: ...................................... 301
   Resource material for the learner to use: ......................................................................... 301
   Questions to ask learners to check understanding: ......................................................... 301
 Week 13 General Topic: Working with explosives ............................................................... 303
   Objective: By the end of this session the learner will be able to: ...................................... 303
   Resource material for the learner to use: ......................................................................... 303
   Questions to ask learners to check understanding: ......................................................... 303
 Preparation for next session ............................................................................................... 305
Week 14................................................................................................................................. 307
 Week 14 Medical Topic: Review 2 ...................................................................................... 310
   Objective: By the end of this session the learner will be able to: ...................................... 310
   Resource material for the learner to use: ......................................................................... 310
   Questions to ask learners to check understanding: ......................................................... 310
 Week 14 General Topic: Aviation - flying as a job or as a pastime ...................................... 312
   Objective: By the end of this session the learner will be able to: ...................................... 312

Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                                                                 Page 8



     Resource material for the learner to use: ......................................................................... 312
     Questions to ask learners to check understanding: ......................................................... 312
   Preparation for next session ............................................................................................... 314
Week 15................................................................................................................................. 316
 Week 15 Medical Topic: Neurology, mental, nervous and psychiatric ................................. 319
   Objective: By the end of this session the learner will be able to: ...................................... 319
   Resource material for the learner to use: ......................................................................... 319
   Questions to ask learners to check understanding: ......................................................... 319
 Week 15 General Topic: Diving – amateur and professional ............................................... 321
   Objective: By the end of this session the learner will be able to: ...................................... 321
   Resource material for the learner to use: ......................................................................... 321
   Questions to ask learners to check understanding: ......................................................... 321
 Preparation for next session ............................................................................................... 323
Week 16................................................................................................................................. 325
 Week 16 Medical Topic: Infectious and parasitic diseases .................................................. 328
   Objective: By the end of this session the learner will be able to: ...................................... 328
   Resource material for the learner to use: ......................................................................... 328
   Questions to ask learners to check understanding: ......................................................... 328
 Week 16 General Topic: Racing ......................................................................................... 330
   Objective: By the end of this session the learner will be able to: ...................................... 330
   Resource material for the learner to use: ......................................................................... 330
   Questions to ask learners to check understanding: ......................................................... 330
 Preparation for next session ............................................................................................... 332
Week 17................................................................................................................................. 334
 Week 17 Medical Topic: Habits, substance abuse and drug dependence ........................... 337
   Objective: By the end of this session the learner will be able to: ...................................... 337
   Resource material for the learner to use: ......................................................................... 337
   Questions to ask learners to check understanding: ......................................................... 337
 Week 17 General Topic: Cyclical industries ........................................................................ 339
   Objective: By the end of this session the learner will be able to: ...................................... 339
   Resource material for the learner to use: ......................................................................... 339
   Questions to ask learners to check understanding: ......................................................... 339
 Preparation for next session ............................................................................................... 341
Week 18................................................................................................................................. 343
 Week 18 Medical Topic: Transplants .................................................................................. 346
   Objective: By the end of this session the learner will be able to: ...................................... 346
   Resource material for the learner to use: ......................................................................... 346
   Questions to ask learners to check understanding: ......................................................... 346
 Week 18 General Topic: Residence and travel considerations ........................................... 348
   Objective: By the end of this session the learner will be able to: ...................................... 348
   Resource material for the learner to use: ......................................................................... 348
   Questions to ask learners to check understanding: ......................................................... 348
 Preparation for next session ............................................................................................... 350
Week 19................................................................................................................................. 352
 Week 19 Medical Topic: Review 3 ...................................................................................... 355
   Objective: By the end of this session the learner will be able to: ...................................... 355


Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                                                                 Page 9



     Resource material for the learner to use: ......................................................................... 355
     Questions to ask learners to check understanding: ......................................................... 355
   Week 19 General Topic: Micro-lenders ............................................................................... 357
     Objective: By the end of this session the learner will be able to: ...................................... 357
     Resource material for the learner to use: ......................................................................... 357
     Questions to ask learners to check understanding: ......................................................... 357
   Preparation for next session ............................................................................................... 359
Week 20................................................................................................................................. 361
 Week 20 Medical Topic: Summary review .......................................................................... 364
   Objective: By the end of this session the learner will be able to: ...................................... 364
   Resource material for the learner to use: ......................................................................... 364
   Questions to ask learners to check understanding: ......................................................... 364
 Week 20 General Topic: Review ......................................................................................... 366
   Objective: By the end of this session the learner will be able to: ...................................... 366
   Resource material for the learner to use: ......................................................................... 366
   Questions to ask learners to check understanding: ......................................................... 366




Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                            Page 10




Facilitator Guide – Pre-planning Information

Introduction
This facilitator guide sets out the key steps that the facilitator should follow in order to manage
and deliver this training material. The facilitator must apply his/her mind to the design and
modify it, where appropriate, to take account of the particular circumstances in which learning
will take place. Where possible we have included alternatives in the material that follows but
must stress that these alternatives are by no means exhaustive.

Note that this Facilitator Guide is part of a pack of material developed and distributed by Inseta.
In preparing for training and subsequent assessment the facilitator should:
1. First read the User Guide. This is a document that details all the background and
    philosophy of the materials developed.
2. Look through the Assessment Rubric. This document indicates how this unit standard is to
    be assessed.
3. Be aware of the contents of all material that is to be distributed to learners. The list is given
    in the User Guide under “Additional Resources”. Note that this list also contains the
    Facilitator Guide, Assessment Rubric and User Guide – these documents will not need to be
    distributed to Users.
4. Note that the Learner Guide is replicated within the Facilitator Guide. The Assessment Pack
    is broadly covered in the Assessment Rubric. Given the length of these documents the
    facilitator may not wish to print the Learner Guide and Assessment Pack out until such time
    as s/he has worked through the Facilitator Guide and Assessment Rubric.

The training plan for this unit standard has to extend over a period of at least 6 months. The
training will take place largely “on the job” although there will be classroom training and
facilitated discussions in order to support the development of expertise. This specific plan
incorporates a five-day training programme, followed by an extended practical programme.
Time is set aside at the end for completion of assessments.

The programme assumes that the learners come to the training with no underwriting knowledge
or experience, although they do have a general idea about the insurance industry and the
national qualifications framework.


The outcomes summarised
The unit standard requires candidates to be able to:
    Gather information for the assessment of the risk
    Understand the medical information provided for underwriting purposes
    Understand other risks involved
    Have knowledge of sources of useful information and reference material to assess long
       term risk
    Pull this together in order to make a decision within own authority limit

Although not specifically covered in this unit standard, it must be assumed that the learner has
basic product knowledge. Adequate product knowledge would assist the learner’s
understanding of the relevance of the underwriting process.




Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                           Page 11



The recommended structure of learning
The unit standard carries 40 credits, implying some 400 hours of learning. Much of this learning
will take place by means of practical application and own reading. The learning interventions
need to support the learner in this process by providing structure as well as giving tutors an
opportunity to coach the learner in specific areas.

The 400 hours needs to be split into manageable sections. This is done in various parts of the
material. Due to rounding issues there may appear to be inconsistencies between one split and
another. The facilitator should not be unduly concerned by this and should be flexible enough
to reallocated training time as and when required.

Training times are split according to the section of work in the table that follows. Thereafter a
split is shown by training phase. Finally a detailed delivery plan, incorporating a lesson plan, is
included. Again, the timing of delivery should be modified by the facilitator to take account of
learner needs. Modification can take place when preparing for training as well as during the
course.

The first suggested split of the 400 hours is:




Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                                                              Page 12



Section of work                   Class room        Practical work      Research and   Reviewing and   Summative    Total hours
                                                                        reading        coaching        Assessment
Introduction and outline of       4 hours                                                                           4 hours
course, the NQF and the
assessment process
Purpose of and principles of      4 hours                                                              1 hour       5 hours
underwriting
The company’s products and        3 hours                               2 hours        4 hour                       9 hours
underwriting requirements
Company procedures in             3 hours                                              4 hours                      7 hours
underwriting
Limits of authority               1 hour                                                                            1 hour
Underwriting source material –    3 hours                               10 hours       12 hours                     25 hours
where is it and what does it
have
Medical pathology – terms and     20 hours                              40 hours       32 hours        2 hours      94 hours
meanings
Occupational and avocational      10 hours                              10 hours       4 hours         1 hour       25 hours
risks
Financial underwriting and        3 hours                                                              1 hour       4 hours
insurable interest
Medical schemes underwriting      1 hour                                                                            1 hour
LOA protocols and agreements      6 hours                               4 hours        4 hours         1 hour       15 hours
Practical work - simulation                         30 hours                           4 hours         6 hours      40 hours
Practical work – moderated                          120 hours                          16 hours        24 hours     160 hours
underwriting assessments
Final summative assessment                                                                             10 hours     10 hours
and preparation of portfolio of
evidence
Totals                            58 hours          150 hours           66 hours       80 hours        46 hours     400




Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                           Page 13




The timing of delivery

Initial training (class-room)
The schedule allocates a substantial part of the class-room time up front, i.e. a large portion of
the 58 hours allocated to study will take place in a class-room environment at the outset of the
training. This forms part of a core induction into the subject matter or into a learnership
agreement. Of the 58 hours 30 are allocated to this initial training period with the balance being
delivered over the balance of the training period.


On-going structured training
After the initial period of training the facilitator will establish a coaching and review plan. The
plan calls for regularly (weekly or fortnightly) meetings over a period of at least 20 weeks. The
aim is to have 20 half-days or 10 full-days during which learners discuss progress with reading,
share findings and report on their underwriting experiences. The facilitator will review their
progress reports and set goals for the balance of the learning. This structured training will
continue at the same time that practical training takes place.

RECOMMENDATION: The facilitator should consider establishing a learning support group for
this structured training. Such a group would create efficiencies in training delivery as well as
providing learners with collegiate support in the learning environment.

Note:

1. As an alternative to scheduling the 20 week’s training it is possible that learning
   could be scheduled over a shorter period, e.g. conduct intensive training on the
   medical and non-medical topics over 20 working days.
2. During this time the learner’s could complete some simulation assessments.
3. As soon as the training is completed the learner commences practical work (under
   supervision) and undergoes the reviews listed in the practical elements of the on-
   going training.
4. The facilitator would need to make appropriate adjustments to the Learner Guide and
   other material should s/he wish to follow this route.


Practical training
The largest block of time is allocated to practical training. The 150 hours is divided into 30
hours of simulation work and 120 hours of practical work. This practical training takes place
over at least 20 weeks, i.e. some 7½ hours per week is spent on simulation or practical work.

DEFINITIONS:
  1. By “simulation work” we mean that the learners will underwrite dummy cases that can be
      checked by the facilitator or someone who is not an authorised underwriter. The use of
      dummy cases ensures that personal medical information is kept confidential.
  2. By “practical work” we mean that the learner is working on “live” cases. At this stage the
      work must be checked by an authorised underwriter and personal information provided
      in each case must be treated in absolute confidence.




Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                            Page 14



The number of underwriting case assessments would need to be calibrated according to the
reasonable number of minutes per case. An experienced underwriter would be expected to
handle more than 50 cases in an eight-hour day, i.e. each case would take less than 10 minutes
(more than 6 per hour). The plan provides for learners to start at 1 case per hour and reach 4
per hour by the time training is completed.

The learner should start with simulation work and progress to practical work (for the
confidentiality reasons outlined above). The plan is that the first four weeks should focus on
simulated underwriting cases after which the learner progresses to practical cases.

We have incorporated one minute of feedback for every 5 minutes spent on practical
application. This equates to 1½ hours of coaching feedback per week. This feedback would be
given by the facilitator in respect of the simulation work and by a registered underwriter in
respect of the practical work. In the initial stages of training more feedback will be required per
case, which ties in with the greater time per case taken by the learner.

Learners will benefit from further discussion of cases underwritten in a separate nurturing or
coaching environment. For this reason we have scheduled time for learners to discuss their
cases in the forum of a learning support group or a personal coaching environment.


Reading and research
Reading and research takes place over the same 20-week period that is allocated to practical
training. To be proficient in this unit standard the learner must carry out a lot of reading in order
to grow his/her understanding of medical and other terms relevant to underwriting.

The facilitator has to provide some structure to this reading and research. We have drafted this
material with the following structure in mind:

   1. 1 week before a planned coaching session: Learners briefed on topic and given a lists of
      recommended reading and questions that they need to be able to answer.
   2. The learners prepare themselves during this week by spending the allocated time on
      reading and making notes.
   3. A direct coaching (classroom) session takes place. An expert, i.e. an experienced
      underwriter or CMO, should run this session or be directly involved to provide input.
   4. Learners supplement their learning by discussing any problems or issues in a coaching
      session such as a learning support group.


Summary of coaching sessions
In summary, the coaching sessions that we have outlined here include the following:

   1. Individual coaching:
          a. Feedback from facilitator or senior underwriter on practical cases underwritten by
              the learner.
   2. Individual or group coaching:
          a. Training plan review
          b. Discussion of progress with practical cases
          c. Sharing of experiences and learning points
          d. Discussion of reading and classroom training
   3. Group (classroom) training:


Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 15



          a. Discussion of reading, involving an expert.




Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                                Page 16




Detailed delivery plan
The facilitator should draft a delivery plan that contains the following steps:
   1. Take the plan that follows as a starting point.
   2. Discuss the plan with the sponsor of the training (e.g. the manager of the learners).
   3. Draft a revision to the plan to take account of specific requirements of the sponsor.
   4. Review the plan with the learners during the initial sessions.
   5. Modify the plan again, if appropriate.
   6. Ensure that the sponsor is happy with any modifications and manage any clashes.

The plan that is presented here builds on the broad outline in the previous section. As indicated
in that outline the training delivery takes place in 3 stages, with the practical training taking
place simultaneously with the “middle” phase. The three identified phases are:

    1. Initial training and frameworks (30 hours classroom – i.e. 5 full training days)
    2. On-going training (20+ weeks of practical and facilitated training, structured into a
       weekly regimen)
    3. Final assessment and wrap-up (10 hours, probably split over a couple of weeks)

The initial training is set out to take place over 5 full training days, as set out in the following
section:




Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                                                                          Page 17



Training timetable

 Day           Time          Topic covered                              Details
                 -           The NQF                                     Learners should be advised of the way that the NQF works as part of
                                                                           their overall induction into any OBE training environment. We have
                                                                           assumed that this has taken place, but it is worthwhile to ensure that
                                                                           learners are adequately briefed prior to commencing the learning
 Prior                                                                     process.
                  -          Pre-reading                                 It will be helpful to give learners some of the training material and
                                                                           reference material prior to commencing learning, with the
                                                                           recommendation that they familiarise themselves with the layout of the
                                                                           material (if not the content).




Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                                                                            Page 18



          08h30 to 10h30     Introduction                               1. Welcome (15 minutes) – facilitator
                                                                                o General welcome
                                                                                o Administrative issues (location of toilets, smoking policy, cell-
                                                                                     phone policy, etc.)
                                                                                o Agenda – 5-day course structure and agenda for today
                                                                        2. Overview of the NQF (30 minutes; brief recap – note that we have
                                                                            assumed that a detailed discussion of the NQF has taken place
                                                                            separately); highlight pursuit of qualification and recognition of
                                                                            qualifications
                                                                        3. Summary of the unit standard and an outline of the course structure (30
                                                                            minutes) – facilitator. Include:
                                                                                o Name of course
                                                                                o Map from start to completion of assessments
                                                                        4. Introductions and expectations discussion (45 minutes) – group work
                                                                            and feedback
Day 1
                                                                                o Identify overall objective of training
                                                                                o Identify training objectives for this initial 5-day training period
          11h00 to 12h30     Introduction – continued                   5. The assessment process – assessment instruments used and map to
                                                                            unit standards (30 minutes) – facilitator
                                                                        6. On compiling a portfolio of evidence for this unit standard (30 minutes)
                                                                            – facilitator
                                                                        7. Discussion of assessment and evidence process (30 minutes) – group
                                                                            work
          13h30 to 15h00     Introduction – continued                   8. Feedback on group discussion of portfolio of evidence (30 minutes) –
                             Purpose of underwriting                        facilitated session
                                                                        9. Why underwrite? (60 minutes) – facilitator introduction, followed by
                                                                            group discussion and feedback
          15h30 to 16h30     Purpose of underwriting – continued        10. What type(s) of underwriting should take place and why is it useful? (60
                                                                            minutes) – facilitator introduction, followed by group discussion and
                                                                            feedback




Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                                                                           Page 19



           08h30 to 08h45     Day 2 welcome                             11. Summary of day 1
                                                                        12. Set scene for day 2
           08h45 to 10h30     Purpose of underwriting – continued       13. Draft a statement on the purpose of underwriting (60 minutes) –
                                                                            facilitator introduction, followed by group discussion and feedback
                                                                        14. Summary of the purpose of underwriting and consolidation of purpose
                                                                            statement (30 minutes) – facilitator
                                                                        15. Formative assessment on purpose of underwriting (15 minutes)
                                                                                o Note that if satisfactory this initial formative assessment can be
                                                                                     included in the portfolio of evidence as a summative assessment
           11h00 to 12h30     Our company and its products              16. Introduction to company’s products (15 minutes) – facilitator
                                                                        17. Overview of different sub-sets of the company’s products (75 minutes) –
Day 2                                                                       structured presentations of all company’s products that carry risk, and
                                                                            others if time allows; should cover:
                                                                                o all business units of the company, including group/individual
                                                                                o all products, including standard lines, credit life insurance,
                                                                                     funeral policies, etc.
           13h30 to 15h00     Our company and its products –            18. Exercise: Identify what risks are covered by the products and what
                              continued                                     other risks exist, e.g. moral hazard (90 minutes) – facilitator
                                                                            introduction, followed by group discussion and feedback
           15h30 to 16h30     Our underwriting procedures               19. Established underwriting procedures within the company (180 minutes)
                                                                            – facilitator; should spend 15 minutes on each of the following, giving
                                                                            learners time to discuss, ask questions and make notes:

Details:                                                                       o   the steps followed in assessing the case
       o   how cases are received                                              o   process for referral to senior underwriters
       o   how they are recorded on receipt                                    o   process for referral to CMO
       o   the opening of an underwriting file                                 o   process for referral to reinsurers
       o   what information is recorded on the file                            o   how decisions are recorded
       o   what information is recorded electronically (and where)             o   how decisions are communicated
       o   the processes involved in checking the LOA register                 o   how confidentiality is maintained




Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                                                                              Page 20



          08h30 to 08h45     Day 3 welcome                              20. Summary of days 1 and 2
                                                                        21. Set scene for day 3
          08h45 to 10h30     Our underwriting procedures –              22. Continuation of the yesterday’s process (1st four or five due on day 2
                             continued                                      and balance on day 3)
          11h00 to 12h30     Source material for underwriting           23. Source material for underwriting available to underwriters at the
                                                                            company Part 1 (90 minutes) – facilitator should spend 15 minutes on
                                                                            each of the following, giving learners time to discuss, ask questions and
                                                                            make notes:
                                                                                o Underwriting manual – reinsurer 1 (or own manual)
                                                                                o Underwriting manual – reinsurer 2
                                                                                o Medical reference material – Brackenridge, Merck manual,
                                                                                    Medical dictionary, MIMS
                                                                                o Medical magazines
                                                                                o Medical web-sites
Day 3                                                                           o Other material
          13h30 to 15h00     Source material for underwriting –         24. Source material for underwriting available to underwriters at the
                             continued                                      company Part 2 (90 minutes) – facilitator should spend 30 minutes
                                                                            using each of the following in a practical way, i.e. helping learners to
                                                                            look up information and discussing what that information means:
                                                                                o Underwriting manual – reinsurer 1 (or own manual)
                                                                                o Underwriting manual – reinsurer 2
                                                                                o Medical reference material – Brackenridge, Merck manual,
                                                                                    Medical dictionary, MIMS
          15h30 to 16h30     Limits of authority                        25. Introduction (45 minutes) – facilitator introduces topic, followed by group
                                                                            discussion and feedback on reasons for limits, general indications of
                                                                            what limits apply and summary of the consequences on non-
                                                                            compliance
                                                                        26. Formative assessment (15 minutes) – each learner summarises their
                                                                            own limits of authority




Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                                                                                Page 21



          08h30 to 08h45     Day 4 welcome                              27. Summary of days 1 to 3
                                                                        28. Set scene for day 4
          08h45 to 10h30     Medical pathology                          29. Introduction to medical terms (45 minutes) – facilitator introduces
                                                                            learners to prefix-root-suffix construction of terms and allows learners to
                                                                            complete sample exercises using this approach
                                                                        30. Formative assessment of “creating terms” (15 minutes)
                                                                        31. The principal “systems” in the human body (45 minutes) – facilitator
                                                                            introduces the systems to the learners
          11h00 to 12h30     Medical pathology – continued              32. Disease (90 minutes) – facilitated discussion of risk factors, their links to
                                                                            disease, and how diseases affect the various systems in the human
                                                                            body, including prognosis
          13h30 to 15h00     Medical pathology – continued              33. Summary of pathology discussions (15 minutes) – facilitator
                             Occupational and avocational risks         34. Formative assessment of pathology discussions (15 minutes)
                                                                        35. Definition of occupations and avocations and types of associated risks
Day 4
                                                                            (30 minutes) – facilitator introduction
                                                                        36. Key occupational risks (60 minutes, split across the break) – facilitated
                                                                            discussions of 10 minutes each on the following (list not exhaustive!):
                                                                                o Mining risks
                                                                                o Explosives
                                                                                o Aviation risks
                                                                                o Transport/driving
                                                                                o Military and policing risks
                                                                                o Diving risks
          15h30 to 16h30     Occupational and avocational risks –       37. Key occupational risks – continuation of the above process (1st three
                             continued                                      due before tea and last three due after tea)
                                                                        38. Avocational risks (15 minutes) – facilitated discussion of such risks
                                                                        39. Formative assessment on topics related to occupational and
                                                                            avocational risks (15 minutes)




Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                                                                            Page 22



          08h30 to 08h45     Day 5 welcome                              40. Summary of days 1 to 4
                                                                        41. Set scene for day 5
          08h45 to 10h30     LOA protocols                              42. Introduction to the LOA and its purpose (15 minutes) – facilitator
                                                                        43. Summary and purpose of main LOA agreements affecting underwriting
                                                                            (15 minutes) – facilitator and discussion
                                                                        44. The LOA underwriting register (purpose and usage) (30 minutes) –
                                                                            facilitator and discussion/practical demonstration – where to find the
                                                                            codes
                                                                        45. The LOA protocol on limitation of disability benefits (overview and
                                                                            discussion of reasons) (15 minutes) – facilitator and discussion
                                                                        46. The LOA protocols on HIV testing (15 minutes) – facilitator and
                                                                            discussion
                                                                        47. Formative assessment of LOA protocols (15 minutes)
          11h00 to 12h30     Financial underwriting and insurable       48. Introduction of financial underwriting (30 minutes) – facilitator covers
                             interest                                       range of financial underwriting including tests of insurable interest,
Day 5
                             Medical schemes underwriting                   simple tests of affordability and comprehensive assessments of assets
                                                                            and liabilities
                                                                        49. Discussion of financial underwriting (30 minutes) – group discussion of
                                                                            purpose of different types of financial underwriting and feedback
                                                                        50. Formative assessment on financial underwriting and insurable interest
                                                                            (15 minutes)
                                                                        51. Introduction to medical schemes underwriting and how the philosophy
                                                                            differs from life insurance (15 minutes) – facilitator and discussion
          13h30 to 15h00     Medical schemes underwriting –             52. Discussion of options available to medical schemes (30 minutes) –
                             continued                                      facilitator and discussion
                             Recap                                      53. Formative assessment of medical schemes underwriting (15 minutes)
                                                                        54. Recap days 1 and 2 (15 minutes) – facilitator and discussion
          15h30 to 16h30     Recap                                      55. Recap days 3, 4 and 5 (30 minutes) – facilitator and discussion
                                                                        56. Review formative assessments; repeat where desired; schedule further
                                                                            training, wrap-up (30 minutes)




Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                                                                            Page 23



    Post           -           Recap session, if required               57. Schedule additional time for learners to raise questions concerning this
                                                                            introductory session and go over particular areas of difficulty

A post-training session might be arranged to cover:

    A review of material not well understood by learners
    Repeats of formative assessments for learner’s Portfolios of Evidence
    Scheduling of on-going training sessions
    Resource allocation (or acquisition)

These sessions could be conducted on a one-on-one basis or as a group. We have not
been prescriptive about this as the facilitator will need to exercise judgement based on
the specific needs of the learners and the organisation supporting the learnership.




Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                              Page 24




Practical training phase
After completion of the initial introductory training the learners move into a practical phase. This
will consist of some 360 hours of on-going training over a period of some 20 to 24 weeks. The
amount of 360 hours is allocated as follows
     1. Formal training time:                    28 hours (remaining after the initial training period)
     2. Practical training:                      150 hours
     3. Research and reading:                    66 hours
     4. General coaching and review:             80 hours
     5. Assessment – practical work:             30 hours
     6. Assessment – other:                      6 hours

This translates into a weekly regimen of 15 to 18 hours per week, roughly allocated as follows:
   1. Formal training time:                  1 hour to 1½ hours
   2. Practical training:                    7 to 7½ hours
   3. Research and reading:                  3 hours
   4. General coaching and review:           3 to 4 hours
   5. Assessment – practical work:           1 to 1½ hours
   6. Assessment – other:                    As scheduled


Company support for training time
We recommend that companies provide substantial support for this training by allowing most of
the training to take place during office hours (or “on company time”). In practice different
companies will have different policies as to how many hours can be allocated during office
hours and how much work the learner is expect to do after hours.

The facilitator should clarify the allocation with the employer and be in a position to explain it to
the learners.


Structure of practical training
The design that follows allows for practical training to take place over 20 weeks. The facilitator
can allocate additional time if required. The various activities will take place throughout the
process, although some meetings and discussions may be scheduled fortnightly rather than
weekly.

During the first 4 weeks the practical work will focus more on simulation exercises, after which
the learner will start to process actual cases. Note that the facilitator and the company’s chief
medical underwriter may agree to replace the simulation exercises with real exercises.


Structure of formal training time and related coaching

The formal training time and coaching covers medical and non-medical topics related to
underwriting. The medical topics are likely to be more challenging and should be allocated the
bulk of the training time. The recommended allocation of weekly time is as follows:

   1. Formal training time (1 hour to 1½ hours) – all allocated to medical topics
   2. Research and reading (3 hours) – 2½ hours allocated to medical topics and 30 minutes
      allocated to non-medical topics

Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                            Page 25



      3. General coaching and review (3 to 4 hours) – Allocate between two-thirds and three-
         quarters of the time to medical topics and the balance to non-medical topics


Schedule of on-going training
The following plan shows a week-by-week allocation of topics and target objectives for practical
training:

     Class Lesson – medical               Class Lesson – non-
                                                                       Practical training
     topics                               medical topics
                                                                        Cases 7½ hours
Week  Formal 1 to 1½ hours                Formal Nil
                                                                        One-on-one review
      Reading 2½ hours                    Reading 30 minutes
                                                                          1½ hours
      Review 2½ hours                     Review 1 hour
     Physical build, family history       General discussion of
 1                                                                     8 simulation cases
     and genetics                         underwriting forms
     Cardio-vascular system - heart       Occupation definitions
 2                                                                     8 simulation cases
     and blood pressure                   useful and not useful
     Cardio-vascular system -             Occupations sensitive to
 3                                                                     10 simulation cases
     peripheral and cholesterol           claims
                                          Financial underwriting
  4       Respiratory system                                           12 simulation cases
                                          and insurable interest
                                          Health conflicts with the
  5       Tumours                                                      12 practical cases
                                          work environment
          Locomotor or musculo-skeletal   Quality of working
  6                                                                    12 practical cases
          system                          environment
                                          Mining - underground
  7       Review 1                                                     15 practical cases
                                          and open cast
          Endocrine and metabolic         Heavy machinery and
  8                                                                    15 practical cases
          system                          construction
  9       Gastro-intestinal track         Military personnel           18 practical cases
          Urogenitary or genito-urinary
 10                                       Security firms               18 practical cases
          system
          Haemolotology, blood and        Liquor and entertainment
 11                                                                    20 practical cases
          lymphatic systems               industries
 12       Eye, ear, nose and throat       Working with electricity     20 practical cases
 13       Skin                            Working with explosives      22 practical cases
                                          Aviation - flying as a job
 14       Review 2                                                     22 practical cases
                                          or as a pastime
          Neurology, mental, nervous      Diving - amateur and
 15                                                                    25 practical cases
          and psychiatric                 professional
          Infectious and parasistic
 16                                       Racing                       25 practical cases
          diseases
          Habits, substance abuse and
 17                                       Cyclical industries          28 practical cases
          drug dependence
                                          Residence and travel
 18       Transplants                                                  28 practical cases
                                          considerations
 19       Review 3                        Micro-lenders                30 practical cases
 20       Summary review                  Review                       30 practical cases




Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                                  Page 26




Material for learning
The learners should be aware of the National Qualifications Framework (NQF) and the way that
it works. If required the facilitator should provide learners with an overview of the NQF. Generic
material is available on the Inseta website and a copy was distributed with this material.

Prior to commencement of training each learner should receive:
    1. A full set of learner notes (The Learner Guide).
    2. A full set of assessment instruments (The Assessment Pack).
    3. A copy of the reference note “Medical Terms: Prefix, Root and Suffix”, a copy of which is
        distributed with this material.
    4. A copy of the National Qualifications Framework generic material, a copy of which is
        distributed with this material.

During training learners should have:
   1. At least one, preferably two, underwriting manuals.
   2. A copy of any underwriting practice notes that apply within the company.
   3. A copy of the learner’s own authority limits.
   4. Access to the note “LOA Register Codes”, a copy of which is distributed with this
       material.
   5. Access to select chapters of LOA codes and protocols (distributed with this learning
       material in an LOA sub-directory; updates should be accessible from the LOA website
       http://www.loa.co.za ).

The facilitator must ensure that s/he is in possession of:
   1. The facilitator guide.
   2. The user guide (which contains general information).
   3. A copy of the assessment guide.
   4. A copy of all material distributed to, or to be available to, the learner.


Preparation for training days
There is a preparation checklist at the start of the facilitator notes for each training day during
the initial phase. The facilitator should go through the checklists for all five days well before
training commences in order to prepare adequately for the training. The facilitator should then
go through the checklist for each day again on the evening before that day’s training so that
s/he is adequately prepared for the day’s training.

The assessment process

Formative and summative assessments
There are a few formative assessments included in the initial training material. These
assessments are useful in that they allow both learner and facilitator to gauge progress and
take any corrective action required. In some cases learners will answer the questions correctly
at the first sitting (i.e. during the training). If this happens then the facilitator can sign off the test
and it can be used as part of a summative assessment.

The summative assessments are assessments that take place at the end of the learning. These
assessments are those that will be signed off and included in the final portfolio of evidence.
There are a large number of summative assessment instruments that will be collected in the


Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                             Page 27



portfolio of evidence. The portfolio of evidence will then be subjected to final assessment and
moderation.


Identities of role players in the assessment process
The individuals involved in the assessment process may play different roles at different times.
In order to clarify who the different role players are we have defined the following terms:

      Learner – the person who is attending the training course in order to prepare for
       assessment.
      Candidate – the person who is being assessed, whether or not s/he attended the course
       as a learner.
      Facilitator – the person who runs the training course in order to prepare learners for
       assessment.
      Assessor – a registered and accredited assessor who will assess the portfolio of
       evidence. The assessor may be the facilitator, if the facilitator is an accredited assessor.
       If the facilitator is not an accredited assessor then s/he should discuss the assessment
       process with the assessor prior to conducting any of the assessments.
      Subject matter expert – a person who is knowledgeable about underwriting or the topics
       to be covered. The facilitator and the assessor may be subject matter experts but are
       not necessarily so. If neither party is a subject matter expert then s/he should engage a
       subject matter expert to assist them with their understanding and interpretation of the
       topics covered.
      Moderator – a register and accredited moderator who will moderate the assessments
       carried out by the assessor. The assessor should meet with the moderator in order to
       agree on the assessment process prior to the commencement of assessment.
      The supervisor – the learner/candidate’s supervisor or manager in the workplace. In
       most cases this will be the person to whom the candidate reports on a daily basis (i.e.
       his/her line manager). In some cases it may be a technical person to whom the
       candidate reports on technical underwriting matters – for example, where the candidate
       reports directly to a business manager on daily management matters but reports to a
       technical expert on underwriting matters then the technical expert would be deemed to
       be the supervisor.
      Tester – a person who administers an oral test on a practical matter. This tester may be
       the supervisor but, if the supervisor is not available or not the appropriate person to
       administer the test then an alternative subject matter expert could be used.


Training course material
Material directly related to the training course follows. It is structured in the form of a section per
day containing:
   1. General information for the facilitator, followed by
   2. Learner material, with notes added.


NOTE: The notes added to the learner material for guidance to the facilitator is written
highlighted in italics. Normally this will be in the form of notes added to exercises that are done
in class.



Facilitator guide and lesson plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                          Page 28



        Underwrite a standard risk in long-term insurance
Day 1 – Facilitator Notes
Read these notes in conjunction with the learner material for Day 1.


Preparation for day 1
   Complete your normal preparation checklist concerning venue, facilities, meal
    arrangements and material arrangements.
   Ensure all learners have received the Learner Guide and the Assessment Pack as well as
    any other preparation material that they require.
   Ensure that the facilitator has a clear understanding of the company’s underwriting
    philosophy and its stated purpose of underwriting.


Agenda for today

 08h30 to    Introduction           Welcome (15 minutes) – facilitator
  10h30                                      o General welcome & sharing of names
                                             o Administrative issues (location of toilets,
                                                 smoking policy, cell-phone policy, etc.)
                                             o Agenda – 5-day course structure and
                                                 agenda for today
                                    Overview of the NQF (30 minutes; brief recap –
                                     note that we have assumed that a detailed
                                     discussion of the NQF has taken place separately);
                                     highlight pursuit of qualification and recognition of
                                     qualifications
                                    Summary of the unit standard and an outline of the
                                     course structure (30 minutes) – facilitator. Include:
                                             o Name of course
                                             o Map from start to completion of
                                                 assessments
                                    Introductions and expectations discussion (45
                                     minutes) – group work and feedback
                                             o Identify overall objective of training
                                             o Identify training objectives for this initial
                                                 5-day training period
 11h00 to    Introduction –         The assessment process – assessment
  12h30      continued               instruments used and map to unit standards (30
                                     minutes) – facilitator
                                    On compiling a portfolio of evidence for this unit
                                     standard (30 minutes) – facilitator
                                    Discussion of assessment and evidence process
                                     (30 minutes) – group work




Day 1: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                           Page 29



 13h30 to     Introduction –         Feedback on group discussion of evidence (30
  15h00       continued               minutes) – facilitated session
              Purpose of             Why underwrite? (60 minutes) – facilitator
              underwriting            introduction, followed by group discussion and
                                      feedback
 15h30 to     Purpose of             What type(s) of underwriting should take place and
  16h30       underwriting –          why is it useful? (60 minutes) – facilitator
              continued               introduction, followed by group discussion and
                                      feedback


The welcome
The introduction is intended to welcome the learners and set them up not only for the day or
the next five days but for the training session as a whole. The welcome should therefore set
the scene whereby this training course will give them the tools that they need to become
underwriters. The path is not quick but is intended to provide learners with a thorough
grounding in the material that will enable them to meet all the criteria laid down by the unit
standard.

The early introduction allows time to explain all the house rules and practical matters.

Finally the first session covers the programme – lay this out at three levels:

   1. The overall training course:
         a. One week of formal training, followed by
         b. 20 weeks of on-the-job training and structured coaching, followed by
         c. Time to complete outstanding assignments and projects and submit these for
            final evaluation.

   2. The next five days, as covered in this table:

                    Day     Topic covered
                            Introduction
                   Day 1
                            Purpose of underwriting
                            Purpose of underwriting – continued
                   Day 2    Our company and its products
                            Our underwriting procedures
                            Our underwriting procedures – continued
                   Day 3    Source material for underwriting
                            Limits of authority
                            Medical pathology
                   Day 4
                            Occupational and avocational risks
                            LOA protocols
                            Financial underwriting and insurable interest
                   Day 5
                            Medical schemes underwriting
                            Recap and summary

   3. The detailed programme for today is listed as that given above, but the shorter version
      shown in the learner material.




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Level 4, 40 Credits
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The NQF
The explanation of the NQF should be routine and generic. The key is to ensure that the
learners understand that they will receive substantial credit for this unit standard and that it will
go towards a National Certificate.

As reference material we recommend that you have at least one copy of the note “National
Qualifications Framework generic material” available. This note is distributed along with this
material.


The Unit Standard
Outline the unit standard and take learners through the standard (which is reproduced in full in
the learner material).

You should highlight the 5 specific outcomes first, then point out (without going into too much
detail) the assessment criteria. Show that there are numerous criteria, with some requiring
knowledge and some requiring practical application.

Point out the critical cross-field and development outcomes, as well as the embedded
knowledge criteria. Take the learners through the range statements so that they understand
the breadth of the unit standard. Finally, point out the substantial number of credits for this
course and draw attention to the practical work experience requirement imposed at the end of
the unit standard.

Point out that the objective is to gather evidence against the various outcomes and
assessment criteria. The assessment instruments have been designed to generate the
documentary evidence.


Expectations – group exercise
At this stage you should allow the learners to introduce themselves briefly (if not already done
so) before proceeding to the exercise on expectations. Structure of the 45 minutes is 5
minutes of introduction, 20 minutes of discussion and 20 minutes of feedback.

For the group exercise, the groups should consist of 3 to 5 learners. Ideally you should
allocate the learners to groups on a structured basis and have the names in each group
available prior to starting the day’s learning.

Note that the exercise deals with expectations both for the five day course and the overall
training. During the feedback exercise the main objectives should be captured on flipchart or
similar.


The assessment process
You should ensure that the learners have received the pack of assessment instruments (see
file distributed with this material), including the assessment map. If they have not received
them then hand out a copy of the pack to each learner and discuss the key points of layout
with them.




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Level 4, 40 Credits
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The portfolio of evidence
Take the learners through the construction of a portfolio of evidence (you may have some
generic material or hand-outs here). The most important objects of this exercise are:
   1. Outline how the portfolio is to be presented (any format requirements)
   2. Outline where the portfolio is to be submitted (to whom)
   3. Outline what deadlines will apply (note that missing deadlines may have cost
       implications)
   4. Outline the process – who keeps copies of documents
   5. Touch on the rights of candidates (repeat assessment, appeals process, etc.)


Compiling a portfolio – group discussion
Compiling a portfolio of evidence can be challenging, especially for learners/candidates who
are new to the process. A “portfolio compilation” discussion is included in order to set learners
on the path towards thinking about how they will go about collecting and collating their portfolio
of evidence.

This is also an opportunity for the facilitator to reassure learners that they will be able to
manage the development of their portfolio and that it should not be an unduly onerous burden
for them.

The facilitator should be prepared to give assistance and reassurance on the following points:
   1. The opportunities for group work and sharing the burden
   2. The opportunities to co-opt assistance from mentors
   3. The level of management support that has been offered
   4. The level of company support that has been offered

Purpose of underwriting
The aim is to lead the learners through a thinking process that results in them understanding
why insurers spend money on underwriting and why governments allow underwriting despite
constitutional and other laws prohibiting discrimination.

As a starting point, learners need to address the question “Why underwrite?” This will
eventually lead to the construction of a statement of the purpose of underwriting that will come
on day 2. It can be very difficult to justify underwriting to people who have a limited
understanding of insurance.

In the exercise that is given learners will have to think of sound reasons why underwriting
should be permitted in the face of criticism that many would regard as valid – so much so that
some forms of underwriting have been outlawed in some countries for some types of products
that have an insurance component. An example that will be considered in due course in the
limits placed on underwriting for medical schemes in South Africa – more about those later in
the training programme.


Types of underwriting
The aim is to highlight that underwriting is about much more than medical conditions (although
the work of an underwriter is primarily about an individual’s state of health). Learners need to
be able to identify different aspects of underwriting, such as:
1. Structural underwriting – to do with the way policies are designed, priced and sold
2. Medical underwriting – to do with the individual’s state of health

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3. Genetic underwriting – to do with health aspects or tendencies that the individual may
   have inherited (this is a sub-set of #1; note that most underwriting includes questions
   related to family history but advanced genetic testing is not used)
4. Occupational underwriting – to do with the dangers inherent in an individual’s occupation
5. Lifestyle underwriting – to do with socio-economic groups and education levels (could also
   include factors such as gym membership and usage), as well as personal habits (smoking,
   drinking, etc.)
6. Avocational underwriting – to do with an individuals hobbies and pastimes
7. Geographical underwriting – to do with where an individual lives, works or travels
8. Financial underwriting – to do with the relationship between an individual’s financial
   position and the amount of insurance granted as well as the insurable interest between the
   parties
9. Legal underwriting – to do with ensuring that a policy that is issued falls within the
   requirements imposed by law (e.g. laws on maximum policy size for minors); could
   similarly be taken as ensuring that policies fall within the limits imposed by the insurer’s
   internal rules and regulations.

The group exercise asks a number of questions to promote understanding.

A final exercise on Day 1 asks learners to sort types of underwriting and definitions. This can
be handed in for marking. The exercise can be used as a formative assessment. If a learner
completes the exercise satisfactorily then the result could be included in the portfolio of
evidence as evidence against assessment criterion 1.5.

Recommendations for the facilitator:
1. Be prepared to take in and mark these formative assessments for handing back at the start
   of day 2.
2. Have spare copies of the assessment available for learners who need fresh copies (for
   whatever reason).




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Level 4, 40 Credits
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        Underwrite a standard risk in long-term insurance
Day 1 – Learner Material


Objectives for today

By the end of today you should:
1. Understand broadly the National Qualifications Framework and how it affects your training.
2. Understand what this unit standard is about.
3. Understand how you will be assessed against this unit standard.
4. Understand why insurers underwrite risks and what types of underwriting are used.


Introduction – day 1
This training programme will prepare you for assessment against the unit standard “Underwrite
a standard risk in long term insurance”. Once you demonstrate competence against this unit
standard you will be equipped to underwrite standard risks. Experience and further learning
will help you advance in this career path.

This unit standard is also a major component of the Level 4 National Certificate in Insurance
(Risk Assessment). The unit standard carries 40 credits out of the 54 core credits required to
qualify for the National Certificate.
The unit standard develops the following competencies:

Skills                                          Knowledge
 Interpret medical information                  Medical knowledge
 Interpret occupational and avocational         Occupational risks
   information                                   Company practice
 Interpret financial and product information
 Decide level of risk
 Communicate decisions

Values                                          Attitudes
 Integrity                                      Professionalism
 Maintain confidentiality                       Diligence
 Continuous learning


The following learning map is a summarised version. A more detailed map is shown in the
facilitators guide.




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Level 4, 40 Credits
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                                                                                   Summative
Assessment              Formative / Continuous Assessment
                                                                                   Assessment

Learning            Theory         Reading      Practical    Reviewing         Supervisor   Knowledge
activities for       input           and        work on        and                 case      tests and
400 hours of        (Class         research      the job     coaching             review        final
notional learning    room                                                          and      preparation
                     work)                                                      feedback    of portfolio




                                                   150
                    58 hours       66 hours                   80 hours         30 hours      16 hours
                                                  hours

                                                                                            

Portfolio of
Evidence                                  Compilation of Portfolio of Evidence
Complementary
workplace                            Coaching and Mentoring; Performance Management
practices



Training plan
The unit standard carries 40 credits, which implies a total of 400 notional hours of learning.
This learning is spread over 6 months and involves both classroom activities and on-the-job
training. The learning programme has the following structure:

    1. First week of continuous training – some 6 hours of training each day
    2. During the next 20 to 24 weeks you will receive some 15 to 18 hours of on-the-job
       training and structured coaching per week – more about this later
    3. After that there will be some time to complete outstanding assignments and projects
       and submit these for final evaluation.


This week’s formal training programme
The next five days provide the background to training that will follow. The structure of this
week is as follows:

                    Day        Topic covered
                               Introduction
                    Day 1
                               Purpose of underwriting
                               Purpose of underwriting – continued
                    Day 2      Our company and its products
                               Our underwriting procedures
                               Our underwriting procedures – continued
                    Day 3      Source material for underwriting
                               Limits of authority
                               Medical pathology
                    Day 4
                               Occupational and avocational risks




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Level 4, 40 Credits
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                   Day    Topic covered
                          LOA protocols
                          Financial underwriting and insurable interest
                  Day 5
                          Medical schemes underwriting
                          Recap and summary




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Level 4, 40 Credits
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Agenda for Day 1
In more detail, the first day will run as follows:

08h30     Introduction                       Welcome – facilitator
  to                                         Overview of the NQF – a brief recap
10h30                                        Summary of the unit standard and an outline of the
                                              course structure – facilitator
                                             Introductions and expectations discussion – group
                                              work and feedback
11h00     Introduction – continued           The assessment process – assessment instruments
  to                                          used and map to unit standards – facilitator
12h30                                        On compiling a portfolio of evidence for this unit
                                              standard – facilitator
                                             Discussion of assessment and evidence process –
                                              group work
13h30     Introduction – continued           Feedback on group discussion of portfolio of evidence
  to      Purpose of underwriting             – facilitated session
15h00                                        Why underwrite? – facilitator introduction, followed by
                                              group discussion and feedback
15h30     Purpose of underwriting –          What type(s) of underwriting should take place and
  to      continued                           why is it useful? – facilitator introduction, followed by
16h30                                         group discussion and feedback


The National Qualifications Framework (NQF)

By now you should be familiar with the National Qualifications Framework (NQF). Should you
need to review the NQF we recommend that you do this by consulting the note “National
Qualifications Framework generic material”. The facilitator should have a copy available.


This unit standard
The unit standard is laid out on the pages that follow.

Note that you will need to gather evidence against all the outcomes and assessment criteria
contained in this unit standard. This evidence will be compiled in a portfolio and will need to
be verifiable as your own work and, of course, meet the standard imposed by the unit
standard.

The nature of the assessment instruments used is discussed later.




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Level 4, 40 Credits
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1. TITLE:     Underwrite a standard risk in long term insurance.


2. UNIT STANDARD NUMBER:            14433


3. LEVEL:                   4

4. CREDITS:                 40

5. FIELD:                   Business, Commerce and Management Studies
  Sub Field                 Finance, Economics and Accounting


6. ISSUE DATE:              5th December 2001

7. REVIEW DATE:             5th December 2004

8. PURPOSE:
   The key purpose of underwriting risk in long term insurance is to protect the company
   from unfavourable claims experienced due to mortality, morbidity and anti-selection.

    The qualifying learner is capable of:
     Gathering information and assessing the risk.
     Interpreting and evaluating medical data for underwriting purposes.
     Demonstrating knowledge and understanding of the risks involved in underwriting
       lives.
     Making use of resources in assessing long term risk
     Making an underwriting decision within own authority limit.

9. LEARNING ASSUMED TO BE IN PLACE:

   There is open access to this unit standard.         Learners should be competent in
   communication and mathematical literacy at Level 3 and know the products marketed by a
   long term insurance organisation.

   Practical work experience
   Before being credited with this unit standard learners are required to have a minimum of 40
   hours experience in long term underwriting.




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Level 4, 40 Credits
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10.    SPECIFIC OUTCOMES AND ASSESSMENT CRITERIA:

       Specific Outcome 1:        Gather information and assess the risk.

       Assessment Criteria

       1.1    The basic purpose of underwriting risk is known and explained with particular
              reference to long term insurance.

       1.2    The underwriting criteria to be considered for long term insurance are known
              and explained according to company policy and/or treaties with reinsurers.

       1.3    The proposal form is analysed for factors of more than average risk based on
              the specific product and company guidelines.

       1.4    Broad underwriting specific knowledge and company guidelines are applied to
              the information gathered and any additional information that may be required is
              identified and collected in accordance with the relevant protocols.

       1.5    Any high risk is identified in accordance with company policy.

       1.6    All relevant information is considered and used to create a synopsis in
              accordance with company policy.

       Specific Outcome 2:        Interpret and evaluate medical data for underwriting
                                  purposes.

       Assessment Criteria

       2.1    Terminology associated with pathology and the normal functioning of the body
              is known and understood as detailed in company specific reference manuals.

       2.2    Medical information is interpreted and a decision is made to underwrite as a
              standard life or to refer the case to a senior underwriter.


       Specific Outcome 3         Know and understand             the   risks   involved   in
                                  underwriting lives.

       Assessment Criteria

       3.1    The rationale for classifying occupations, avocations and hazardous pursuits
              into categories is known and explained and a loading is applied in accordance
              with the rules of the company.

       3.2    The concept of a nominated occupation and the significance of avocations are
              known and understood relative to the disability risk.

       3.3    Occupation categories are defined and used to assess occupation risk based
              on a risk profile.




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Level 4, 40 Credits
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       3.4    All the risks that affect mortality are known and identified in accordance with the
              company policy.

       3.5    All the risks that affect morbidity are known and identified in accordance with
              the company policy.

       3.6    Automatic exclusions, the rationale for such exclusions and the implications for
              the applicant are known and applied according to company and life insurance
              industry practice.

       3.7    Rules regarding the limitation of disability and exclusions relating to disability
              claims are known and implemented according to company policy and
              procedure.

       3.8    Financial risks associated with age, income and total cover are identified and
              decisions are made to restrict the cover or grant the cover according to
              company policy and life insurance industry practice.

       3.9    Underwriting restrictions that can be imposed by a Healthcare Benefits
              Administrator are identified in terms of the Medical Schemes Act and
              Regulations.

       3.10   The concept of insurable interest is understood and applied in accordance with
              financial and legal practices.


       Specific Outcome 4:        Make use of resources in assessing long term risk.

       Assessment Criteria

       4.1    A variety of sources of information is used and the relative value of each source
              and the consequences of not having / using such a source is known and
              understood in the context of assessing long term risk.

       4.2    LOA protocols are known and understood in the context of assessing long term
              risk.



       Specific Outcome 5:        Make an underwriting decision.

       Assessment Criteria

       5.1    The principles of assessing risk are known and understood in terms of the
              company’s products and industry practice.

       5.2    The rationale for the application of underwriting criteria is understood and
              explained in relation to the company’s products and industry practice.

       5.3    A decision is made in accordance with own authority limit or product and the
              case is referred to a senior underwriter if it exceeds this level.


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Level 4, 40 Credits
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       5.4    The implications of a signed declaration are understood and interpreted
              according to company and legal requirements.

       5.5    The protocols to be followed with reinsurers are known and applied according
              to company policy and treaties with reinsurers.

       5.6    Decisions with regard to interpretation limits are made according to company
              policy.

       5.7    Underwriting principles and practices are applied consistently making decisions.


11.    ACCREDITATION AND MODERATION:

       This unit standard will be internally assessed by the provider and moderated by a
       moderator registered by INSQA or a relevant accredited ETQA. The mechanisms and
       requirements for moderation are contained in the document obtainable from INSQA,
                      INSQA framework for assessment and moderation.


12.    RANGE STATEMENT:
       The typical scope of this unit standard is:
       1. Sources of information include company products; rating manual (company or
          reinsurance company); underwriter’s easy guidelines; medical dictionaries; the
          Merc manual and other text books; MIMS index; SAMDC register of doctors and
          dentists; underwriting reference library; LOA life registry system; Internet; relevant
          Insurance Acts; the Chief Medical Officer.
       2. A high risk includes financial, legal, medical abnormalities, avocation, occupation
          and environmental risks.
       3. Terminology related to pathology includes all systems of the body, anatomy,
          physiology and health impairments.
       4. Protocols include: replacement agreement; disability agreement
       5. Authority limits determined by the amount of the sum insured in relation to a
          particular product.


13.    NOTES:

             CRITICAL CROSS-FIELD and DEVELOPMENTAL OUTCOMES:

              This unit standard supports in particular, the following critical cross field
              outcomes at unit standard level:

               1.    Recognise potential problems and make a decision to underwrite as a
                     standard risk or to refer a case to a senior underwriter.
               2.    Recognise the need to work effectively as a member of a team in order to
                     assess a risk to the benefit of the client and acceptable risk to the company.
               3.    Organise and manage own activities responsibly and effectively to maximise
                     productivity and provide an efficient service to clients.
               4.    Collect, organise and evaluate information in order to underwrite a standard
                     long term risk.


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Level 4, 40 Credits
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               5.    Communicate effectively in order to explain the rationale for underwriting
                     decisions and create a written synopsis of information relevant to a case
               6.    Use a computer to assist in processing information required to assess long
                     term risk.
               7.    Recognise that decisions are not made in isolation and that a variety of
                     systems are involved in assessing long term risk.

             EMBEDDED KNOWLEDGE
              To enable competent performance and achievement the learner can
               Understand and explain company policy.
               Understand and explain relevant LOA codes.
               Apply basic computer skills and use an electronic data base to access and
                 record information.
               Understand and explain the normal functioning of the body and associated
                 pathology.
               Know and can explain what constitutes a long term insurance risk.

       Practical work experience
       Before being credited with this unit standard learners are required to have a minimum
       of 40 hours experience in long term underwriting.




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Level 4, 40 Credits
                                                                                      Page 42




Introduction to this course

Your expectations

Group exercise: Identify your expectations and concerns about this five day course as
well as the remaining training on this unit standard.
Instructions to learners:
1. Meet in groups of 3 to 5.
2. Your group meeting should last no more than 20 minutes.
3. Appoint a scribe/presenter (the facilitator may do this for you).
4. Discuss your expectations and concerns about this course as well as the remaining
    training for this unit standard.
5. Return to the main group – your scribe/presenter will give the feedback from your group
    after which the topic will be open for discussion in the larger group.
6. The following questions and space for notes may help your discussions.
What do you hope to achieve          {FACILITATOR: You should reflect underwriting as a career
as an underwriter?                   that requires high levels of ethics and competency. It
                                     carries good rewards in terms of job satisfaction and
                                     remuneration for those who are successful.}




How do you think this course      {FACILITATOR: The course prepares the learner for
will assist you?                  assessment. It is a step on the road to becoming an
                                  underwriter.}




What concerns do you have         {FACILITATOR: Try to anticipate concerns – course too
about the training process for    hard, lack of medical knowledge, maybe course too basic…}
this 5-day course?




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Level 4, 40 Credits
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What concerns do you have           {FACILITATOR: Again, anticipate concerns – as above,
about the on-going training         probably including concerns about the volume of work.}
after this initial 5-day period has
finished? Are there any
barriers to your learning?




With the above in mind, what        {FACILITATOR: Ensure that objectives are reasonable and
are the most important              attainable. If unattainable, try to negotiate lower goals with
objectives for the training days?   learners.}




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Level 4, 40 Credits
                                                                                         Page 44




The assessment process
This course has been designed with a number of assessment instruments incorporated in the
training material. Some of these assessments will be used as formative assessments, i.e.
they will inform you (as the learner) and the facilitator about your progress against the
assessment criteria. This will allow you the opportunity to seek further training if and when
required.

In addition to the learner material you will receive an assessment pack. Details of portfolio
requirements are included in that pack.


Note:

You should check the following sections of the assessment pack for clarity on how you
will be assessed:

1. Assessment instrument checklist.
2. Assessment instrument map to assessment criteria.

A significant part of the work required in compiling the evidence will be devoted to the practical
work. The assessment instruments have been designed to allow the practical collation of
evidence, on a case-by-case basis where necessary. Over time you will become more
proficient at carrying out underwriting of cases. The volume of work that you do will make
case-by-case assessments unduly onerous and there is therefore a “batch” form for assessing
your work.

The requirements for critical cross-field and developmental outcomes and embedded
knowledge are covered in the assessment instrument map. A summary of where these items
are covered are included as a checked matrix at the end of the map.

Note that the assessment instruments do include requests for feedback from your supervisor
and colleagues. As part of your planning you need to consider who will be asked to provide
that feedback.


Your portfolio of evidence
Your final assessment of competence will be done on the portfolio of evidence that you submit.
This portfolio will contain all the signed-off assessment instruments that were collated over the
period that you prepared for assessment. The assessment instruments that you have looked
at will all form part of that process.

Some points about the assessment process:

1. Presentation: In order to compile your portfolio of evidence you should open a file that will
   contain all your evidence. You should divide the file into sections, covering the various
   types of assessment instrument, as well as support material (copies of practice notes,
   etc.).
2. Submission: Your portfolio is to be submitted in writing to the course facilitator at the
   address provided.


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3. Deadline: You need to submit your final portfolio for assessment within 8 months of
   completion of this course. If you not do so your company may be charged an additional
   assessment fee when you finally do submit your portfolio.
4. The process: You need to submit one copy of your portfolio. The assessor will complete
   the assessment within 14 days of submission. Thereafter your portfolio will be returned to
   you, along with formal notification of the results of the assessment. You should keep your
   portfolio and the assessment filed securely for future reference.
5. Your rights: If you are not satisfied with your assessment you may challenge the outcome.
   The challenge should be submitted to the assessor in writing within 14 days of you
   receiving your returned portfolio. You should also send a copy of your challenge to the
   moderator. You also have the right to be re-assessed on any areas where you have not
   demonstrated competence to the assessor.

Note: You must keep your copy of your portfolio for future reference. Apart from its
practical use it is possible an external moderator may wish to review your portfolio.




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Level 4, 40 Credits
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Compiling of portfolio – group discussion

Group exercise: Identify practical ways of compiling your portfolio of evidence for this
unit standard.
Instructions to learners:
1. Meet in groups of 3 to 5.
2. Your group meeting should last no more than 30 minutes.
3. Appoint a scribe/presenter (the facilitator may do this for you).
4. Discuss how you will compile a portfolio of evidence for this unit standard and what support
    you might need in doing so.
5. Return to the main group – your scribe/presenter will give the feedback from your group
    after which the topic will be open for discussion in the larger group.
6. The following questions and space for notes may help your discussions.
What main sections might you        {FACILITATOR: Prepare to guide this by looking at the
include in your file?               assessment rubric, especially the portfolio of evidence
                                    guidelines and the assessment on the creation of the
                                    learner’s reference file.}


Who is likely to be involved in   {FACILITATOR: Have names of assessor, moderator and
assessing your work and           supervisor ready.}
certifying you as competent
against the specific outcomes
and assessment criteria?

What can be done to lighten the   {FACILITATOR: Suggest group work – sharing reading and
load in project work and          then presenting summaries to colleagues.}
reading/research work?



What obstacles do you see in      {FACILITATOR: Take careful note of these obstacles – they
compiling your evidence?          will need to be addressed.}




How might you overcome these      {FACILITATOR: Take careful note of these – they will need
obstacles?                        to be addressed.}




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Level 4, 40 Credits
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Why underwrite?
In this context underwriting is taken as a process of selecting:
    1. Which clients an insurer is prepared to accept at standard terms
    2. Which clients an insurer is prepared to accept at modified terms (*)
    3. Which clients an insurer is not prepared to accept
    4. Which clients an insurer may be prepared to accept at a later stage

(*)    Modified terms include higher premiums, restrictions on benefits and special
       exclusions.

The underwriting process includes the assessment of medical, occupational, financial and
other information in order to make this selection. Underwriting can involve other parties, such
as reinsurers, as well.

Underwriting is a costly process. The insurer has to pay doctors and others for information
and employ underwriters to assess each case that is submitted. The insurer therefore must
have positive reasons for incurring this cost.

Similarly, the South African constitution (and others) prohibits discrimination on the basis of,
amongst other factors, health status. There must be reasons why insurers are allowed to
differentiate the terms that they offer to healthy and unhealthy persons.

At the start of this section the word “selecting” is underlined. The term “selection“ is used in
the context of insurance applications to indicate that some process is followed whereby a
particular group might have better or worse rates of claims than others. Some examples:

1. Temporary initial selection: Observed when cases are underwritten by the insurer.
   Persons insured under new policies are, on average, healthier because they have recently
   had to prove that they are in good health. This characteristic is “temporary” because over
   the years the selected individuals would tend towards the average state of health of
   insured persons.
2. Self selection: Some types of policy are not attractive to people in very poor health. The
   best example would be a policy that pays out if the person survives (such as a pension or
   annuity policy). Only people in reasonable to good health would want to take out such a
   policy, therefore those taking out these policies tend to be in better health (on average!)
   than those who do not.
3. Structural selection: Some groups of people tend to have higher standards of health for
   structural reasons. An example is that actively employed people are, on average, healthier
   than those that are not employed. Part of this is because employed people can afford
   better health-care, nutrition, personal security, etc. Another reason is that people in very
   poor health are often unable to obtain employment and so they lower the average for those
   who are unemployed.
4. Anti-selection: Anti-selection occurs to the extent that individuals strive to benefit from gaps
   or loopholes in a process. An individual who is in poor health would look for ways of
   obtaining insurance without having to pay heavy loadings. He/she may look for additional
   insurance in order to provide well for his/her family. This could be achieved by looking for
   insurers that have lax underwriting controls or by seeking employment with a company that
   provides generous benefits on death or disability. NOTE: Anti-selection is not fraud; it is
   merely an example of individuals exercising their rights to their own advantage.



Day 1: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 48



One might consider what happens when anti-selection continues unchecked. The result might
be as follows (although there may be practical reasons why this would not occur):

1. Due to the anti-selection process the insurer would pay out more claims than it would
   expect to.
2. The insurer has to increase premiums in order to avoid making losses on the business.
3. Due to high premiums the policies are not attractive to people in reasonably good health –
   they can obtain cheaper policies elsewhere.
4. Only the less healthy people buy policies from the insurer, therefore the claims situation
   gets worse, and the insurer has to increase premiums again.
5. The policies are now unattractive to people in modestly poor health, so they buy
   elsewhere. Only those in poor to very poor health buy from the insurer.
6. Premiums have to increase again, etc.




Day 1: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                        Page 49




Why underwrite – exercise

Group exercise: Defend the insurer’s right to underwrite.
Instructions to learners:
1. Meet in groups of 3 to 5.
2. Your group meeting should last no more than 30 minutes.
3. Appoint a scribe/presenter (the facilitator may do this for you).
4. Try to answer the allegations posed below.
5. Return to the main group – your scribe/presenter will give the feedback from your group
    after which the topic will be open for discussion in the larger group.
6. The following questions and space for notes may help your discussions.
Criticism 1: “There is no sound     {FACILITATOR: A key point is that if unhealthy lives select
reason to underwrite life           higher covers than they would have the “averaging” is
insurance policies. Insurers        distorted. This pushes up rates until insurance becomes
cover thousands or millions of      unaffordable to all except those who intend to claim soon…}
people, so in the long run the
experience of all policies will
tend to average out at a middle-
of-the-road state of health.”



Criticism 2: “It is not right to   {FACILITATOR: Two points – a) they are not forced to
underwrite insurance policies.     disclose; they could not take out the policy. b) Medical info
By doing so individuals have to    disclosed to an insurer is subject to highest standards of
disclose medical information       confidentiality.}
which should be confidential –
they should not be forced to
make these disclosures.”




Criticism 3: “Underwriting         {FACILITATOR: This is a possibility. There could be a
should not be allowed, at least    central register where everyone with life cover is recorded.
for policies where the cover       All citizens could take out basic life cover, up to a
does not exceed R100.000.          reasonable amount, without evidence of health. It would
Insurers should only be allowed    help if there is an agreement that you cannot have life cover
to underwrite larger policies in   over this amount until you have first taken the compulsory
order to ensure that everyone,     cover – at the going “average” rate!}
at least, gets a basic level of
insurance cover.”




Day 1: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                        Page 50



General issues in underwriting
There are several issues concerning underwriting that are worth discussion at this stage as
background information:

1. Underwriting and the constitution: As already indicated the constitution prohibits
   discrimination on the grounds of, amongst other matters, state of health. Insurers have to
   justify their right to underwrite insurance policies.

2. Other legislation: There are a number of items of legislation that can impact on
   underwriting philosophy. These include legislation governing the ways in which govern the
   ways that insurance is sold (e.g. the Financial Advisors and Intermediary Services Act
   (FAIS) and the Policyholders Protection Regulations (PPR)) as well as Access to
   Information legislation.

3. Cooling-off periods: Note that new policyholders have the right to cancel policies from
   inception after a cooling-off period.

4. Pricing of products by actuaries: The team that designs a product and the actuaries
   who determine the price of that product will have taken into account the level of
   underwriting that will take place. The company’s underwriting philosophy should take
   correspond to the assumptions in the pricing basis.

5. Brokers versus agents (or advisors): The insurer has a different legal relationship with
   brokers than it does with its in-house advisors. The broker can be assumed to represent
   the applicant for insurance whereas the in-house advisor should be representing the
   insurance company. The underwriting philosophy should take into account which
   distribution arm is being used.

6. Company niche: Note that different insurers operate in different sectors of the market.
   Their rates will reflect their main sectors of operation and their underwriting philosophy
   should be consistent with the level of these standards and the market in which they
   operate. Note that larger companies tend to operate across all sectors of the market.

7. Reinsurers: Reinsurers are the wholesalers to the industry. They tend to have
   specialised underwriters that are able to assess certain risks more accurately. Note that
   reinsurers often do not have any significant investment portion in the business that they
   conduct, therefore it is very important for them to rate the business accurately (usually
   more so than would be the case for a direct insurer).

8. Commission: The fact that different products pay different levels of commission creates
   incentives for brokers/agents to sell some products more than others. They also have an
   interest in policies being accepted at standard rates whether or not the applicant is in good
   health. Underwriters need to be aware of this and not always take what a broker or agent
   says at face value. There is also the issue of “churning” where brokers or agents persuade
   individuals to cancel and existing policy in order to take out a new one (thus giving the
   broker or agent a large commission in the first year of the policy).

9. Other players: There are other players who may take a role in overseeing policies sold.
   These include:
          a. The LOA, who have developed numerous protocols covering the selling of
              insurance.


Day 1: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                      Page 51



           b. The Registrar of Insurance and the Financial Services Board, who govern the
              legislation and regulations surrounding insurance.
           c. The Ombudsman (or Ombud) for long term insurance, who decides on any
              cases or complaints brought by policyholders.

10. The role of the underwriter: The underwriter plays a professional role in managing the
    relationship between applicants for insurance, the broker/agent and the long term insurer.
    The underwriter has to build relationships and give excellent service the broker/agent and
    the client/applicant. At the same time, the underwriter has to work as a “gate-keeper” to
    protect the interests of the insurer. The underwriter may be called upon to handle personal
    difficulties in a sensitive manner, for example where an applicant is found to have a life-
    threatening illness.

These issues will raise themselves again during the duration of this programme.




Day 1: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                         Page 52




Types of underwriting
There are many different types of underwriting that you could identify. The following is a list of
types of underwriting.

1.   Structural underwriting
2.   Medical underwriting
3.   Genetic underwriting
4.   Occupational underwriting
5.   Lifestyle underwriting
6.   Avocational underwriting
7.   Geographical underwriting
8.   Financial underwriting
9.   Legal underwriting

The definitions of these types will follow.

The most important task carried out by underwriters of long-term insurance tends to be item#2.
However, it is important to note that this is not the only form of underwriting and that the
underwriter will use most, if not all, of the other types of underwriting in forming decisions
related to the terms to be offered.

What follows is a group task to explore the different types of underwriting.

After the group task is an exercise where you could try to match the type of underwriting to its
definition. This exercise is available as a formative assessment. If you choose to do so you
can complete this assessment on your own and hand it to the facilitator for marking. Note that
if you complete this exercise satisfactorily you will have your first item in your portfolio of
evidence for this unit standard.




Day 1: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 53




Types of underwriting – exercise

Group exercise: Consider different types of underwriting and how they might be used
Instructions to learners:
1. Meet in groups of 3 to 5.
2. Your group meeting should last no more than 30 minutes
3. Appoint a scribe/presenter (the facilitator may do this for you)
4. Discuss the usefulness or otherwise of the underwriting practices set out below, or
    alternatively answer the questions posed
5. Return to the main group – your scribe/presenter will give the feedback from your group
    after which the topic will be open for discussion in the larger group
6. The following questions and space for notes may help your discussions
Which of the following policies would
have the greater chance of incurring a
claim (and why):
 One where it is sold by newspaper
    advertisement with limited benefits in
    the early years?
                                                           Structural
 One sold to members of a fitness and
    lifestyle programme who have been
    carefully assessed?
Suggest five types of medical evidence
that an underwriter might consider when
assessing cases. Ensure that you keep
this list; fill it up with suggestions from
other groups and from the facilitator.

{FACILITATOR: Types might include:
 Non-medical questionnaires
   (applicant’s own assessment).
 Medical attendant’s reports (extracts
   from records).                                           Medical
 Medicals done by a general
   practitioner.
 Medicals done by a specialist (usually
   a physician)
 ECGs
 Chest X-Rays
 Lung function tests
 Sundry blood tests (including HIV)
 Etc.}
Why would insurers choose not to
underwrite using detailed genetic testing?
On the other hand, why might they
consider hereditary diseases? Can you                       Genetic
name any hereditary diseases?




Day 1: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                 Page 54



Which is safer – being a bank manager or
being an engineer on-site building a
dam? Motivate your answer.
                                                        Occupational

How might a good education affect your
chances of claiming for life insurance?
Also consider how good/bad habits affect
your chances of living or dying.                            Lifestyle

Can you identify a few dangerous
pastimes or hobbies?

                                                         Avocational

How does where you are affect your
chances of dying – as a group try to think
of at least four factors that might make
somewhere safe or dangerous.                           Geographical

An individual applies for life insurance
cover of R25 million. After stringent
underwriting the insurer issues the policy.
The most stringent aspect of the
underwriting is an assessment of financial                 Financial
information. What financial information
could the insurer have requested, and
why?
An insurer issues a policy of R1million on
the life of an individual. The buyer of the
policy is the individual’s neighbour. The
buyer then murders the individual in order
to claim the proceeds of the policy.
Should the insurer be held liable for
                                                              Leg al
issuing the policy? What could the
insurer do in order to prevent this
situation from arising?

{FACILITATOR: If you have any doubts about the answers to these questions then discuss
them with a senior underwriter prior to the training.}




Day 1: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                            Page 55




Types of underwriting – formative assessment

Formative assessment – Maps to Assessment criterion 1.1 of unit standard 14433
Underwrite a standard risk in Long-Term Insurance
Learner’s name:


Instructions to learner:
1. If you want this exercise assessed you must fill in your name above as well as sign off (and
    date) the items at the end of this assessment.
2. Look at the types of underwriting listed below (numbered 1 to 9) and see definition applies
    (choose A to I). Fill in the relevant letter under “Maps to”.
3. Note that there are nine types of underwriting listed and nine definitions. There is one type
    per definition (no duplicates or omissions).
Type of underwriting                Maps to Underwriting relates to
1. Avocational underwriting                      A. An individuals hobbies and pastimes
2. Financial underwriting                        B. Dangers inherent in an individual’s occupation
3. Genetic underwriting                          C. Ensuring that a policy that is issued falls within
                                                    the requirements imposed by law (e.g. laws on
                                                    maximum policy size for minors); could
                                                    similarly be taken as ensuring that policies fall
                                                    within the limits imposed by the insurer’s
                                                    internal rules and regulations.
4. Geographical underwriting                     D. Health aspects or tendencies that the
                                                    individual may have inherited
5. Legal underwriting                            E. Socio-economic groups and education levels
                                                    (could also include factors such as gym
                                                    membership and usage), as well as personal
                                                    habits (smoking, drinking, etc.)
6. Lifestyle underwriting                        F. The individual’s state of health
7. Medical underwriting                          G. The relationship between an individual’s
                                                    financial position and the amount of insurance
                                                    granted
8. Occupational underwriting                     H. The way policies are designed, priced and
                                                    sold
9. Structural underwriting                       I. Where an individual lives, works or travels
Date written

Candidates signature
Number assessed as
correct:


Facilitator’s comments:



Facilitator’s signature:                                         Date:



Day 1: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                         Page 56



         Underwrite a standard risk in long-term insurance
Day 2 – Facilitator Notes
Read these notes in conjunction with the learner material for Day 2.


Preparation for day 2
   Complete your normal preparation checklist concerning venue, facilities, meal arrangements
    and material arrangements.
   Mark any formative assessments submitted by learners.
   Arrange copies of those formative assessments for learners who may wish to repeat the
    exercise(s).
   Ensure that product experts have been invited to speak on the company’s products, have
    been adequately briefed and that their presentation requirements have been met (i.e.
    overhead projects, multimedia projectors, etc.)
   Ensure that the facilitator is in possession of the company’s underwriting procedures or that
    an experienced underwriter will be on hand to explain those procedures.


Agenda for today

 08h30 to     Day 2 welcome         Summary of day 1
  08h45                             Set scene for day 2
 08h45 to     Purpose of            Draft a statement on the purpose of underwriting
  10h30       underwriting –         (60 minutes) – facilitator introduction, followed by
              continued              group discussion and feedback
                                    Summary of the purpose of underwriting and
                                     consolidation of purpose statement (30 minutes) –
                                     facilitator
                                    Formative assessment on purpose of underwriting
                                     (15 minutes)
                                    Note that if satisfactory this initial formative
                                     assessment can be included in the portfolio of
                                     evidence as a summative assessment
 11h00 to     Our company           Introduction to company’s products (15 minutes) –
  12h30       and its products       facilitator
                                    Overview of different sub-sets of the company’s
                                     products (75 minutes) – structured presentations of
                                     all company’s products that carry risk, and others if
                                     time allows; should cover:
                                     all business units of the company, including
                                     group/individual
                                    all products, including standard lines, credit life
                                     insurance, funeral policies, etc.
 13h30 to     Our company           Exercise: Identify what risks are covered by the
  15h00       and its products       products and what other risks exist, e.g. moral
              – continued            hazard (90 minutes) – facilitator introduction,
                                     followed by group discussion and feedback

Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                           Page 57



 15h30 to     Our underwriting       Established underwriting procedures within the
  16h30       procedures              company (180 minutes) – facilitator; should spend
                                      15 minutes on each of the following, giving learners
                                      time to discuss, ask questions and make notes:
                                          o how cases are received
                                          o how they are recorded on receipt
                                          o the opening of an underwriting file
                                          o what information is recorded on the file
                                          o what information is recorded electronically
                                              (and where)
                                          o the processes involved in checking the LOA
                                              register
                                          o the steps followed in assessing the case
                                          o process for referral to senior underwriters
                                          o process for referral to CMO
                                          o process for referral to reinsurers
                                          o how decisions are recorded
                                          o how decisions are communicated
                                          o how confidentiality is maintained


The welcome
The welcome covers:
1. A quick review of the 5 days of material to be covered
2. A brief recap of the material covered yesterday
3. A look at the agenda for today (as given in the learner material)
4. A hand back, with general comment, of any of exercises handed in for assessment


Purpose of underwriting
On Day 1 the learners considered reasons to justify underwriting. The process may have been
a little challenging, but they should have heard some arguments in favour of underwriting as
well as developing a sense of what underwriting is (and what elements are included in their
underwriting process).

On Day 2 the group has two exercises related to the purpose of underwriting. The first asks
further questions that should take them as far as understanding the main issues that the
underwriting process seeks to address.

In the second of these exercises they should aim to generate their own definition of the purpose
of underwriting. The exercise leads through various issues, which should generate a definition
that is a sensible approximation to the text-book definition given below. Note that the text-book
definition should only be provided once the learners have completed the exercise.

The purpose of underwriting is:
1. To discourage higher risk persons from taking out unduly large insurance policies
2. To adjust the premium charged to a policy so that it is appropriate for the level of risk carried
   by the insurer
3. To prevent fraud against the insurer
4. To ensure that laws relating to “insurable interest” are enforced



Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                           Page 58



After completing their own definition of the purpose of underwriting the learners can undergo a
formative assessment. Again, they could hand this assessment in for marking. If a learner
completes the exercise satisfactorily then the result could be included in the portfolio of
evidence as evidence against assessment criteria 1.1, 1.2 and 1.4.

Recommendations for the facilitator:
1. Be prepared to take in and mark these formative assessments for handing back at the start
   of day 3.
2. Have spare copies of the assessment available for learners who need fresh copies (for
   whatever reason).


Company products
The discussion of the insurance company’s products is scheduled to take place over two
sessions of 1½ hours each. The material has been drawn up along generic lines, i.e. covers
generic products and not company specific products – it could be used as is when training
underwriters at reinsurance companies. For direct insurers, it is recommended that you
supplement this material with specific examples of company products, or co-opt product
managers to help you do so.

Introduction: As an introduction you should point out to the learners how you are going to tackle
the company’s products. You should mention any areas that you are not going to cover that
they might need to research for themselves.

Presentation: If the facilitator has the expertise then s/he could present the various products to
the learners. If not s/he should co-opt product managers to assist him/her. S/he could draw on
other sources of material such as company rate-books, product specifications, marketing
material, etc. If available, learners should receive copies of this material for their own resource
files.

Exercise: After general discussion of various products the learners will carry out the exercise
identifying the types of risk associated with the products. Given that the exercise last 90
minutes, and some 30 minutes would be set aside for feedback and general discussion, the
break-out groups will have about 60 minutes to discuss various products. At 10 minutes per
product this works out at a maximum of 6 products per group. The facilitator should, if
necessary, allocate products to groups so that all the most important products (or product types)
are covered.


Underwriting procedures

The learners need to understand what procedures are followed by the company and why these
procedures are followed. It is possible to break the learners into groups for discussion of each
of these procedures but it is recommended that these be done as part of a whole group/class
discussion (in order to ensure clarity and uniformity on what the procedures are and how they
should be followed).

In order to prepare for this section the facilitator should ensure that s/he is fully aware of what
the company procedures are or has access to a company manual or an experience underwriter
who is capable of explaining the procedures.



Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                           Page 59



We have listed 14 distinct procedures, namely:

1. how cases are received
2. how they are recorded on receipt
3. the opening of an underwriting file
4. what information is recorded on the file
5. what information is recorded electronically (and where)
6. the processes involved in checking the LOA register
7. the steps followed in assessing the case
8. process for referral to senior underwriters
9. process for referral to CMO
10. process for referral to reinsurers
11. how decisions are recorded
12. how decisions are communicated
13. how confidentiality is maintained

It is possible that there may be other important procedures that are not listed here. If time
permits it would be useful to add them to the list.




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                          Page 60



         Underwrite a standard risk in long-term insurance
Day 2 – Learner Material


Objectives for today

By the end of today you should:
1. Understand the purpose of underwriting.
2. Know broadly what products your sells and how these might be underwritten.
3. Know some of the steps involved in the underwriting process at your company.


Introduction – day 2

As a reminder, the following is the five-day programme:

                     Day    Topic covered
                            Introduction
                    Day 1
                            Purpose of underwriting
                            Purpose of underwriting – continued
                    Day 2   Our company and its products
                            Our underwriting procedures
                            Our underwriting procedures – continued
                    Day 3   Source material for underwriting
                            Limits of authority
                            Medical pathology
                    Day 4
                            Occupational and avocational risks
                            LOA protocols
                            Financial underwriting and insurable interest
                    Day 5
                            Medical schemes underwriting
                            Recap and summary


Agenda for Day 2
In more detail, the second day will run as follows:

  08h30 to      Day 2 welcome              Summary of day 1
   08h45                                   Set scene for day 2
  08h45 to      Purpose of                 Draft a statement on the purpose of underwriting –
   10h30        underwriting –              facilitator introduction, followed by group discussion
                continued                   and feedback
                                           Summary of the purpose of underwriting and
                                            consolidation of purpose statement – facilitator
                                           Formative assessment on purpose of underwriting




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                      Page 61



  11h00 to     Our company and its       Introduction to company’s products – facilitator
   12h30       products                  Overview of different sub-sets of the company’s
                                          products – structured presentations of all company’s
                                          products that carry risk
  13h30 to     Our company and its       Exercise: Identify what risks are covered by the
   15h00       products – continued       products and what other risks exist, e.g. moral
                                          hazard – facilitator introduction, followed by group
                                          discussion and feedback
  15h30 to     Our underwriting          Established underwriting procedures within the
   16h30       procedures                 company – facilitator




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                           Page 62




Purpose of underwriting
Having considered why insurers underwrite applications and what types of underwriting they
can do it is possible to draft a statement of the purpose of underwriting. Rather than supplying
a glib statement it is preferable for learners to draw together the elements that have already
been discussed.

The foundation of your learning is a clear understanding of the purpose of underwriting. The
following exercise, to be completed in groups, should generate reasons why insurers underwrite
applications for insurance. You can also refer to the exercises completed during Day 1 to
remind yourself how you addressed criticisms of underwriting and what types of underwriting
you might consider sensible.

After completing the first exercise in groups there will be a final feedback session before
breaking into groups again in order to produce a concise definition of the purpose of
underwriting. This final exercise will bring together all your discussions of underwriting into a
single definition.

There will be an opportunity to complete a formative assessment on the purpose of underwriting
and types of underwriting used. If you like you would be able to submit this assessment to the
facilitator for marking and possible inclusion in your portfolio of evidence.




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                         Page 63




Purpose of underwriting – exercise 1

Group exercise: Produce a complete but concise definition of the purpose of
underwriting – Part 1: Highlight key issues
Instructions to learners:
1. Meet in groups of 3 to 5.
2. Your group meeting should last no more than 30 minutes.
3. Appoint a scribe/presenter (the facilitator may do this for you).
4. Try to answer the questions posed or follow the instructions given below.
5. Return to the main group – your scribe/presenter will give the feedback from your group
     after which the topic will be open for discussion in the larger group.
6. The following questions and space for notes may help your discussions.
If a company does not require         {FACILITATOR: The aim of these questions is to stimulate
any underwriting of individuals,      discussion and debate. Some of the answers appear
would healthy individuals take        obvious but one hopes that at least one learner will take a
out insurance policies?               contrary view – if none do then suggest it yourself and ask
                                      them to show that you’re wrong. Eventually we hope to lead
                                      to an informed underwriting philosophy consistent with the
                                      company’s own attitudes to underwriting.}


If a company does not require
any underwriting of individuals,
would unhealthy individuals
take out insurance policies?




Which of the two is more likely
to take out the larger policy?
Assume both have otherwise
identical personal and financial
circumstances and attitudes to
insurance.



Is it “fair” that insurers charge
more for people who have a
greater chance of claiming?




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 64



If it is “fair”, what might the
insurer do for someone in:
 Very good health?
 Average health?
 Poor health?
 Very poor health?
 The final stages of a
      terminal disease?

An insurer agrees to insure all
employees of a large company
for R500.000 each. The insurer
does not ask for any evidence
of health. Why?




A person in very good health,
who earns R5.000 per month,
applies for life insurance of
R25 million. The insurer
declines the application. Why?




A person with a history of
violent crime applies for a large
policy on the life of a neighbour.
The insurer declines the
application. Why?




A person applies for a life
insurance policy of R500.000 on
the life of his/her child. The
insurer declines the application.
Why?




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                             Page 65




Purpose of underwriting – exercise 2

Group exercise: Produce a complete but concise definition of the purpose of
underwriting – Part 2: Complete definition
Instructions to learners:
1. Meet in groups of 3 to 5.
2. Your group meeting should last no more than 30 minutes.
3. Appoint a scribe/presenter (the facilitator may do this for you).
4. Try to answer the questions posed or follow the instructions given below.
5. Return to the main group – your scribe/presenter will give the feedback from your group
    after which the topic will be open for discussion in the larger group.
6. The following questions and space for notes may help your discussions.
Define the purpose of                The purpose of underwriting is:
underwriting. Use your answers 1. To
above to assist you with your
definition. You should come up
with about 4 points.                 {FACILITATOR: The purpose should incorporate the
                                     following key points:
                                      Selection of lives.
                                      To protect the insurer.
                                      Consistent with affordable premium rates.
                                      Maintain fairness between healthy lives and various
                                          classes of unhealthy lives (e.g. charging different levels of
                                          extra premium depending on the severity of the
                                          impairment).
                                      Other general factors such as ensuring insurable interest,
                                          guarding against fraud, etc.}




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 66




Purpose of underwriting – formative assessment

Formative assessment – Maps to Assessment criteria 1.1, 1.2 and 1.4 of unit standard
14433 Underwrite a standard risk in Long-Term Insurance
Learner’s name:

Instructions to candidate:
    1. If you want this exercise assessed you must fill in your name above as well as sign off
       (and date) the items at the end of this assessment.
    2. Answer the following questions.
No. Question                                Answer                                 Assessment

      What is the basic purpose of
      underwriting in long term
 1
      insurance? Give at least 3 aims of
      underwriting.



      Name 5 different types of medical
      information that may be
 2
      considered when underwriting an
      individual.



      Explain why an individual’s
      financial position may be
 3
      considered in relation to a
      proposal for insurance.



      Name 2 other (non-medical, non-
      financial) factors concerning an
 4
      individual that should be
      considered when assessing a risk.


Date written

Candidates signature



Facilitator’s comments:



Facilitator’s signature:                                   Date:



Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                             Page 67




Company products
In order to be an effective underwriter you should have a good working knowledge of the
products that your company is selling (or supporting). The key items of information about an
insurance product, from an underwriting perspective, are:

1. When does the insurer pay out – on survival, death, disability, accident, health event, etc?
2. When does the policyholder pay – single premium up front or regular premiums throughout?
3. What level of rates applies to this policy – are the “standard” rates regarded as cheap or
   expensive?
4. How long are terms (e.g. premium rates) guaranteed?
5. How long is the life insured guaranteed cover – is the policy automatically renewable or
   must the life insured provide further evidence of good health?
6. Does the sum at risk increase, decrease or stay level over time? Note that the sum at risk is
   the difference between the amount payable on death/disability/etc. and the value of the
   reserves (investments) built up in the policy.
7. How is the business sold – through brokers, employed advisors (or agents), banks, retailers,
   call centre, mail-shot, etc?
8. Are there any particular features of the product that affect the risk – exclusions added or
   waived, added conditions under which benefits are payable, group or individual product,
   etc?

The underwriter needs to determine whether an applicant for insurance qualifies for standard
rates or not. The implications of a wrong decision for the insurer can vary from insignificant to
highly significant. This is dependent on the size of policy and the type of product that the
applicant has purchased. It is also dependent on what a “standard rate” is meant to be.

Let us consider these issues further. In the notes that follow we will consider the questions from
the point of view of “risk to the insurer”.

Size of risk: The significance of the underwriting will influence how much in the way of
resources the insurer is prepared to invest in underwriting. For example if the applicant has
applied for substantial cover then it is likely that the insurer will request extensive evidence of
health. If the application is for an investment only product, with no insurance cover, then no
evidence of health is required.

Nature of risk: Some products cover death, others disability and some cover critical illness.
Policies may pay out only on accident or they may claims arising due to all causes. Different
factors affect risk differently, for example a back injury may not be life-threatening but may carry
serious risks from a disability perspective.

Duration of risk: Some risks run off quickly whereas others can last for a long time. This may
influence whether or not a particular underwriting feature is a concern or not. If someone
applies for a 10-year endowment policy then an ailment that may affect mortality in 20 years
time is not relevant. On the other hand it would be relevant for a whole of life policy.

Standard rates: The concept of “standard rates” also varies from product to product. The
“standard rate” will depend upon a number of factors. As examples:
    1. The “standard rate” for a product intended for highly educated individuals who meet
       stringent health and lifestyle criteria would be low.



Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                           Page 68



   2. The “standard rate” for a product aimed at low-paid employees in heavy industry who
      are only expected to meet very basic underwriting requirements would be much higher.

Special risks and fraud: A product may carry special risks due to the way that it is designed,
packaged and sold. In particular, some products may be open to fraud. The underwriter must
be alert to these risks and be ready to respond to them. The insurer’s policies and procedures
should assist the underwriter to avoid these risks (which in turn means that it is a good idea for
the underwriter to follow company practice quite carefully). As examples:
    1. Companies require photo-identification of applicants who are undergoing HIV testing in
        order to ensure that an HIV-positive applicant does not have the test done on someone
        else in order to obtain cover.
    2. As occupation is a feature of disability insurance the underwriters require an accurate
        description of the occupation in order to assess the risk.


Product discussion
There are many types of products that are considered to be insurance products. In the ideal
situation you would receive presentations of all possible combinations of products. Time would
not allow this. At this stage one or both of the following should happen:

      You should receive presentations on selected products sold by your company
      You should consider the generic information provided to get an overview of the general
       types of insurance product available.

Special mention must be made of “new age” products. Product development is constant and
on-going and new products may have special features that underwriters may need to take into
account. Some examples include:

1. “Disability” products that focus on functional impairment rather than occupational disability.
   These include products that cover Activities of Daily Work (ADWs) and Activities of Daily
   Living (ADLs). Specific risks related to the impairments covered must be considered.
2. Some disability income products incorporate shorter waiting periods (e.g. 7 days). Potential
   short-term illnesses become much more relevant.
3. Critical illness policies that pay out on an extended range of illnesses, sometimes at various
   levels according to severity. Risks that are specific to cases where a large amount will be
   paid out are more relevant than risks that relate to smaller payouts.
4. “Buffet” products where individuals can select varying covers for different types of claim or
   amounts paid out due to different types of illness or impairment. Applicants may select
   higher covers for illnesses or impairments where they believe that they have a higher
   likelihood of claiming.
5. Products that incorporate cover for family members at selected percentages of the sums
   insured for the principal policyholder. Family members will also have to be underwritten, the
   extent of underwriting depending on the relative size of the selected sums insured.

This is a very brief list. Your company’s product experts should be able to provide much more
information on products launched by your company over the past few years.

In any event a generic product framework follows. Thereafter we include space for your notes
on the generic product information or presentations that you receive. You should complete
these notes so that you will be able to contribute to the exercise that follows.



Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                          Page 69



Generic product information – Framework

The following list is a framework of insurance products. It is not exhaustive:

Products and features                                              Implications for
                                                                   underwriting
      Permanent insurances:                                        Pure endowment carries
          o Types                                                     no risk, therefore no need
                 Whole of life policies                              for underwriting.
                 Endowment policies                                Other endowments do
                 Pure endowment policies                             carry risk, therefore must
          o Investment basis                                          be underwritten.
                 Reversionary bonus                                Term of risk is longer, the
                 Unit linked                                         longer the term of the
                 Universal life                                      endowment; whole of life
          o Benefits paid on:                                         means that risk is as long
                 Death                                               term as is possible.
                 Disability                                        Build-up of reserve off-sets
                         Lump sum versus income                      risk; some policies have a
                         Various disability definitions              high investment
                 Critical illness                                    component which means
                         Various definitions                         that risk runs off fast.
                                                                    Universal life type
                                                                      contracts often provide for
                                                                      premium terms to be
                                                                      reviewed.

      Immediate annuities                                            Risk to insurer is that
          o Types                                                      annuitant will live too long
                  Payable for life (with/without guaranteed           (early death is profitable
                    minimum term)                                      for the insurer).
                  Payable for a term certain                         There is an element of
                  Temporary annuities (payable for a                  “self-selection”, i.e.
                    maximum term or ending on earlier                  unhealthy people tend not
                    death)                                             to buy immediate
                  Variations on the above for two or more             annuities.
                    lives                                             “Reverse underwriting” is
          o Escalation of benefit                                      required when selling sub-
                  Escalating at a specified percentage                standard life annuities (the
                    each year                                          applicant has to prove s/he
                  With profit (escalating at a declared               is as unhealthy as s/he
                    “bonus” percentage)                                says s/he is).
                  Living annuity (insured chooses benefit
                    level from year to year within
                    parameters)




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                        Page 70



Products and features                                            Implications for
                                                                 underwriting
      Retirement annuities                                       Retirement annuities are
          o Investment basis                                        mainly investment
                  Reversionary bonus                               products that carry no risk,
                  Unit linked                                      therefore no need for
                  Universal life                                   underwriting.
          o Benefits paid on:                                     However death and
                  Retirement (either a specified income or,        disability benefits may be
                    more likely, a lump sum with which to           added to the investment
                    buy a pension)                                  product and the policy
                  Death, Disability and Critical illness as        then must be underwritten.
                    rider benefits                                Term of risk may be long,
                                                                    depending on the term to
                                                                    retirement.

      Temporary insurances                                         Term insurances have little
          o Types                                                    (in some cases no)
                 Level term policies                                reserve build-up, therefore
                 Yearly renewable terms policies                    risk carries over the full
                 Decreasing term insurances                         term of the contract.
          o Benefits paid on:                                       Total sum insured may run
                 Death                                              off reasonably quickly in
                 Disability                                         the case of a decreasing
                         Lump sum versus income                     term insurance.
                         Various disability definitions
                 Critical illness
                         Various definitions

      Credit life insurances                                       The risk reduces over the
          o Types                                                    term of the contract (which
                     Single premium policies                        can be quite short).
                     Fixed term policies – level cover             The reserve for single
                     Yearly renewable term policies                 premium policies runs off
                     Decreasing term insurances                     from the date the premium
          o Benefit levels                                           is paid to zero at the end
                     Full settlement                                of the contract.
                     Settlement of difference between              Some contracts provide for
                        outstanding loan and depreciated value       re-advances (i.e. taking
                     On-going payment of repayments                 out an additional loan); the
                     On-going payment of interest only              underwriter must consider
          o Benefits paid on:                                        the possible extension of
                     Death                                          cover.
                     Disability
                            Lump sum versus income
                            Various disability definitions
                     Critical illness
                            Various definitions
                     Retrenchment (short-term contract)




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                        Page 71



Products and features                                            Implications for
                                                                 underwriting
      Employee benefits (group) insurances                       Underwritten lives tend to
         o Types                                                    be the highest paid
                 Yearly renewable terms policies                   members of a scheme.
         o Benefits paid on:                                      Covers can be substantial.
                 Death                                           Cover is linked to salary,
                 Disability                                        which increases from year
                         Lump sum versus income                    to year. It is usual to grant
                         Various disability definitions            future increases in cover.
                 Critical illness                                Term of risk is duration to
                         Various definitions                       retirement (except note the
                                                                    possibility of continuation
                                                                    options.

      Funeral insurances                                           Product is often aimed at
          o Types                                                    lower income groups.
                   Member cover only                               Covers are low.
                   Member plus spouse                              Tends to have little or no
                   Member plus dependant children                   underwriting.
                   Member plus spouse plus dependant
                     children
                   Benefits for parents of member or
                     member’s spouse
                   Benefits for extended family members
                   Repatriation benefits
                   Tombstone benefits
                   Memorial benefits
                   Waiver of premium benefits
                   Paid-up benefits
          o Benefits paid on:
                   Death
                   Disability (for waiver of premium and
                     paid-up benefits only)
                          Various disability definitions

      Long-term care insurances                                    Specialised product –
          o Types                                                    requires an experienced
                  Single premium policies                           underwriter.
                  Yearly renewable terms policies                  Risk is long term.
                  Riders to other policies
          o Benefits paid on:
                  Inability to attend to Activities of Daily
                     Living (ADL)
                          Various definitions


As you can see this is a long list, and there can be many variations on the theme. Many of the
policies appear in “accident only” form, whereas others deal with death or disability from all
causes. Different policies come with different levels of guarantee and different types of
exclusion. Some policies are issued widely whereas others often have a very narrow focus.


Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 72




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                             Page 73



Generic products – Specification

For completeness we have provided brief specifications of generic products that could be used
for discussion should details of your company’s products not be available:

Number                    1
Name of product           Non-profit level term insurance.
Terms available           From 10 years to 35 years.
Rate guarantee            Rates guaranteed for full term of policy.
Contingencies available   Death.
(product payable on…)     Disability (lump sum acceleration of death benefit).
                          Critical illness (lump sum acceleration of death benefit).
HIV testing regimen       Initial test required if above the limit.
                          Repeat testing required every 5 years, failing which cover reduces to
                          10% of its former level.
Other features            Sold across the spectrum.

Number                    2
Name of product           Universal life type policy.
Terms available           Whole of life.
Rate guarantee            Rates guaranteed for 5 years, thereafter reviewed every 5 years.
Contingencies available   Death.
(product payable on…)     Disability (lump sum acceleration of death benefit or income benefit).
                          Critical illness (lump sum acceleration of death benefit).
HIV testing regimen       Initial test required if above the limit.
Other features            Targets A and B income groups; sold through independent brokers.

Number                    3
Name of product           Group income disability scheme.
Terms available           From 1 year to 50 years.
Rate guarantee            Rates guaranteed for one year.
Contingencies available   Disability (income benefit).
(product payable on…)
HIV testing regimen       HIV test required whenever a medical is required.
Other features            Rates are calculated for a scheme; only the top lives are
                          underwritten.
                          Underwriting only obtained in respect of the cover in excess of the
                          free cover limit.

Number                    4
Name of product           Education policy.
Terms available           From 10 years to 20 years.
Rate guarantee            Rates guaranteed for full term of policy.
Contingencies available   Death (of parent) – policy is made paid-up.
(product payable on…)     Disability (waiver of premiums).
HIV testing regimen       Initial test required if above the limit if the child is over the age of 15.
Other features            Sold across the spectrum – target B and C income groups.




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                        Page 74



Number                    5
Name of product           Car financing policy.
Terms available           36 months to 72 months.
Rate guarantee            Rates guaranteed for full term of policy.
Contingencies available   Death.
(product payable on…)     Disability (lump sum acceleration of death benefit).
                          Critical illness (lump sum acceleration of death benefit).
HIV testing regimen       No test required (all underwriting based on short non-medical
                          questionnaire).
                          Exception: Policies on luxury cars costing R400.000 or more.
Other features            Sold as part of agreement with new car dealerships.

Number                    6
Name of product           Funeral policy sold on open access basis.
Terms available           From 10 years to whole of life.
Rate guarantee            Rates reviewable every 5 years.
Contingencies available   Death.
(product payable on…)
HIV testing regimen       Only basic underwriting; no HIV test required.
Other features            Targets B & C income groups.

Number                    7
Name of product           Immediate annuities for sub-standard lives.
Terms available           Annuities guaranteed for 0, 5 and 10 years (and thereafter for life).
Rate guarantee            Policy sold by single premium.
Contingencies available   Survival.
(product payable on…)
HIV testing regimen       No test required unless applicant claims to be HIV positive.
Other features            Applicants claim higher benefits on the basis of their poor state of
                          health.




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                       Page 75




Product features
For each product presented you should make notes of key features, especially those related to
death, disability or illness. You should try to ascertain whether the product concerned is
primarily an investment product or a risk product.


Name of product

Notes

{FACILITATOR You should make your own notes on a selection of your company’s products
prior to the learning taking place. This recommendation carries over to the next exercise on
company products as well.}




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 76




Name of product

Notes




Name of product

Notes




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 77




Name of product

Notes




Name of product

Notes




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 78




Name of product

Notes




Name of product

Notes




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                          Page 79




Company products – exercise

Group exercise: Identify the risks to the company associated with selling various
products
Instructions to learners:
1. Meet in groups of 3 to 5.
2. Your group meeting should last no more than 60 minutes.
3. Appoint a scribe/presenter (the facilitator may do this for you) – you can split the function
    amongst you (each covers different products).
4. You are assigned a number of products to consider (target number is about 6). We have
    included 9 templates for separate products.
5. You should identify the key risks attaching to each of these products and the kind of roles
    that an underwriter might play in managing these risks.
6. Return to the main group – your scribe/presenter will give the feedback from your group
    after which the topic will be open for discussion in the larger group.
7. The following questions and space for notes may help your discussions.


Product #1:


What is the target market for
this product?

How long is cover guaranteed,
i.e. over what period are we
underwriting the life insured?

What events give rise to a
claim?


Are there any special risks that
might affect this type of
product?

Suggest a way in which the
insurer could be defrauded
through this product.




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 80




Product #2:


What is the target market for
this product?

How long is cover guaranteed,
i.e. over what period are we
underwriting the life insured?

What events give rise to a
claim?


Are there any special risks that
might affect this type of
product?

Suggest a way in which the
insurer could be defrauded
through this product.



Product #3:


What is the target market for
this product?

How long is cover guaranteed,
i.e. over what period are we
underwriting the life insured?

What events give rise to a
claim?


Are there any special risks that
might affect this type of
product?

Suggest a way in which the
insurer could be defrauded
through this product.




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 81




Product #4:


What is the target market for
this product?

How long is cover guaranteed,
i.e. over what period are we
underwriting the life insured?

What events give rise to a
claim?


Are there any special risks that
might affect this type of
product?

Suggest a way in which the
insurer could be defrauded
through this product.



Product #5:


What is the target market for
this product?

How long is cover guaranteed,
i.e. over what period are we
underwriting the life insured?

What events give rise to a
claim?


Are there any special risks that
might affect this type of
product?

Suggest a way in which the
insurer could be defrauded
through this product.




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 82




Product #6:


What is the target market for
this product?

How long is cover guaranteed,
i.e. over what period are we
underwriting the life insured?

What events give rise to a
claim?


Are there any special risks that
might affect this type of
product?

Suggest a way in which the
insurer could be defrauded
through this product.



Product #7:


What is the target market for
this product?

How long is cover guaranteed,
i.e. over what period are we
underwriting the life insured?

What events give rise to a
claim?


Are there any special risks that
might affect this type of
product?

Suggest a way in which the
insurer could be defrauded
through this product.




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 83




Product #8:


What is the target market for
this product?

How long is cover guaranteed,
i.e. over what period are we
underwriting the life insured?

What events give rise to a
claim?


Are there any special risks that
might affect this type of
product?

Suggest a way in which the
insurer could be defrauded
through this product.



Product #9:


What is the target market for
this product?

How long is cover guaranteed,
i.e. over what period are we
underwriting the life insured?

What events give rise to a
claim?


Are there any special risks that
might affect this type of
product?

Suggest a way in which the
insurer could be defrauded
through this product.




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                           Page 84




Underwriting procedures
Good corporate governance requires that all companies follow established procedures for all
activities that are critical to the business. This enables the company to minimise costly errors,
as the key processes are tried and tested.

In order to gain the most from this exercise you should have a copy of your company’s
procedure manual. If you do not have such a manual then it will be necessary to obtain
information, where appropriate.

In the discussions that follow you will need to establish:
1. how cases are received
2. how they are recorded on receipt
3. the opening of an underwriting file (PAPER OR ELECTRONIC)
4. what information is recorded on the file (on the file folder or the electronic header record)
5. what information is recorded electronically (and where)
6. the processes involved in checking the LOA register
7. the steps followed in assessing the case
8. process for referral to senior underwriters
9. process for referral to CMO
10. process for referral to reinsurers
11. how decisions are recorded
12. how decisions are communicated
13. how confidentiality is maintained


Class discussion exercise: Underwriting processes

The time set aside for this exercise is three hours, less time spent on recapping (about 15”) and
this introduction to the topic. This leaves about 10 to 11 minutes per topic.

The exercise is a facilitated discussion on processes. Whilst the discussion is in progress you
should make notes in the relevant places shown. The aim is to establish:
   1. What process is followed (what do we do)
   2. Reasons for any features of the process (why do we do it)
   3. An understanding of what goes wrong when the procedure is not followed
   4. An idea of who is responsible for making sure that the process is followed

Each of the processes is given space for notes in answer to these questions, in the pages that
follow. Note that the class should aim to finish four or five process topics this afternoon with the
balance being completed tomorrow morning.




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 85



Procedure                           Cases received
What do we do?

{FACILITATOR: You should have
a copy of the company’s
underwriting procedure manual, if
it exists. Alternative, make your
own notes, discussing them with
a senior underwriter if
necessary.}
Why do we do it?




What happens if we don’t do it?




Indicate who is responsible for
the various activities.




Procedure                           Recording of cases on receipt
What do we do?




Why do we do it?




What happens if we don’t do it?




Indicate who is responsible for
the various activities.




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 86



Procedure                          Opening an underwriting file
What do we do?




Why do we do it?




What happens if we don’t do it?




Indicate who is responsible for
the various activities.




Procedure                          Recording information on the file
What do we do?




Why do we do it?




What happens if we don’t do it?




Indicate who is responsible for
the various activities.




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                 Page 87



Procedure                          What information is recorded electronically
                                   (and where)
What do we do?




Why do we do it?




What happens if we don’t do it?




Indicate who is responsible for
the various activities.




Procedure                          Processes involved in checking the LOA
                                   register
What do we do?




Why do we do it?




What happens if we don’t do it?




Indicate who is responsible for
the various activities.




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                 Page 88



Procedure                          Steps followed in assessing the case
What do we do?




Why do we do it?




What happens if we don’t do it?




Indicate who is responsible for
the various activities.




Procedure                          Process for referral to senior underwriters
What do we do?




Why do we do it?




What happens if we don’t do it?




Indicate who is responsible for
the various activities.




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 89



Procedure                          Process for referral to CMO
What do we do?




Why do we do it?




What happens if we don’t do it?




Indicate who is responsible for
the various activities.




Procedure                          Process for referral to reinsurers
What do we do?




Why do we do it?




What happens if we don’t do it?




Indicate who is responsible for
the various activities.




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 90



Procedure                          Recording of decisions
What do we do?




Why do we do it?




What happens if we don’t do it?




Indicate who is responsible for
the various activities.




Procedure                          Communication of decisions
What do we do?




Why do we do it?




What happens if we don’t do it?




Indicate who is responsible for
the various activities.




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                          Page 91



Procedure                             How confidentiality is maintained
What do we do?




Why do we do it?




What happens if we don’t do it?




Indicate who is responsible for
the various activities.




If a key procedure is added to the list then discuss it here:

Procedure

What do we do?




Why do we do it?




What happens if we don’t do it?




Indicate who is responsible for
the various activities.




Day 2: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                         Page 92



         Underwrite a standard risk in long-term insurance
Day 3 – Facilitator Notes
Read these notes in conjunction with the learner material for Day 3.


Preparation for day 3
   Complete your normal preparation checklist concerning venue, facilities, meal arrangements
    and material arrangements.
   Mark any formative assessments submitted by learners.
   Arrange copies of those formative assessments for learners who may wish to repeat the
    exercise(s).
   Ensure that the facilitator is in possession of the company’s underwriting procedures or that
    an experienced underwriter will be on hand to explain those procedures.
   Ensure that copies of different underwriting manuals are available for use. Note that if the
    underwriting manuals are electronic then there should be computers available that have
    access to those manuals within the learning environment.
   Ensure that copies of Brackenridge, the Merck manual and other reference material are
    available within the learning environment.
   Ensure that the facilitator knows generally what limits of authority apply or that a senior
    underwriter is available who knows what limits apply.


Agenda for today

 08h30 to     Day 3 welcome         Summary of days 1 and 2
  08h45                             Set scene for day 3
 08h45 to     Our underwriting      Continuation of yesterday’s process (1st four or five
  10h30       procedures –           due on day 2 and balance on day 3)
              continued
 11h00 to     Source material       Source material for underwriting available to
  12h30       for underwriting       underwriters at the company Part 1 (90 minutes) –
                                     facilitator should spend 15 minutes on each of the
                                     following, giving learners time to discuss, ask
                                     questions and make notes:
                                    Underwriting manual – reinsurer 1 (or own manual)
                                    Underwriting manual – reinsurer 2
                                    Medical reference material – Brackenridge, Merck
                                     manual, Medical dictionary, MIMS
                                    Medical magazines
                                    Medical web-sites
                                    Other material




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                        Page 93



 13h30 to     Source material       Source material for underwriting available to
  15h00       for underwriting       underwriters at the company Part 2 (90 minutes) –
              – continued            facilitator should spend 30 minutes using each of
                                     the following in a practical way, i.e. helping
                                     learners to look up information and discussing what
                                     that information means:
                                    Underwriting manual – reinsurer 1 (or own manual)
                                    Underwriting manual – reinsurer 2
                                    Medical reference material – Brackenridge, Merck
                                     manual, Medical dictionary, MIMS
 15h30 to     Limits of             Introduction (45 minutes) – facilitator introduces
  16h30       authority              topic, followed by group discussion and feedback
                                     on reasons for limits, general indications of what
                                     limits apply and summary of the consequences on
                                     non-compliance
                                    Formative assessment (15 minutes) – each learner
                                     summarises their own limits of authority


The welcome
The welcome covers:
   1. A quick review of the 5 days of material to be covered
   2. A brief recap of the material covered yesterday
   3. A look at the agenda for today (as given in the learner material)
   4. A hand back, with general comment, of any of exercises handed in for assessment


Underwriting procedures
The first step is to complete the exercise on underwriting procedures that commenced at the
end of day 2. By the end of the day the class should have completed four or five topics. The
balance of the scheduled programme up until tea should be devoted to finishing the remaining
topics.


Source material
As preparation for this section you will need to ensure that you and the learners have access to
various items of material. The plan calls for the following to be available:

   1. Underwriting manuals – most companies use underwriting manuals supplied by
      reinsurers. If the company has its own manual then that should be used. Otherwise a
      manual supplied by a reinsurer would be used. If possible a second underwriting
      manual supplied by another reinsurer would be useful as an additional point of
      reference. When this material was designed the following manuals were made
      available:
      o General Cologne Re – Clue 3.0, a comprehensive PC-based manual (contains
          medical and non-medical sections)
      o Hannover Re – Alias, a similarly comprehensive PC-based manual
      o Munich Re – Life Underwriting manual, a paper-based encyclopaedic manual on
          medical underwriting, along with a separate booklet on financial underwriting.



Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                           Page 94



   2. Medical reference material – various sources of information on medical conditions and,
      in some cases, their impact on underwriting. Examples include:
      o Brackenridge – this is a manual on the medical selection of life risks edited by
          Douglas Brackenridge and, more recently, by John Elder. Availability is limited but a
          copy should be available at most of the large insurance companies and the
          reinsurers.
      o The Merck Manual – a substantial tome (2833 pages at the 1999 edition) that covers
          a comprehensive list of medical disorders.
      o Medical dictionaries (various available – a search for “medical dictionaries” on
          www.kalahari.net revealed 85 items; a similar search on Amazon.com returned over
          1.500 results including PC-software versions from Merriam-Webster and Mosby).
      o Mims – an Index of ethical medicines for prescription use by registered medical
          doctors in South Africa. Medicines placed in pharmacological order.

   3. Medical magazines – Again there are several available, of which SAMJ (the South
      African Medical Journal) might be the most relevant.

   4. Medical web-sites – Dr. René Geyer, CMO at Hannover Re, kindly offered the following
      website links as a reference:
      o http://seer.cancer.gov/
      o http://www.insurancejournal.com
      o http://www.ptca.org/
      o http://www.mydr.com.au/default.asp?article=3178
      o http://www.niddk.nih.gov/health/digest/pubs/cirrhosi/cirrhosi.htm
      o http://www.betterhealthchannel.com.au/bhcv2/bhcarticles.nsf/statistics?Openview&count=50
            0
        o   http://www.mentalhealthchannel.net/ptsd/treatment.shtml

   5. Other material – add anything else that you have that is available or relevant

The training plan calls for 90 minutes to be set aside so that the learners and the facilitator can
discuss these sources of information. This means showing the learners:

   1.   What the material looks like.
   2.   Where it can be found.
   3.   What the material contains.
   4.   How it is structured (chapter headings).
   5.   Why it is useful to underwriters.

If necessary, you should check this information with a senior underwriter.

The learners should have an opportunity to look at the material and ask questions about its
layout and purpose. Allow time for discussion and for the learners to make notes for their own
reference.

The time allocation in the programme shows “15 minutes per item”. In practice you may spend
more time on the underwriting manuals and the large medical reference manuals (Brackenridge
and Merck) than on the other items.

Note: The time allocated to this exercise may be more than sufficient. On the other hand it is
likely that the following exercise may be “pushed for time”. If the earlier exercise finishes before
time it makes sense to make a start on the next exercise.


Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                                 Page 95



Practical application

After getting a feel for the structure of the reference material it is useful to “try it out” in practice
in order to give the learners a feel for how the material can be used. The opportunity to do
some “hands-on” work might be limited by the number of manuals available to the learners.
This could be overcome by splitting the class into groups and giving each small group use of at
least one item of reference material.

For this exercise the following should be available:
   1. At least 2 underwriting manuals
   2. At least 2 of Brackenridge, Merck and a medical dictionary

The learners should be given a number of items to look up, including medical disorders, a bad
habit, some readings (e.g. blood pressure) and an occupational hazard. The learners must
then:
   1. Find a reference in the relevant manual (if it is there)
   2. Read the reference and decide what it means for underwriting
   3. Suggest what was useful in this particular reference
   4. Suggest what was not useful in this particular reference

The learners should therefore be able to build an understanding of which material is most useful
for various underwriting needs. Note that the underwriting manuals will tend to give specific
loadings whereas the medical dictionaries tend to explain the disorder, its treatment and
prognosis.

Note: This exercise may be quite time consuming. Learners should be encouraged not to
spend too much time on any one exercise or to get carried away trying to fill in all the blocks.
The aim is to get an overview at this stage. It is not to become an expert underwriter in the
fields tackled by the exercise (yet!).

Also note that it is possible to give a little more time to this exercise by finishing the earlier
exercise sooner.


Limits of authority
The third day ends with a discussion about limits of authority. Each learner should bring along a
note or table showing clearly what his/her limits of authority are or will be. These limits may
cover one or more of the following:
   1. The types of product that the learner may underwrite.
   2. The distribution channels that the learner may service (e.g. internal agents only, or
        broker business as well).
   3. The monetary limits (e.g. authority to underwrite sums insured up to Rx).
   4. The rating limits (e.g. only standard cases, or cases up to +100% mortality).
   5. Possibly age limits (e.g. may not underwrite children under age 18 or adults over age
        55).

As this programme is aimed at trainee underwriters it is likely that they will have to refer all
cases to their supervisor until such time as they have gained some experience. If this is the
case it will be useful to obtain a specimen authority from their supervisor indicating what the first
level of authority would be. If no such specimen is available then ASSUME:
    1. Underwriter may accept cases for whole of life and endowment policies that do not
        contain disability or critical illness.

Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                       Page 96



   2.   Only agency business (i.e. not broker business).
   3.   Maximum sum insured R250.000.
   4.   Only standard cases.
   5.   Only ages 18 to 55.

The group discussions would focus on the reasons for imposing limits of authority (could
discuss each in turn). There should also be a discussion of the consequences of non-
compliance.

The discussion of non-compliance should focus on what could go wrong for the insurer. Again,
each limit could be discussed in turn.

The consequences for underwriter who exceeds limits of authority would depend on the
companies disciplinary procedures and should be apparent (although worthwhile mentioning in
passing).




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                           Page 97



         Underwrite a standard risk in long-term insurance
Day 3 – Learner Material


Objectives for today

By the end of today you should:
1. Know the steps involved in the underwriting process at your company.
2. Be able to identify and use the various items of source material that will assist you with
    underwriting.
3. Understand your limits of authority and the implications of non-compliance.


Introduction – day 3

As a reminder, the following is the five-day programme:

                      Day     Topic covered
                              Introduction
                     Day 1
                              Purpose of underwriting
                              Purpose of underwriting – continued
                     Day 2    Our company and its products
                              Our underwriting procedures
                              Our underwriting procedures – continued
                     Day 3    Source material for underwriting
                              Limits of authority
                              Medical pathology
                     Day 4
                              Occupational and avocational risks
                              LOA protocols
                              Financial underwriting and insurable interest
                     Day 5
                              Medical schemes underwriting
                              Recap and summary


Agenda for Day 3
In more detail, the third day will run as follows:

 08h30 to     Day 3 welcome           Summary of days 1 and 2
  08h45                               Set scene for day 3
 08h45 to     Our underwriting        Continuation of yesterday’s process (1st four or five
  10h30       procedures –             due on day 2 and balance on day 3)
              continued
 11h00 to     Source material         Discussion of available material
  12h30       for underwriting
 13h30 to     Source material         Practical use of source material
  15h00       for underwriting
              – continued


Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                         Page 98



 15h30 to    Limits of             Discuss reasons for limits, general indications of
  16h30      authority              what limits apply and summary of the
                                    consequences on non-compliance
                                   Formative assessment on limits of authority




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                              Page 99




Underwriting procedures
The intention now is to complete the exercises that were started yesterday.

Note that the exercises are contained with the Day 2 material.




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                         Page 100




Source material
Underwriting is an art that marries assessment of a wide range of medical and non-medical
risks to a financial package and determines what terms may be offered. Accordingly
underwriters need a wide range of knowledge that needs to be kept up to date. As it is virtually
impossible to have all the required knowledge committed to memory it is necessary to make use
of various items of reference material.

In terms of keeping up to date, the underwriters need to have access to updates of their
reference material as well as current and topical journals that deal with changes that affect
underwriting practice. Examples of such changes might include:
    1. A new treatment for a disease.
    2. The emergence of a new disease.
    3. An improvement in safety equipment used in a dangerous sport.
    4. A new mechanism for dealing with fraud.

The materials that can be used include:

   1. Underwriting manuals – Most companies use underwriting manuals supplied by
      reinsurers, although some insurers have their own manuals. When this material was
      designed the following manuals were made available:
      o General Cologne Re – Clue 3.0, a comprehensive PC-based manual (contains
          medical and non-medical sections)
      o Hannover Re – Alias, a similarly comprehensive PC-based manual
      o Munich Re – Life Underwriting manual, a paper-based encyclopaedic manual on
          medical underwriting, along with a separate booklet on financial underwriting.

   2. Medical reference material – These provide various sources of information on medical
      conditions and, in some cases, their impact on underwriting. Examples include:
      o Brackenridge – this is a manual on the medical selection of life risks edited by
         Douglas Brackenridge and, more recently, by John Elder. Availability is limited but a
         copy should be available at most of the large insurance companies and the
         reinsurers.
      o The Merck Manual – a substantial tome (2833 pages at the 1999 edition) that covers
         a comprehensive list of medical disorders.
      o Medical dictionaries (various available – a search for “medical dictionaries” on
         www.kalahari.net revealed 85 items; a similar search on Amazon.com returned over
         1.500 results including PC-software versions from Merriam-Webster and Mosby).
      o Mims – an Index of ethical medicines for prescription use by registered medical
         doctors in South Africa. Medicines placed in pharmacological order.

   3. Medical magazines – Again there are several available, of which SAMJ (the South
      African Medical Journal) might be the most relevant.

   4. Medical web-sites – Dr. René Geyer, CMO at Hannover Re, kindly offered the following
      website links as a reference:
      o http://seer.cancer.gov/
      o http://www.insurancejournal.com
      o http://www.ptca.org/
      o http://www.mydr.com.au/default.asp?article=3178
      o http://www.niddk.nih.gov/health/digest/pubs/cirrhosi/cirrhosi.htm



Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                           Page 101



        o   http://www.betterhealthchannel.com.au/bhcv2/bhcarticles.nsf/statistics?Openview&count=50
            0
        o   http://www.mentalhealthchannel.net/ptsd/treatment.shtml

   5. Other material – Anything else that is available or relevant – for example, magazines
      and web-pages of the controlling that deals with a sport that might attract insurance
      loadings (such as diving, for example).

The first stage of the discussion of the various sources of information is to become familiar with
what is available. The first part of this exercise is to examine some of these items and
determine:

   1.   What the material looks like.
   2.   Where it can be found.
   3.   What the material contains.
   4.   How it is structured (chapter headings).
   5.   Why it is useful to underwriters.

The pages that follow contain space for any notes that you may wish to make concerning the
material.




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 102




Category                  Underwriting manual 1

Name of reference:

What does is look like?

{FACILITATOR: Prepare
your notes on all these
items beforehand.}
Where can this
reference item be
found?




What does it contain?




How is it structured
(chapter headings).




Why is it useful to
underwriters?




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 103




Category                  Underwriting manual 2

Name of reference:

What does is look like?




Where can this
reference item be
found?




What does it contain?




How is it structured
(chapter headings).




Why is it useful to
underwriters?




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 104




Category                  Medical reference manual 1

Name of reference:

What does is look like?




Where can this
reference item be
found?




What does it contain?




How is it structured
(chapter headings).




Why is it useful to
underwriters?




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 105




Category                  Medical reference manual 2

Name of reference:

What does is look like?




Where can this
reference item be
found?




What does it contain?




How is it structured
(chapter headings).




Why is it useful to
underwriters?




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 106




Category                  Medical reference manual 3

Name of reference:

What does is look like?




Where can this
reference item be
found?




What does it contain?




How is it structured
(chapter headings).




Why is it useful to
underwriters?




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 107




Category                  Medical magazine

Name of reference:

What does is look like?




Where can this
reference item be
found?




What does it contain?




How is it structured
(chapter headings).




Why is it useful to
underwriters?




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 108




Category                  Medical website 1

Name of reference:

What does is look like?




Where can this
reference item be
found?




What does it contain?




How is it structured
(chapter headings).




Why is it useful to
underwriters?




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 109




Category                  Medical website 2

Name of reference:

What does is look like?




Where can this
reference item be
found?




What does it contain?




How is it structured
(chapter headings).




Why is it useful to
underwriters?




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 110




Category                  Other source material

Name of reference:

What does is look like?




Where can this
reference item be
found?




What does it contain?




How is it structured
(chapter headings).




Why is it useful to
underwriters?




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                                Page 111




Practical application

After getting a feel for the structure of the reference material it is useful to “try it out” in practice
in order to get a feel for how the material can be used. The exercises that follow will give you
some experience of looking up information in the manuals and finding out how they work.

As a starting point, the facilitator will divide you up as required (this will depend on the number
of different manuals and other items available for the exercise). The exercise requires you to
look up information about a topic in each of the manuals. You then need to be able to point out:
 Where you found the information.
 What information you found that was relevant to an underwriting decision.
 What information was useful (and why it was useful).
 Any reasons that the information might not be useful (or as useful as an alternative source).

The structure of the exercise is that you should have:
   1. At least 2 underwriting manuals
   2. At least 2 of Brackenridge, Merck and a medical dictionary

Write down in the space that follows what items of reference you have available for this exercise
so that you do not have to record them in each case that follows:

Category                           Item
Underwriting manual 1


Underwriting manual 2


Medical reference manual 1


Medical reference manual 2


Medical reference manual 3


Medical magazine


Web-site 1


Web-site 2


Other




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                               Page 112




Item to look up    A male applicant aged 52 presents with average blood pressure of
                   a) 145/105; b) 160/110; c) 170/100.
Manual              Where did you       What did you     Why was it      Why was it not
                        find the            find?          useful?          useful?
                     information?
Underwriting
manual 1



Underwriting
manual 2



Medical
reference
manual 1


Medical
reference
manual 2


Medical
reference
manual 3


Medical
magazine



Web-site 1



Web-site 2



Other




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                               Page 113




Item to look up    A female aged 40 applies for insurance. Her height is 165cm. Her
                   weight is a) 40kgs; b) 60kgs; c) 80kgs.
Manual              Where did you      What did you        Why was it     Why was it not
                       find the             find?           useful?          useful?
                    information?
Underwriting
manual 1



Underwriting
manual 2



Medical
reference
manual 1


Medical
reference
manual 2


Medical
reference
manual 3


Medical
magazine



Web-site 1



Web-site 2



Other




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                               Page 114




Item to look up    A 30-year old applicant presents with Grade 2 hypertrophic
                   cardiomyopathy.
Manual              Where did you      What did you       Why was it      Why was it not
                       find the            find?            useful?           useful?
                    information?
Underwriting
manual 1



Underwriting
manual 2



Medical
reference
manual 1


Medical
reference
manual 2


Medical
reference
manual 3


Medical
magazine



Web-site 1



Web-site 2



Other




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                 Page 115




Item to look up    Applicant is 35 years old and has suffered from Type 1 Insulin
                   Dependent Diabetes Mellitus for a) 5 years; b) 10 years; c) 15 years.
Manual              Where did you      What did you        Why was it       Why was it not
                       find the            find?            useful?             useful?
                    information?
Underwriting
manual 1



Underwriting
manual 2



Medical
reference
manual 1


Medical
reference
manual 2


Medical
reference
manual 3


Medical
magazine



Web-site 1



Web-site 2



Other




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                               Page 116




Item to look up    Applicant has been diagnosed as suffering from a paranoid disorder
                   which is not associated with any other disorder. Applicant is
                   employed and considered stable.
Manual              Where did you     What did you        Why was it      Why was it not
                       find the           find?             useful?           useful?
                    information?
Underwriting
manual 1



Underwriting
manual 2



Medical
reference
manual 1


Medical
reference
manual 2


Medical
reference
manual 3


Medical
magazine



Web-site 1



Web-site 2



Other




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                  Page 117




Item to look up    Applicant discloses having suffered from a malignant melanoma 3
                   years ago. Further details not given at this stage – take a look at some
                   of the variations.
Manual              Where did you     What did you         Why was it       Why was it not
                        find the          find?              useful?             useful?
                     information?
Underwriting
manual 1



Underwriting
manual 2



Medical
reference
manual 1


Medical
reference
manual 2


Medical
reference
manual 3


Medical
magazine



Web-site 1



Web-site 2



Other




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                               Page 118




Item to look up    An applicant presents with pneumocystic carinii and Karposi’s
                   sarcoma.
Manual              Where did you     What did you     Why was it        Why was it not
                       find the           find?           useful?           useful?
                    information?
Underwriting
manual 1



Underwriting
manual 2



Medical
reference
manual 1


Medical
reference
manual 2


Medical
reference
manual 3


Medical
magazine



Web-site 1



Web-site 2



Other




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                               Page 119




Item to look up    An applicant discloses that a) he smokes 30 cigarettes per day; b) 2
                   years ago he was smoking marijuana; c) 5 years ago he was using
                   crack cocaine.
Manual              Where did you     What did you       Why was it       Why was it not
                        find the           find?           useful?            useful?
                     information?
Underwriting
manual 1



Underwriting
manual 2



Medical
reference
manual 1


Medical
reference
manual 2


Medical
reference
manual 3


Medical
magazine



Web-site 1



Web-site 2



Other




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                Page 120




Item to look up    An applicant engages in recreational diving. He discloses that a) he
                   dives to 35m; b) he dives to 80m; c) he enjoys cave diving; d) he
                   enjoys free diving.
Manual              Where did you      What did you        Why was it      Why was it not
                        find the           find?            useful?            useful?
                     information?
Underwriting
manual 1



Underwriting
manual 2



Medical
reference
manual 1


Medical
reference
manual 2


Medical
reference
manual 3


Medical
magazine



Web-site 1



Web-site 2



Other




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                          Page 121




Limits of authority
The third day ends with a discussion about limits of authority. You should have with you a note
or table showing clearly what your limits of authority are or will be. These limits may cover one
or more of the following:
    1. The types of product that the learner may underwrite.
    2. The distribution channels that the learner may service (e.g. internal agents only, or
        broker business as well).
    3. The monetary limits (e.g. authority to underwrite sums insured up to Rx).
    4. The rating limits (e.g. only standard cases, or cases up to +100% mortality).
    5. Possibly age limits (e.g. may not underwrite children under age 18 or adults over age
        55).

As this programme is aimed at trainee underwriters it is likely that you will have to refer all cases
to your supervisor until such time as you have gained some experience. Nevertheless, you may
have a specimen authority from your supervisor indicating what your first level of authority will
be. If no such specimen is available then ASSUME for the purposes of discussion:

   1. You may accept cases for whole of life and endowment policies that do not contain
      disability or critical illness.
   2. Only agency business (i.e. not broker business).
   3. Maximum sum insured R250.000.
   4. Only standard cases.
   5. Only ages 18 to 55.

Group exercise: Reasons for limits of authority

Instructions:
    1. Consider the limits imposed on your authority to accept an application for insurance.
    2. Suggest reasons why these limits might exist.
    3. Suggest what might go wrong for the insurer if an underwriter ignores his/her limits.
    4. Note the potential implications for the underwriter who ignores set limits.
    5. Discuss these in groups and make notes before returning to share your discussions with
       the full class.
                                                              Time limit: Discussion – 20 minutes
                                                                           Feedback – 20 minutes
Type of limit                     Why would this limit exist?            What might be the
                                                                   implications for the insurer
                                                                     if an underwriter exceeds
                                                                              the limit?
Limited range of products

{FACILITATOR: Limits are set
so that inexperienced people
learn on less significant
policies. Also certain
contracts require a specialist
to consider them.}




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                   Page 122



Limited type of distribution




Limit on sum insured




Limit on rating of application




Age limits




What consequences might
there be for an underwriter
who ignores his/her set limits?

{FACILITATOR: This is the
disciplinary aspects as
opposed to other
consequences, which are felt
by the company.}

The final exercise is to complete a formative assessment on underwriting limits.




Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                       Page 123




Underwriting limits – formative assessment

Formative assessment – Maps to part of assessment criterion 5.3 of unit standard 14433
Underwrite a standard risk in Long-Term Insurance
Learner’s name:

Instructions to candidate:
    1. If you want this exercise assessed you must fill in your name above as well as sign off
       (and date) the items at the end of this assessment.
    2. Answer the following question.
    3. Take your answer to your supervisor and ask him/her to verify the accuracy of your
       answer.
    4. Return the answer to the facilitator for sign-off.


      Describe your authority limits.
      Your answer should list all
      circumstances where you are
      required to refer a decision to a
      more senior underwriter:
 1     Over what monetary limit?
       For what products?
       Over what impairment level?
       Other circumstances.




Date written

Candidate’s signature

Supervisor’s name:



Supervisor’s comments:



Supervisor’s signature:                                      Date:



Facilitator’s comments:



Facilitator’s signature:                                     Date:



Day 3: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                        Page 124



         Underwrite a standard risk in long-term insurance
Day 4 – Facilitator Notes
Read these notes in conjunction with the learner material for Day 4.


Preparation for day 4
   Complete your normal preparation checklist concerning venue, facilities, meal arrangements
    and material arrangements.
   Mark any formative assessments submitted by learners.
   Arrange copies of those formative assessments for learners who may wish to repeat the
    exercise(s).
   Ensure that a subject matter expert will be on hand to discuss the items to be covered under
    “medical pathology”.
   Ensure that the medical terms cards have been prepared and that there are sufficient sets of
    the cards available.
   Ensure that a subject matter expert will be on hand to discuss the items to be covered under
    “Occupational and avocational risks”.


Agenda for today

 08h30 to     Day 4 welcome         Summary of days 1 to 3
  08h45                             Set scene for day 4
 08h45 to     Medical               Introduction to medical terms (45 minutes) –
  10h30       pathology              facilitator introduces learners to prefix-root-suffix
                                     construction of terms and allows learners to
                                     complete sample exercises using this approach
                                    Formative assessment of “creating terms” (15
                                     minutes)
                                    The principal “systems” in the human body (45
                                     minutes) – facilitator introduces the systems to the
                                     learners
 11h00 to     Medical               Disease (90 minutes) – facilitated discussion of risk
  12h30       pathology –            factors, their links to disease, and how diseases
              continued              affect the various systems in the human body,
                                     including prognosis




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                        Page 125



 13h30 to     Medical                Summary of pathology discussions (15 minutes) –
  15h00       pathology –             facilitator
              continued              Formative assessment of pathology discussions
              Occupational            (15 minutes)
              and avocational        Definition of occupations and avocations and types
              risks                   of associated risks (30 minutes) – facilitator
                                      introduction
                                     Key occupational risks (60 minutes, split across the
                                      break) – facilitated discussions of 10 minutes each
                                      on the following (list not exhaustive!):
                                               o Mining risks
                                               o Explosives
                                               o Aviation risks
                                               o Transport/driving
                                               o Military and policing risks
                                               o Diving risks
 15h30 to     Occupational           Key occupational risks – continuation of the above
  16h30       and avocational         process (1st three due before tea and last three due
              risks – continued       after tea)
                                     Avocational risks (15 minutes) – facilitated
                                      discussion of such risks
                                     Formative assessment on topics related to
                                      occupational and avocational risks (15 minutes)

After the brief introduction the day is split between medical discussions and occupational
discussions. The medical focus is much larger and has been allocated two thirds of the time.
Given the technical nature of the medical discussions it may be advisable to have an expert
(e.g. a senior underwriter) available to assist learners in the discussion.

During the day the learners should have access to:
1. A copy of the note on medical prefix, root and suffix terms.
2. Access to underwriting manuals
       o medical underwriting
       o occupational underwriting

It may assist learners to create cards containing prefix, root and suffix terms. The words could
be placed on different colours of cards, e.g. prefixes on red cards, roots on yellow cards and
suffixes on blue cards. A file is attached for this purpose – Medical Terms cards.doc

Instructions for making a set of cards:

1. Obtain 19 A4 cardboard red cards, 8 A4 cardboard yellow cards and 5 A4 cardboard blue
   cards (note: cardboard thickness must not exceed the maximum supported by your printer).
2. Print pages 1 – 19 of the document on the 19 red cards.
3. Print pages 20 – 27 of the document on the 8 yellow cards.
4. Print pages 28 – 32 of the document on the 5 blue cards.
5. Cut along the lines in order to prepare your set of cards. We recommend that you use a
   strong guillotine.
6. Repeat steps 1 to 5 for each additional set of cards.




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                         Page 126



The welcome
The welcome covers:
 A quick review of the 5 days of material to be covered
 A brief recap of the material covered yesterday
 A look at the agenda for today (as given in the learner material)
 A hand back, with general comment, of any of exercises handed in for assessment


Medical pathology
The discussion of medical pathology covers the following:
 Medical terms
 Systems in the human body
 Disease and risk factors

Introduction to medical terms

The initial section serves to introduce learners to the prefix-root-suffix construction of terms.
Two ways of getting learners familiar with complex medical terms are included. The first is a list
of sample terms that could be explained by reference to the definitions provided. The second is
an exercise using created cards that carry all the terms.

After 45 minutes of discussion there are 15 minutes set aside for a formative assessment.

Principal “systems” in the human body

Note: It would be particularly useful to have an experienced underwriter present during this
session.

The “principle systems” in the human body are introduced at this stage. It is recommended that
an underwriting manual is available during this discussion as many manuals are divided up
according to these particular systems. They may contain various sections/chapters that deal
with diseases of the various systems.

Risk factors, disease and prognosis

The training then progresses to a facilitated discussion of risk factors. These factors are linked
to disease. The learners should see how diseases affect the various systems in the human
body and what the prognosis might be. Again, it would be useful to have an underwriting
manual available to assist with specific exercises.

There are nine exercises scheduled during the class. We have left it to the facilitator’s
judgement as to how these nine should be split – should they do all 9 alone and then feed back
on all of them or should each exercise be done on its own? One suggested approach is that:
    1. The do 1 exercise and feedback discussion to get the idea of what is required
    2. They then do 2 exercises followed by a 10 minute feedback discussion.
    3. They then do 3 exercises followed by a 15 minute feedback discussion.
    4. Finally they do the last 3 exercises followed by a 15 minute feedback discussion.

Summary




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                         Page 127



We have allocated 15 minutes to sum up the pathology discussions, and a further 15 minutes
so that the learners can complete a formative assessment. Remember that this is not the end
of the discussion on pathology – further discussions are scheduled for regular weekly meetings
that follow this course.


Occupational and avocational risks
The occupation and avocational risks are covered in two hours. We start with an overview of
what occupations and avocations are and identify why occupation might be a source of risk.
Thereafter we look at some key high risk occupations. Next there is a brief session on
avocational risks. Finally there is time for a quick formative assessment on occupations and
avocations.

During these discussions it will be most useful to have available an underwriting manual that
deals with occupations and pastimes.

There are six exercises relating to occupations scheduled during the class. We have left it to
the facilitator’s judgement as to how these six should be split – should they do all 6 alone and
then feed back on all of them or so each exercise be done on its own? One suggested
approach is that:
    1. They do 1 exercise and feedback discussion to get the idea of what is required
    2. They then do 2 exercises followed by a 10 minute feedback discussion.
    3. Finally they do the last 3 exercises followed by a 15 minute feedback discussion.

As with pathology this is not the end of the discussion on occupations and avocations – further
discussions are scheduled for regular weekly meetings that follow this course.




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                   Page 128



         Underwrite a standard risk in long-term insurance
Day 4 – Learner Material


Objectives for today

By the end of today you should:
1. Understand some basic medical terms and how they are made up.
2. Know about the various systems in the body.
3. Know broadly how occupations and pastimes affect assessment of the risk.


Introduction – day 4
As a reminder, the following is the five-day programme:

                      Day    Topic covered
                             Introduction
                     Day 1
                             Purpose of underwriting
                             Purpose of underwriting – continued
                     Day 2   Our company and its products
                             Our underwriting procedures
                             Our underwriting procedures – continued
                     Day 3   Source material for underwriting
                             Limits of authority
                             Medical pathology
                     Day 4
                             Occupational and avocational risks
                             LOA protocols
                             Financial underwriting and insurable interest
                     Day 5
                             Medical schemes underwriting
                             Recap and summary


Agenda for Day 4
In more detail, the fourth day will run as follows:

 08h30 to     Day 4 welcome           Summary of days 1 to 3
  08h45                               Set scene for day 4
 08h45 to     Medical                 Introduction to medical terms
  10h30       pathology               Formative assessment of “creating terms”
                                      The principal “systems” in the human body
 11h00 to     Medical                 Disease, risk factors and prognosis
  12h30       pathology –
              continued




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                          Page 129



 13h30 to    Medical                Summary of pathology discussions
  15h00      pathology –            Formative assessment
             continued              Occupations and avocations
             Occupational           Key occupational risks
             and avocational
             risks
 15h30 to    Occupational           Key occupational risks (continued)
  16h30      and avocational        Avocational risks
             risks – continued      Formative assessment




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                          Page 130




Medical pathology
The discussion of medical pathology covers the following:
1. Medical terms
2. Systems in the human body
3. Disease and risk factors

Introduction to medical terms

Medical terms are made up of logical building blocks. One can look at each of these blocks as
containing a prefix, root or suffix. The root contains the central concept, which is then qualified
by the prefix (something that goes before) and/or the suffix (something that comes after).

You should have a full list of prefixes, roots and suffixes, and their associated meanings. You
should be able to use it to interpret a large number of medical terms.

Formative exercise: If the facilitator is able to provide cards showing prefixes on red cards,
roots on yellow cards and suffixes on blue cards then proceed as follows:
    1. Draw a card of each colour.
    2. Form a medical term by reading the cards in order red-yellow-blue.
    3. Write down the resultant “medical term”.
    4. Look up the resultant words to establish what this medical term means.
    5. Repeat 5 times.

If you do not have access to cards then:
     1. Swap learner notes with a colleague.
     2. Create medical terms using a prefix, a core word and a suffix.
     3. Swap back (so that you have your notes back with the five terms created by your
         colleague).
     4. Look up the resultant words to determine what the medical terms mean.
Created term                                     Meaning
1.


2.


3.


4.


5.




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 131




Medical pathology – formative assessment 1

Formative assessment – Maps to part of assessment criterion 2.1 of unit standard 14433
Underwrite a standard risk in Long-Term Insurance
Learner’s name:

Instructions to candidate:
    1. If you want this exercise assessed you must fill in your name above as well as sign off
        (and date) the items at the end of this assessment.
    2. Answer the following questions.
    3. Hand your answer to the facilitator for marking and sign-off.
No. Question                                Answer                                Assessment
                                            a.


                                         b.
     Explain briefly the medical
     prefixes listed below:
                                         c.
     a. Circum-

     b. Glossa-
                                         d.
     c. Irid-
                                         e.
     d. Erythro-

 1   e. Necr-
                                         f.
     f.   Opthalm-
                                         g.
     g. Salping-

     h. Trache-
                                         h.
     i.   Vesic-
                                         i.
     j.   Bio-

                                         j.




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 132



                                         a.


                                         b.
     Explain briefly the medical roots
     listed below:
                                         c.
     a. Cephal

     b. Angio
                                         d.
     c. Fibro
                                         e.
     d. Encephal

 2   e. Haem
                                         f.
     f.   Hepat
                                         g.
     g. Os

     h. Melan
                                         h.
     i.   Spondyl
                                         i.
     j.   Tympano

                                         j.




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 133



                                             a.


                                             b.
      Explain briefly the medical suffixes
      listed below:
                                             c.
      a. -aemia

      b. -gram
                                             d.
      c. -itis
                                             e.
      d. -pathy

 3    e. -plasia
                                             f.
      f.   -rrhagia
                                             g.
      g. -scopy

      h. -trophy
                                             h.
      i.   -megaly
                                             i.
      j.   -lysis

                                             j.



Date written

Candidate’s signature



Facilitator’s comments:



Facilitator’s signature:                                   Date:




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 134



Principal “systems” in the human body

There are a number of identified “systems” in the human body. In a healthy body all these
systems are in a healthy state. The systems in the human body include:

   Blood and the lymphatic system
   Cardio-vascular system
   Endocrine system
   Gastrointestinal tract
   Locomotor system
   Nervous system
   Respiratory system
   Urogenital system

Most underwriting manuals would carry some explanation of what each system entails. In order
to initiate your understanding of these systems we suggest that you complete the exercises that
follow by reference to one of these manuals.

1. Name of system                      Blood and lymphatic system
What are the components of this
system?

{FACILITATOR: Again, make your
notes beforehand.}
Fill in on the diagram where the
system is located.




List 2 or 3 diseases that can affect
this system.




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 135



2. Name of system                      Cardio-vascular system
What are the components of this
system?



Fill in on the diagram where the
system is located.




List 2 or 3 diseases that can affect
this system.




3. Name of system                      Endocrine system
What are the components of this
system?



Fill in on the diagram where the
system is located.




List 2 or 3 diseases that can affect
this system.




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 136



4. Name of system                      Gastrointestinal system
What are the components of this
system?



Fill in on the diagram where the
system is located.




List 2 or 3 diseases that can affect
this system.




5. Name of system                      Locomotor system
What are the components of this
system?



Fill in on the diagram where the
system is located.




List 2 or 3 diseases that can affect
this system.




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 137



6. Name of system                      Nervous system
What are the components of this
system?



Fill in on the diagram where the
system is located.




List 2 or 3 diseases that can affect
this system.




7. Name of system                      Respiratory system
What are the components of this
system?



Fill in on the diagram where the
system is located.




List 2 or 3 diseases that can affect
this system.




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 138



8. Name of system                      Urogenital system
What are the components of this
system?



Fill in on the diagram where the
system is located.




List 2 or 3 diseases that can affect
this system.




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                             Page 139



Risk factors, disease and prognosis

Apart from the 8 systems listed above there are a number of other chapters/sections in an
underwriting manual. These sections will deal with major categories of disease, organs not
included in these systems, build or habits. Such chapters/sections might include:

   Physical build (height/weight)
   Blood pressure and other readings
   Family history and genetic matters
   Eye, ear, nose and throat
   Skin
   Transplants
   Infectious and parasitic diseases
   Diabetes
   Tumours
   Habits (e.g. smoking, drinking, drug dependence)

The applicant for insurance discloses a number of points of information concerning his/her
medical history, current state of health and physical attributes. These points can be cross-
referenced within the listed chapters so that the underwriter develops an idea of all the risk
factors that relate to the applicant.

What are “risk factors”? The term refers to all factors that affect the risk of death (or disability)
pertaining to the applicant. For example, raised blood pressure is a risk factor – those with
blood pressure that is higher than normal are at risk for a number of related illnesses. This
might be aggravated (made worse) by other factors, such as smoking. They may also be
mitigated (made better) by positive factors, such as successful medication.

Diseases that the applicant has already experienced also contribute to the assessment of risk.
Having had a disease may suggest that the applicant is prone to this disease and may suffer
from it again (e.g. if one has had cancer before the chances of getting cancer again are thought
to be higher). Other diseases result in the building of immunity, e.g. once you have had
measles your immune system normally protects you against getting the disease again.

The historical information provided in an application, whether to do with past illnesses, genetic
background or other risk factors is not relevant in itself to the case that is to be underwritten.
The policy, after all, will provide cover in the future. The historical information is only relevant to
the extent that it provides a prognosis of the future state of health of the applicant.

What do we mean by “prognosis”? The prognosis is a forecast of the future state of health of
the applicant. When it comes to treating an illness the doctor may offer a prognosis that deals
with the likelihood of “getting better” (or the likely extent of the recovery). When reading any
medical information it is important that the underwriter has an understanding of what this implies
for the future and the likely time until a future deterioration in health may take place. Remember
that if the deterioration is likely to take place after the policy ends then no loading should be
necessary.

We now continue our discussions by considering broadly some risk factors and diseases and
how they might impact on an application for insurance. We recommend that you have at least
one underwriting manual available for this exercise.



Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                         Page 140



Exercise: Facilitated discussion of risk factors.
During this exercise you should:
1. Identify each risk factor given and find a reference to it in your underwriting manual.
2. Outline what key systems or organs might be affected by the risk factor.
3. Consider how the severity of the risk factor is measured.
4. Consider the prognosis implications – when will the factor become an issue for
   underwriting?

There are 9 exercises. We recommend that you spend 5 minutes on each one, either on your
own or in pairs. Each case should then be discussed in the broader class for another 5
minutes. The facilitator will suggest how many cases you should do on your own before feeding
back.

Risk factor 1                                     Obesity (over-weight)
Identify this risk factor and indicate where it
can be found in your underwriting manual

{FACILITATOR: It may assist you to have an
experienced underwriter available for this
exercise. Alternatively, make your notes
beforehand.}
Outline what key systems or organs might be
affected by the risk factor



Consider how the severity of the risk factor is
measured – what is “mild” and what is “severe”




Consider the prognosis implications – when
will the factor become a serious issue for the
health of the applicant?




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 141



Risk factor 2                                     High blood pressure
Identify this risk factor and indicate where it
can be found in your underwriting manual




Outline what key systems or organs might be
affected by the risk factor



Consider how the severity of the risk factor is
measured – what is “mild” and what is “severe”




Consider the prognosis implications – when
will the factor become a serious issue for the
health of the applicant?




Risk factor 3                                     Family history of early death due to
                                                  coronary
Identify this risk factor and indicate where it
can be found in your underwriting manual




Outline what key systems or organs might be
affected by the risk factor



Consider how the severity of the risk factor is
measured – what is “mild” and what is “severe”




Consider the prognosis implications – when
will the factor become a serious issue for the
health of the applicant?




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                      Page 142



Risk factor 4                                     Previous cancers/tumours
Identify this risk factor and indicate where it
can be found in your underwriting manual




Outline what key systems or organs might be
affected by the risk factor



Consider how the severity of the risk factor is
measured – what is “mild” and what is “severe”




Consider the prognosis implications – when
will the factor become a serious issue for the
health of the applicant?




Risk factor 5                                     Ear disorders, e.g. cholesteatoma
Identify this risk factor and indicate where it
can be found in your underwriting manual




Outline what key systems or organs might be
affected by the risk factor



Consider how the severity of the risk factor is
measured – what is “mild” and what is “severe”




Consider the prognosis implications – when
will the factor become a serious issue for the
health of the applicant?




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 143



Risk factor 6                                     Current or previous signs of tuberculosis
Identify this risk factor and indicate where it
can be found in your underwriting manual




Outline what key systems or organs might be
affected by the risk factor



Consider how the severity of the risk factor is
measured – what is “mild” and what is “severe”




Consider the prognosis implications – when
will the factor become a serious issue for the
health of the applicant?




Risk factor 7                                     Current diabetes mellitus
Identify this risk factor and indicate where it
can be found in your underwriting manual




Outline what key systems or organs might be
affected by the risk factor



Consider how the severity of the risk factor is
measured – what is “mild” and what is “severe”




Consider the prognosis implications – when
will the factor become a serious issue for the
health of the applicant?




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                              Page 144



Risk factor 8                                     Previous liver transplant
Identify this risk factor and indicate where it
can be found in your underwriting manual




Outline what key systems or organs might be
affected by the risk factor



Consider how the severity of the risk factor is
measured – what is “mild” and what is “severe”




Consider the prognosis implications – when
will the factor become a serious issue for the
health of the applicant?




Risk factor 9                                     Smoking
Identify this risk factor and indicate where it
can be found in your underwriting manual




Outline what key systems or organs might be
affected by the risk factor



Consider how the severity of the risk factor is
measured – what is “mild” and what is “severe”




Consider the prognosis implications – when
will the factor become a serious issue for the
health of the applicant?




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                      Page 145



Summary

By this time we have introduced you to the basic structure of medical terms, the eight systems
of the body and concepts of disease and risk. In the weeks that follow you will become much
more familiar with these concepts as you look at various systems, how they are affected by
disease and what this means for underwriting.

If time permits, it may be useful to carry out a brief review of the work done today on medical
pathology. Once you have finished your review then there is an opportunity to complete the
formative assessment that follows. You can complete this as an “open book” exercise if you so
wish, although we recommend that you try the exercise “closed book” at first to see how well
you do.

Remember that this is not the end of the discussion on pathology – further discussions are
scheduled for regular weekly meetings that follow this course.




Day 4: Initial training period
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Level 4, 40 Credits
                                                                                     Page 146




Medical pathology – formative assessment 2

Formative assessment – Maps to part of assessment criterion 2.1 of unit standard 14433
Underwrite a standard risk in Long-Term Insurance
Learner’s name:

Instructions to candidate:
1. If you want this exercise assessed you must fill in your name above as well as sign off (and
    date) the items at the end of this assessment.
2. Answer the following questions.
3. Return the answer to the facilitator for marking and sign-off.
No. Question               Answer                                                 Assessment
                           a.


                           b.


                           c.


      List eight           d.
      systems in
      human
 1
      pathology, along     e.
      with one disease
      of each.
                           f.


                           g.


                           h.



Date written

Candidate’s signature



Facilitator’s comments:



Facilitator’s signature:                                    Date:




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                        Page 147




Occupational and avocational risks

What is an occupation? This is a much more difficult question to answer that it would first
appear. Several answers may be offered, including:
 “That which occupies his/her time” – not very helpful but it has been put forward as an
   answer.
 The normal job that a person does during his/her current (or most recent) employment
   contract.
 Any job that the person is qualified to do that takes into account his/her total experience,
   education, training and abilities.
 Any job, as above, including those for which a person could reasonably become qualified
   (after a modest amount of retraining).
 Any job, as above, with the proviso that the status of the job should be reasonable bearing
   in mind what the person has been doing in recent times.

These definitions themselves are open to debate and discussion (e.g. what is “reasonable”). It
is therefore not possible to be precise about any occupation. On the other hand we do know
that some “occupations” are riskier than others. Underwriters therefore need to consider
“occupation” when assessing cases.

Occupations are important for a number of reasons:
   1. Some occupations are more highly remunerated than others. These tend to lead to
      better lifestyles, nutrition and access to better healthcare, which in turn tends to lower
      the risk of death and disability.
   2. Some occupations are accompanied by high risk factors. Examples include working
      underground, dealing with explosives or working in a high-stress environment (e.g. on a
      trading floor).
   3. Some occupations have high health requirements and present a raised risk of being
      “medically unfit”, e.g. airlines pilots with relatively small health impairments may be
      prevented from flying. As they can no longer perform their “occupation” they may wish
      to submit a claim for disability.
   4. Some occupations are even more poorly defined than normal, e.g. a “director” of a
      company is some-one appointed to the Board of that company. Being a “director” does
      not in itself imply that the individual is a senior person not exposed to high risk.

What is an avocation? If an occupation is what occupies an individual’s working time an
avocation is something s/he does during his/her leisure time. Avocations include hobbies,
amateur sports and pastimes. Examples of avocations would include “safe pastimes” (e.g.
reading, playing chess or bridge, playing music) and “dangerous pastimes” (e.g. sky diving,
mountaineering). Many avocations are the amateur form of an occupation (e.g. private flying as
opposed to working as an airline pilot).

The exercises that follow relate to occupations. We will pick up on avocations later.




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                         Page 148



Exercise: Facilitated discussion of occupations.
During this exercise you should:
1. Identify each risk factor given and find a reference to it in your underwriting manual.
2. Identify specific risks attaching to this type of occupation.
3. Outline what key factors determine the extent of the risk.
4. Identify any long term implications of working within this occupation.

There are 6 exercises. We recommend that you spend 5 minutes on each one, either on your
own or in pairs. Each case should then be discussed in the broader class for another 5
minutes. The facilitator will suggest how many cases you should do on your own before feeding
back.

Occupation 1                                      Mining
Identify this occupation and indicate where it
can be found in your underwriting manual

{FACILITATOR: Again, make your notes
beforehand or have a senior underwriter
present for discussions.}
Are there any specific risks attaching to this
type of occupation?




Outline what key factors determine the extent
of the risk



Are there any long-term implications of
working within this occupation?




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                           Page 149



Occupation 2                                     Working with explosives
Identify this occupation and indicate where it
can be found in your underwriting manual




Are there any specific risks attaching to this
type of occupation?




Outline what key factors determine the extent
of the risk



Are there any long-term implications of
working within this occupation?




Occupation 3                                     Aviation
Identify this occupation and indicate where it
can be found in your underwriting manual




Are there any specific risks attaching to this
type of occupation?




Outline what key factors determine the extent
of the risk



Are there any long-term implications of
working within this occupation?




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 150



Occupation 4                                     Transport/driving
Identify this occupation and indicate where it
can be found in your underwriting manual




Are there any specific risks attaching to this
type of occupation?




Outline what key factors determine the extent
of the risk



Are there any long-term implications of
working within this occupation?




Occupation 5                                     Military & policing
Identify this occupation and indicate where it
can be found in your underwriting manual




Are there any specific risks attaching to this
type of occupation?




Outline what key factors determine the extent
of the risk



Are there any long-term implications of
working within this occupation?




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                         Page 151



Occupation 6                                      Diving
Identify this occupation and indicate where it
can be found in your underwriting manual




Are there any specific risks attaching to this
type of occupation?




Outline what key factors determine the extent
of the risk



Are there any long-term implications of
working within this occupation?




Turning back to avocations, it is worthwhile having a brief discussion of how these may affect
the risk. At this stage we will restrict the discussion to matters covered under “occupations”. In
class you should review any relevant material related to the corresponding occupation and
consider how it might affect the rating if it were a pastime. We suggest that you complete the
following table during a brief (15 minute) class discussion.

Avocation                                         Learner notes – how does the avocation
                                                  affect the rating
Private flying



Recreational diving



Motor racing (amateur)



Caving




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                      Page 152




Occupational and avocational risks – formative assessment

Formative assessment – Maps to assessment criteria 3.1 to 3.5, of unit standard 14433
Underwrite a standard risk in Long-Term Insurance
Learner’s name:

Instructions to candidate:
1. If you want this exercise assessed you must fill in your name above as well as sign off (and
    date) the items at the end of this assessment.
2. Answer the following questions.
3. Hand your answer to the facilitator for marking and sign-off.

Note: This might be quite challenging as a formative assessment at this stage. You may
wish to discuss the questions with the facilitator before re-submitting an assessment in
due course.
No. Question                            Answer                                Assessment
     Why do long term insurers use
 1   occupation as a factor in
     assessing risk?
     Give 3 examples of an avocation
 2   or pursuit that could be
     considered as hazardous.




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 153



                                               a.

      Write brief notes on how the
      following occupations may affect         b.
      the disability risk – what ratings or
      adjustments might you impose?
                                               c.
      a. Bank clerk

      b. Director                              d.

      c. Shop assistant
                                               e.
      d. Engineer
 3
      e. Diver                                 f.

      f.   Pilot
                                               g.
      g. Truck driver

      h. Accountant                            h.

      i.   Miner
                                               i.
      j.   Professional sport

                                               j.


      List four different types of risk that
 4
      affect mortality.
      List four different types of risk that
 5
      affect morbidity.
Date written

Candidate’s signature



Facilitator’s comments:



Facilitator’s signature:                                   Date:




Day 4: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                        Page 154



         Underwrite a standard risk in long-term insurance
Day 5 – Facilitator Notes
Read these notes in conjunction with the learner material for Day 5.


Preparation for day 5
   Complete your normal preparation checklist concerning venue, facilities, meal arrangements
    and material arrangements.
   Mark any formative assessments submitted by learners.
   Arrange copies of those formative assessments for learners who may wish to repeat the
    exercise(s).
   Ensure that copies of LOA protocols are available for discussion.
   Ensure that a subject matter expert will be on hand to discuss the items to be covered under
    “Financial underwriting and insurable interest”.


Agenda for today

 08h30 to     Day 5 welcome         Summary of days 1 to 4
  08h45                             Set scene for day 5
 08h45 to     LOA protocols         Introduction to the LOA and its purpose (15
  10h30                              minutes) – facilitator
                                    Summary and purpose of main LOA agreements
                                     affecting underwriting (15 minutes) – facilitator and
                                     discussion
                                    The LOA underwriting register (purpose and
                                     usage) (30 minutes) – facilitator and
                                     discussion/practical demonstration – where to find
                                     the codes
                                    The LOA protocol on limitation of disability benefits
                                     (overview and discussion of reasons) (15 minutes)
                                     – facilitator and discussion
                                    The LOA protocols on HIV testing (15 minutes) –
                                     facilitator and discussion
                                    Formative assessment of LOA protocols (15
                                     minutes)




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                         Page 155



 11h00 to    Financial              Introduction of financial underwriting (30 minutes) –
  12h30      underwriting and        facilitator covers range of financial underwriting
             insurable               including tests of insurable interest, simple tests of
             interest                affordability and comprehensive assessments of
             Medical                 assets and liabilities
             schemes                Discussion of financial underwriting (30 minutes) –
             underwriting            group discussion of purpose of different types of
                                     financial underwriting and feedback
                                    Formative assessment on financial underwriting
                                     and insurable interest (15 minutes)
                                    Introduction to medical schemes underwriting and
                                     how the philosophy differs from life insurance (15
                                     minutes) – facilitator and discussion
 13h30 to    Medical                Discussion of options available to medical
  15h00      schemes                 schemes (30 minutes) – facilitator and discussion
             underwriting –         Formative assessment of medical schemes
             continued               underwriting (15 minutes)
             Recap                  Recap days 1 and 2 (15 minutes) – facilitator and
                                     discussion
 15h30 to    Recap                  Recap days 3, 4 and 5 (30 minutes) – facilitator
  16h30                              and discussion
                                    Review formative assessments; repeat where
                                     desired; schedule further training, wrap-up (30
                                     minutes)

After the brief introduction the day covers LOA protocols, financial issues and medical schemes
underwriting. At the end of the day there is time allocated for recapping the week’s discussions
and repeating any exercises that learners still need to grasp.

During the day the learners should have access to:
1. Copies of relevant LOA protocols
2. Copies of LOA underwriting codes
3. Access to underwriting manuals covering financial underwriting


The welcome
The welcome covers:
1. A quick review of the 5 days of material to be covered
2. A brief recap of the material covered yesterday
3. A look at the agenda for today (as given in the learner material)
4. A hand back, with general comment, of any of exercises handed in for assessment


LOA protocols
The discussions of the various LOA protocols are tackled in the order given in the programme.
The three main (key) protocols are discussed in detail, with selected other codes being
discussed in passing.

Learners should each have their own copy of the three key protocols covered as part of this
material. These three are:
1. The code on the Life Register (Chapter 1) – KEY

Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                           Page 156



2. The code of good practice on disability (Chapter 3) – KEY
3. The HIV testing protocol (Chapter 6) – KEY

In addition the learners should have their own copy of the LOA medical codes.

The facilitator should have copies available of some of the other codes/protocols, including:
1. Chapter 2 – the code on suicide
2. Chapter 4 – the code on medical fees, etc.
3. Chapter 5 – the code on dread disease benefits
4. Chapter 7 – the code on replacement
5. Chapter 8 – the code on the S-reference system
6. Chapter 18 – the code on the claims register
7. Chapter 19 – the code on the intermediary register
8. Chapter 23 – the code on unclaimed benefits

Copies of this material were distributed with the pack. The facilitator should check for updates
as well as other codes and protocols on the LOA website. See http://www.loa.co.za


Note that at some companies the LOA medical codes are automatically looked up by a
computerised underwriting system. In these cases it is useful to show the underlying LOA
codes as background, although learners do need to understand that they may not need to use
the codes.


Financial underwriting and insurable interest
In discussing financial underwriting and insurable interest it is important to stimulate learners to
consider what can go wrong if they do not consider financial issues.


Medical schemes underwriting
The different philosophy of underwriting adopted by medical schemes (at the behest of the
Department of Health) needs to be understood by underwriters. Underwriters who understand
this philosophy and its strengths and weaknesses will have a better understanding of the
philosophies underlying underwriting for insurance business.


Recapping
Finally, there is time allocated for “recapping” at the end of day 5. This time can be used in
order to revise material covered to date, as per the plan drafted here. Alternative uses for this
time that you may consider are:

   1. Make up any lost learning time (i.e. catch up, if behind).
   2. Allow learners to re-do assessments where required (or complete outstanding
      assessments).
   3. Go through and confirm the plan for on-going learning.
   4. Go back to a part of the course that has given learners most difficulty and repeat the
      training.
   5. Give learners an early day if further attempts at learning are likely to be futile.




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                        Page 157



The facilitator should prepare the intended use of this time carefully. Final preparation should
be checked at the end of day 4. If you do any end of day exercises with the learners this may
assist you in deciding how to utilise this time.




Day 5: Initial training period
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Level 4, 40 Credits
                                                                                           Page 158



          Underwrite a standard risk in long-term insurance
Day 5 – Learner Material


Objectives for today

By the end of today you should:
1. Know about the LOA protocols that affect underwriting and the implications of non-
    compliance.
2. Understand broadly what is involved in financial underwriting.
3. Understand the underwriting limits placed on medical schemes.
4. Recap any areas covered to date in order to clarify your understanding.


Introduction – day 5
As a reminder, the following is the five-day programme:

                      Day     Topic covered
                              Introduction
                     Day 1
                              Purpose of underwriting
                              Purpose of underwriting – continued
                     Day 2    Our company and its products
                              Our underwriting procedures
                              Our underwriting procedures – continued
                     Day 3    Source material for underwriting
                              Limits of authority
                              Medical pathology
                     Day 4
                              Occupational and avocational risks
                              LOA protocols
                              Financial underwriting and insurable interest
                     Day 5
                              Medical schemes underwriting
                              Recap and summary


Agenda for Day 5
In more detail, the fifth day will run as follows:

 08h30 to      Day 5 welcome           Summary of days 1 to 4
  08h45                                Set scene for day 5
 08h45 to      LOA protocols           Introduction to the LOA and its purpose
  10h30                                Summary and purpose of main LOA
                                       The LOA underwriting register
                                       The LOA protocol on limitation of disability benefits
                                       The LOA protocols on HIV testing
                                       Formative assessment of LOA protocols




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 159



 11h00 to    Financial             Introduction of financial underwriting
  12h30      underwriting and      Discussion of financial underwriting
             insurable             Formative assessment on financial underwriting
             interest              Introduction to medical schemes underwriting
             Medical
             schemes
             underwriting
 13h30 to    Medical               Discussion of options available to medical
  15h00      schemes                schemes
             underwriting –        Formative assessment of medical schemes
             continued              underwriting
             Recap                 Recap days 1 and 2
 15h30 to    Recap                 Recap days 3, 4 and 5
  16h30                            Review formative assessments




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                          Page 160




LOA protocols

The Life Offices Association

The Life Offices Association (LOA) is an industry body that was established to represent the
interests of the life insurance industry. Most registered life offices are members of the LOA.

Details of the LOA can be found on its website on http://www.loa.co.za

Life insurance is an intangible product, i.e. the buyer cannot “feel” (or see, hear, taste or smell)
the product that s/he has bought. It is also a financial product, so that there is a lot of money
that flows around the world of insurance. This combination provides opportunities both for client
dissatisfaction and mistrust as well as fraud. Many of the codes and protocols developed by the
LOA are intended to assist its members to protect themselves against fraud as well as
improving the image of the industry (thereby addressing areas of customer dissatisfaction and
mistrust).




Day 5: Initial training period
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Level 4, 40 Credits
                                                                                         Page 161



LOA protocols and codes of practice

The following LOA protocols and codes of practice may be particularly relevant to underwriters:

1. The code on the Life Register (Chapter 1) – (*)
2. The code of good practice on disability (Chapter 3) – (*)
3. The HIV testing protocol (Chapter 6) – (*)
4. Chapter 2 – the code on suicide
5. Chapter 4 – the code on medical fees, etc.
6. Chapter 5 – the code on dread disease benefits
7. Chapter 7 – the code on replacement
8. Chapter 8 – the code on the S-reference system
9. Chapter 18 – the code on the claims register
10. Chapter 19 – the code on the intermediary register
11. Chapter 23 – the code on unclaimed benefits

We are going to study the starred items (first three in the list) in more detail. In the meantime
we are going to address the remaining items briefly. You should have access to copies of the
codes (they are on the LOA website if hardcopies are not available).

The following table shows these codes and gives a brief overview of their purpose. There is
also space for your notes should you wish to make any. In making notes you may wish to
answer the following questions:

   1. Why was the code introduced?
   2. Are there any benefits or disadvantages for the insurers, buyers of insurance or brokers?

Chapter Title or topic      Purpose or impact                  Notes
  no.
   2    The code on         This is an old code that
        suicide             recommends that death due to
                            suicide be excluded for 2 years
                            after inception.




   4       The code on      The code advises member
           medical fees,    offices how to deal with the
           etc.             question of fees for medical
                            examinations. The SA Medical
                            Association issues non-binding
                            scales of fees regularly. The
                            code also deals with standard
                            types of medical information
                            and forms, including provisions
                            for verifying the identity of
                            applicants and maintaining
                            confidentiality.




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 162



Chapter Title or topic    Purpose or impact                  Notes
  no.
   5    The code on       The objective of this Code is to
        dread disease     ensure that all dread disease
        benefits          benefit proposal forms request
                          information about both existing
                          policies and current proposals
                          for similar benefits and to
                          include dread disease benefit
                          claims within the scope of the
                          LOA Claims Register.
   7      The code on     This code aims to restrict
          replacement     cases where intermediaries
                          encourage policyholders to
                          lapse or surrender a policy in
                          order to take out a new one.



   8      The code on     S-references are given to
          the S-          intermediaries who are found
          reference       guilty of fraudulent or
          system          disgraceful conduct.
                          Intermediaries (brokers and
                          agents) who are S-referenced
                          are prevented from selling
                          insurance.
  18      The code on     The insurance risks which
          the claims      insurers are asked to cover,
          register        and the claims they are asked
                          to pay, must be properly
                          assessed. To do proper claims
                          assessment and to discourage
                          fraud, insurers must be able to
                          obtain all information relevant
                          to those risks and claims. The
                          Claims Register is a data base
                          through which insurers can
                          share information about
                          persons who are the lives
                          assured under policies and
                          who have made "notifiable
                          claims" that are relevant to the
                          assessment of future claims.




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Level 4, 40 Credits
                                                                                      Page 163



Chapter Title or topic     Purpose or impact                   Notes
  no.
  19    The code on        The Intermediary Register is a
        the                database that facilitates the
        intermediary       sharing of current and
        register           historical information of
                           appointments of all
                           intermediaries active in the life
                           insurance industry. This
                           affords authorised users the
                           opportunity to access relevant
                           reference data before
                           appointing an intermediary.
                           Regulation will in future require
                           that a Register be maintained
                           by all financial services
                           providers and in building this
                           Register this requirement has
                           been taken into account. It is
                           envisaged that each
                           authorised user’s entries
                           making up the central Register
                           will constitute compliance with
                           this requirement. This
                           Register will also provide the
                           validation of all intermediaries
                           wishing to access the Financial
                           Services Exchange system in
                           that only registered
                           intermediaries will be given
                           access to the Financial
                           Services Exchange.
  23      The code on      This code is aimed at ensuring
          unclaimed        that reasonable steps are
          benefits         taken by member offices to
                           inform the policyholders and
                           beneficiaries of any unclaimed
                           policy benefits.



The next three sections deal with the “starred” chapters of the LOA codes and protocols, i.e.
those that are deemed as (arguably) the three most relevant to underwriters. Note that you
should be in possession of copies of each of the codes plus a copy of the LOA medical codes
used in the medical register.




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                        Page 164




The code on the Life Register (Chapter 1)

The Life Register is a data base through which insurers can share information about persons
who propose for, or who are the lives assured under, policies and who have "notifiable
impairments" that are relevant to the risk or claim assessment. This register allows insurers to
share information that assists them in assessing applications for insurance and claims for
benefits.

There are ten main sections to the code. The following table provides a summary of the main
areas of the code:

No.    Section                   Key points or description
 1.    Introduction: Purpose      Why the code exists.
       and Status
 2.    Definitions                  Definition of words used in the code.
 3.    Scope                        The code applies to life policies in South Africa.
 4.    The Basic Rules              Life offices record applications that show “notifiable”
                                     impairments.
                                    The record is placed on the shared register.
                                    “Notifiable impairments” are those leading to an assessed
                                     extra mortality/morbidity of 75% or more.
 5.    Notification Procedures      Procedures follow the “Guide to the life register” issued by
                                     the LOA to member offices.
 6.    Access by member             Only available to authorised staff.
       offices                      Member offices may only access the register in connection
                                     with a signed application or a claim.
 7.    Access by the Public         Individuals can request copies of information about
                                     themselves that is held on the LOA register.
                                    There is a prescribed procedure to be followed (covered in
                                     Annexure B of the code).
                                    Information is provided to a designated medical doctor to
                                     be passed on to the individual.
 8.    The right to privacy:        Member offices must ask each proposer and the life
       waiver by authorisation       assured to sign the waiver.
                                    There is prescribed wording to be used for the waiver.
 9.    Security of information      Provides for security steps to ensure that the information is
                                     treated with due care and confidentiality.
                                    Records plus any printed copies only available to
                                     designated authorised persons.
 10    Suspension of right to       The LOA can inspect member offices and deny access to
       access                        the register if there is a breach of the code.

It may be useful to look at the summary given above and quickly compare it with your copy of
the code. As an exercise it may be useful to complete the following tasks:




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                         Page 165



Group task: In small groups discuss the following questions. Make some brief notes and then
discuss it further with the class. We have included space for your notes.
                                                            Time limit: Group discussion 10 minutes
                                                                        Class discussion: 10 minutes
Why is the code so “strict”?      {FACILITATOR: Note in particular the constitutional right to
                                  privacy and the sensitivity of medical information.}




Why do you think results are      {FACILITATOR: Note counselling function required, especially if
only given to a doctor and        results are poor.}
not to the individual directly?




A friend suggests that life       {FACILITATOR: Note that information is shared subject to
insurers treat individuals        strictest protocols about when it may be accessed and who may
unfairly by forcing them to       access the information.}
disclose private medical
information about
themselves and then sharing
it with others.

Can you justify the approach
taken by insurers to your
friend?

Before finishing with this discussion of the life register we should consider the coding of LOA
impairments. Reasons for using a coding system include:

   It promotes confidentiality (an unauthorised person is less informed if they learn that a
    person was found to have a J43.9 than if they learnt about his/her emphysema).
   It is quicker to record (fewer keystrokes required…).
   It is more precise – there is less scope for spelling errors or debates about how specific a
    description is required. Those completing the register have to find the specific relevant
    codes.

A set of codes is available to you. The original version was kindly supplied by Sanlam. The
version handed out has two sections, namely one sorted by code and the other sorted by the
description:
 To find out what a code means look through the list sorted by code and then look up the
    description
 To look up a code find the description in the second list




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 166



We recognise that in many companies the LOA medical codes are automatically “looked up” by
a computerised underwriting system. If there is no such computerised system then the
underwriter will need to be able to look up the underlying LOA medical codes manually.

In order to gain a most basic familiarity with the medical codes we recommend that you look up
the following:



The code for melanosis


                                                {FACILITATOR: It’s under “Transplant, heart”.}
The code for a heart transplant (you may need
to think a little bit laterally for this…)




The description that relates to code F02.2




The description that relates to code XX005




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                          Page 167




The code of good practice on disability (Chapter 3)

This is a code of good practice, i.e. it is not a code that is binding on member offices. Insurers
can introduce the code if they so wish (it is strongly recommended that they do so).

The code relates particularly to disability products, including those involving a payment of a
lump sum as well as those involving the payment of an income. Disability products replace
income lost, or deemed to be lost, when an individual becomes disabled. In the case of an
income benefit the replacement might be, say, 75% of the income before disability.

The aim of the code is to limit the total amount of disability insurance that a member has to a
reasonable percentage of his/her income. The normally accepted maximum is 75% of income.
However, the code does make a number of special provisions:

   1. An additional amount of up to 25% (giving a total of 100%) is acceptable during the first
      two years of disability.
   2. For large salaries the maximum percentage reduces.
   3. Lump sum benefits are converted for the purpose of calculation using the factors given
      in Appendix B.

The code recommends that if there is over-insurance then the benefits paid should be reduced.
By way of a simple example consider a person earning R10.000 per month. Assume that the
maximum benefit is 75% (i.e. R7.500 per month). He has a disability income policy for R6.000
per month and a lump sum disability policy with a sum insured of R360.000. He is under the
age of 50. If the person is disabled then:

   1. The full disability income benefit is R6.000 per month.
   2. The income equivalent of the lump sum policy is R360.000 ÷ 120 = R3.000 per month.
   3. Total equivalent benefit is R9.000, which is too high (should be R7.500 per month –
      5/6ths of the actual total).
   4. The solution is that benefits on both policies are reduced proportionately, e. g. pay a
      lump sum of R300.000 and in income benefit of R5.000 per month.

Again, let’s do a brief exercise:

Group task: In small groups discuss the following question. Make some brief notes and then
discuss it further with the class. We have included space for your notes.
                                                             Time limit: Group discussion 5 minutes
                                                                         Class discussion: 5 minutes
Why should disability             {FACILITATOR: It is not a good idea for people to find disability
benefits be limited?              too profitable. Individuals can and do exaggerate their
                                  symptoms in order to be paid a claim. In extreme cases they
                                  may even be encouraged to injure themselves – it happens!}




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                        Page 168




The HIV testing protocol (Chapter 6)

The purpose of the HIV Testing Protocol is to ensure that the life industry follows the highest
standards in all aspects of HIV screening of applicants for life insurance. This Code applies to
all HIV tests performed by LOA member offices. It addresses issues such as:
 1. Identification
 2. Confidentiality
 3. Informed consent
 4. Pre- and post-test counselling
 5. Transmission of test results
 6. Accreditation of test kits
 7. Accreditation of laboratories
 8. The use of exclusion clauses.

The protocol is made up of eight sections namely:
1. Preamble & background
2. Proposal, medical report, reinstatement and medical attendant's report forms
3. Pre-test procedures
4. Venesection
5. At the laboratory
6. Reporting of results
7. Post-test procedures at the life office
8. General

In addition there are a number of annexures:
 1. Flowchart
 2. HIV testing and information sheet
 3. Letter to nominated doctor: 1st test reactive, further tests non-reactive
 4. Letter to client: reactive result
 5. Letter to nominated doctor: post-test counselling
 6. Interpretation of HIV test results for insurance purposes
 7. PCR test result positive on AIDS vaccine recipient: Letter to nominated doctor for post-test
    counselling
 8. Consent to AIDS exclusion clause
 9. Accredited laboratories

The key points raised as part of the protocol are as follows:


No.    Section                    Key points or description
 1.    Preamble &                  Outlines aims
       background
 2.    Proposal, medical             Specifies standard questions to include in the proposal and
       report, reinstatement          other documents.
       and medical attendant's
       report forms
 3.    Pre-test procedures           The applicant for insurance who is asked to undergo an
                                      HIV test receives an information sheet.
                                     The applicant has the right to personal pre-test
                                      counselling.


Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                         Page 169



 4.    Venesection                   This section deals with the collection of blood samples for
                                      the purpose of the test.
 5.    At the laboratory             This section deals with the accreditation of laboratories
                                      and the tests that must be performed.
 6.    Reporting of results          This section deals with how results are to be reported so
                                      as to maintain confidentiality.
 7.    Post-test procedures at       This section deals with procedures once the results of the
       the life office                tests are known.
                                     In the case of a positive HIV test the section deals with the
                                      way the result is communicated to the applicant (via his/her
                                      private medical attendant).
 8.    General                       Contains sundry points.

The flowchart in Annexure 1 of the code (see documents handed out to you) probably gives the
clearest view of the process to be followed.

It may be useful to look at the summary given above and quickly compare it with your copy of
the code. As an exercise it may be useful to complete the following tasks:

Group task: In small groups discuss the following questions. Make some brief notes and then
discuss it further with the class. We have included space for your notes.
                                                         Time limit: Group discussion 5 minutes
                                                                     Class discussion: 5 minutes
Why engage in pre-test
counselling?




Why do you think results are
only given to a doctor and
not to the individual directly?




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                      Page 170




The Life Offices Association – formative assessment

Formative assessment – Maps to Assessment criterion 4.2 of unit standard 14433
Underwrite a standard risk in Long-Term Insurance
Learner’s name:


Instructions to learner:
 1. If you want this exercise assessed you must fill in your name above as well as sign off (and
     date) the items at the end of this assessment.
 2. Answer the questions below.
 3. This exercise is “open book”, i.e. you may refer to your notes.
Question                           Answer                                          Assessment
1. Why does the LOA life
    register exist? Suggest
    two reasons.




2. Give two provisions that
   are in place to protect an
   individual’s right to privacy.




3. A person aged 30 earns
   R5.000 per month. He has
   two existing disability
   policies – one has a lump
   sum insured of R240.000
   and the other provides an
   income of R500 per
   month. He has applied for
   a further disability income
   policy with a benefit of
   R2.000 per month. Should
   he be given the cover?




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 171



4. Give three steps in the
   procedure to be followed
   when sending an applicant
   for an HIV test.




Date written

Candidates signature
Number assessed as
correct:


Facilitator’s comments:



Facilitator’s signature:                                   Date:




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                         Page 172




Financial underwriting and insurable interest
By this stage you have had a significant introduction to medical and occupational underwriting,
along general concepts and procedures that surround the processes. There is a final step in
the process and that is financial underwriting.

Financial underwriting considers the reasonability of the amount of insurance requested in an
application versus the financial interests of the proposer. This can manifest itself in a number of
ways, of which the following are examples:

    1. The maximum disability benefit granted should be reasonable compared to the income
       of the life insured – otherwise there is a perverse incentive to claim disability.
    2. The policy should be affordable – if the policy owner cannot afford the premiums then
       either s/he has received poor advice from the broker/intermediary or s/he “knows
       something that the insurer does not”.
    3. The total sum insured payable on death should be reasonable compared to the assets,
       earning power and other financial interests of the life insured and/or the policy owner.
    4. The total sum insured should fall within the legislated maximum benefits, for example the
       maximum benefits payable on the death of a child.
    5. Should the policy owner be someone other than the life insured then there must be a
       demonstration of insurable interest – there have been cases on individuals being killed in
       order to obtain the proceeds of a life insurance policy.

Applications for insurance should contain questions that deal with the amount of insurance than
an individual already has. Other questions that deal with the individual’s occupation and
currently level of income would give a general indication of how much insurance would be
reasonable. Life offices often apply basic tests to check the reasonability of the insurance
applied for.

A table follows that provides an example of financial underwriting limits. There is space for you
to fill in your company’s practice in this regard or make additional notes. Note that the examples
are possible, but by no means reflect a standard practice.

Test                             Sample                            Your company’s version
Test of affordability             Premiums on all insurance
                                   policies not to exceed
{FACILITATOR: Check that           7½% of income of life
you have notes on the              insured.
company’s practice.}              Exceptions for company
                                   owned policies.




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 173



Test of maximum death              Maximum lump sum
benefit                             benefit of 8 times annual
                                    salary.
                                   Maximum income benefit
                                    of 100% of income.
                                   Once cover exceeds
                                    R5.000.000 further
                                    evidence is required.


Test of maximum disability         Maximum of 75% of
benefit                             income (or lump sum
                                    equivalent).
                                   Overall maximum benefit
                                    of R55.000 per month.
                                   Maximum lump sum
                                    benefit of R1.000.000



Test of maximum critical           Maximum of 2 times
illness benefit                     annual salary.
                                   Overall maximum of
                                    R1.000.000.




Test of insurable interest         If the life insured is not the
                                    policy owner there is a
                                    reasonable explanation as
                                    to why the cover is
                                    required.




Legal maxima                       Maximum sum insured of
                                    R30.000 on the life of a
                                    child.




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                          Page 174



Once the “normal” limits are exceeded it becomes important to consider further financial
underwriting information. This is a sophisticated field of underwriting and will not be dealt with in
too much depth here. The norm would be to obtain a more detailed financial underwriting
questionnaire, duly completed by the applicant. This questionnaire would contain general
questions, including questions on the reasons for the policy, and may be accompanied by
financial information such as:
 Audited copies of accounts of companies owned by the applicant.
 A personal statement of assets and liabilities (copies of valuation certificates may be
    required).
 A detailed statement of income (and expenditure).
 Copies of bank statements.

It is important to consider what can go wrong when an insurer does not carry out proper
financial underwriting. The insurer certainly is exposed to the risk of a claim that may be
fraudulent but there may also be a case for claiming negligence if, for example, too high a sum
insured was granted and the life insured was subsequently murdered in order to obtain the
insurance. This places a burden of responsibility on the underwriter that should not be carried
lightly.

There have been some high profile court cases in recent history where one or more individuals
were allegedly murdered in order to obtain insurance proceeds. It might be worthwhile
considering an example or two and answering the following questions:

   1. If you were a close friend or family member of the person killed, how would you feel
      about the underwriter who granted the cover?
   2. If you are an underwriter, what should you be doing in order to minimise the risk of such
      events?

If no-one in the class knows of a topical example the following are three generic examples that
you could use. Although fictitious there have been similar cases. Space for your notes follows:

Generic example 1: A family consists of a 45-year old husband, his 28-year old wife and their
two children. The wife has a tertiary education but has been at home looking after the children
for the past 6 years. The husband takes out a policy on her life for a sum insured of R2 million.
Four months later the wife is shot and killed in an apparent attempted robbery. Further
investigation suggests that the killers may have been paid by the husband.
Generic example 2: A company is starting a car cleaning service. The company has six
directors – the managing director, the financial director and four executive directors. It has a
small shack from which it intends to supply cleaning equipment. The company takes out a
policy on the lives of all six directors, with a sum insured of R1 million each. Two months later
the shack catches fire with the four executive directors inside. A can of cleaning solvent
explodes which aggravates the fire, and the four executive directors are killed. Further
investigation reveals that these four “executive directors” were intended to be the cleaners of
the vehicles.




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                          Page 175



Generic example 3: Two business partners take out policies on each other’s lives. The sum
insured is R5 million. The business is reasonably prosperous and successful – the sum insured
is thought to be reasonable. After four years the business experiences difficulties and ends up
dissolving with little proceeds to the two partners. The previous good working relationship is
now replaced by feelings of animosity.

The first partner proposes that they cancel the policies. The second partner refuses to do so
(and is not obliged to do so in terms of the contract). Three months later the first partner is
killed by an unknown assailant and the second partner submits a claim for R5 million.
Notes:

{FACILITATOR: The aim is to engender a feeling of responsibility amongst the prospective
underwriters. They should start to feel that their role is a professional one, with social and moral
responsibilities in addition to their business requirements.}




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                         Page 176



The different types of financial underwriting already discussed include the following:

   Simple financial information requested in the normal application form.
   A detailed financial questionnaire.
   Audited copies of accounts of companies owned by the applicant.
   A personal statement of assets and liabilities (copies of valuation certificates may be
    required).
   A detailed statement of income (and expenditure).
   Copies of bank statements.

In order to cement the ideas on financial underwriting you should break into groups and discuss
the usefulness of the different items. Specific points to consider are suggested in the exercise.

Group exercise: Financial underwriting instruments

Instructions:
    1. Consider the financial underwriting instruments listed below.
    2. Suggest reasons why these instruments are useful.
    3. Suggest any shortcomings that may exist.
    4. How would you overcome these shortcomings and what could you do to check the
        validity of the information given by the applicant?
    5. Discuss these in groups and make notes before returning to share your discussions with
        the full class.
                                                              Time limit: Discussion – 15 minutes
                                                                           Feedback – 15 minutes
Financial                        Why is this          What might be its      How might you deal
underwriting                 instrument useful?        shortcomings?               with the
instrument                                                                      shortcomings
                                                                              and/or check the
                                                                                validity of the
                                                                            information given by
                                                                               the applicant?
 Simple financial
    information
    requested in the
    normal application
    form.




   A detailed
    financial
    questionnaire.




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 177



   Audited copies of
    accounts of
    companies owned
    by the applicant.




   A personal
    statement of
    assets and
    liabilities (copies
    of valuation
    certificates may
    be required).


   A detailed
    statement of
    income (and
    expenditure).




   Copies of bank
    statements.




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                      Page 178




Financial underwriting – formative assessment

Formative assessment – Maps to Assessment criterion 3.8 of unit standard 14433
Underwrite a standard risk in Long-Term Insurance
Learner’s name:


Instructions to learner:
1. If you want this exercise assessed you must fill in your name above as well as sign off (and
    date) the items at the end of this assessment.
2. Answer the questions below.
3. This exercise is “open book”, i.e. you may refer to your notes.
4. You may need to check your company policy for the answers to questions 2 and 3.
5. To get final sign-off you should have questions 2 and 3 signed by your supervisor.
Instructions to supervisor:
1. Please check the answers to questions 2 and 3.
2. If you agree with the answers please sign off this document in the space provided.

Question                         Answer                                           Assessment
1. Give 2 reasons why
   financial underwriting is
   useful and appropriate.




2. When must an applicant
   for insurance fill in a
   financial questionnaire
   (over and above the
   questions in the standard
   application form)?




3. What additional
   information is requested
   on your company’s
   financial underwriting
   questionnaire? List three
   or four items only, not in
   detail.




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 179



4. Of the following people, list      Yourself:
   those in whom you might                  Yes
   have an insurable interest.              No
   In each case suggest why            Explanation:
   you have an insurable
   interest:
 Yourself.
 Your husband/wife.                  Your husband/wife.
 Your child.
                                             Yes
 Your business partner.
 Your mother.
                                             No
                                       Explanation:
 Your spiritual advisor.
 Your ex-husband/wife.

                                      Your child.
                                             Yes
                                             No
                                       Explanation:



                                      Your business partner.
                                             Yes
                                             No
                                       Explanation:



                                      Your mother.
                                            Yes
                                            No
                                       Explanation:



                                      Your spiritual advisor.
                                             Yes
                                             No
                                       Explanation:



                                      Your ex-husband/wife.
                                          o Yes
                                          o No
                                       Explanation:




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 180



5. A person applies for life
   insurance cover of
   R250.000 on the life on
   his/her 6-year old child.
   The child is in perfect
   health but cover is
   declined. Why?




Date written

Candidates signature



Supervisor’s comments:



Supervisor’s signature:                                    Date:
Number assessed as
correct:


Facilitator’s comments:



Facilitator’s signature:                                   Date:




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                        Page 181




Medical schemes underwriting
The philosophy of underwriting adopted by medical schemes (at the behest of the Department
of Health) differs from that adopted by life offices. Underwriters should understand the
differences in approach, along with the strengths and weaknesses of each approach.

The “insurance” approach

The insurance approach aims to rate each applicant according to his/her own circumstances.
The insurer takes into account factors such as age, gender, education, income and state of
health before estimating a rate to be charged for the insurance. In this way those with the
greatest risk of dying are charged more for their life insurance. Fairness is seen in terms of
each individual paying a premium commensurate with his/her own level of risk.

The “medical schemes” approach

The medical schemes approach seeks to promote access to the schemes. The number of
factors that can be taken into account when rating an individual is limited to a minimum.
Fairness is seen in terms of each individual paying the same premium for the same level of
benefit.

It is not practical for both systems to exist side by side. If this were the case then individuals
with the lowest risk would place their business with companies using the “insurance” approach
(where they would enjoy a lower premium). This would leave only higher risk individuals in the
“medical schemes”. Accordingly the “medical schemes” would need to increase their premiums
(contributions), which would encourage the next lowest level of risk to migrate to the “insurance”
companies. This process would continue until medical scheme premiums were so high that
only the highest risk individuals would find it preferable to stay with the scheme.

In order to ensure a viable medical schemes approach the Department of Health has forced all
schemes providing medical benefits to adhere to its list of requirements. This list incorporates
minimum levels of benefit and stringent limits on underwriting.




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                         Page 182



Group exercise

The underwriting options available to medical are listed in the table contained in the following
group exercise.

Group exercise: Medical schemes underwriting

Instructions:
1. Consider the underwriting instruments listed below.
2. Suggest reasons why these instruments are useful.
3. Suggest any shortcomings that may exist.
4. What factors exist to offset these shortcomings?
5. Discuss these in groups and make notes before returning to share your discussions with the
     full class.
                                                           Time limit: Discussion – 15 minutes
                                                                        Feedback – 15 minutes
Underwriting                     Why is this        What might be its      What factors exist
instrument available to instrument useful?           shortcomings?          to offset these
a medical scheme                                                            shortcomings?
Waiting period – a
medical scheme may
impose a waiting period
of up to three months
(nine months in respect
of pregnancy) on a new
member before the
member is entitled to
claim any benefits.
Pre-existing sickness
conditions – a medical
scheme may details of
any medical condition
present at the time of
application. The
scheme may then
impose a condition-
specific waiting period
for not more than twelve
months.
Premium penalties for
persons joining late in
life – a medical scheme
may apply premium
penalties to a late joiner,
based on the number of
years after age 30 that
the applicant was not a
member of a medical
scheme.




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 183




Medical schemes underwriting – formative assessment

Formative assessment – Maps to Assessment criterion 3.9 of unit standard 14433
Underwrite a standard risk in Long-Term Insurance
Learner’s name:


Instructions to learner:
1. If you want this exercise assessed you must fill in your name above as well as sign off (and
    date) the items at the end of this assessment.
2. Answer the question below.
3. This exercise is “open book”, i.e. you may refer to your notes.
Question                           Answer                                         Assessment
1. What underwriting
    restrictions may be
    imposed by a Healthcare
    Benefits Administrator on a
    life that is found to be sub-
    standard? You should
    answer this in the light of
    the Medical Schemes Act
    and its associated
    regulations.


Date written

Candidates signature
Number assessed as
correct:


Facilitator’s comments:



Facilitator’s signature:                                    Date:




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                       Page 184




Recapping
Review of training days
The remaining time on this day is allocated to reviewing the topics covered to date. The 5
training days can be revisited in order to review any areas that are causing difficulties.

If a difficulty presents itself that warrants spending a long time on further discussion then you
should schedule a separate meeting in order to tackle the issue. At this stage you should spend
a maximum of 5 to 10 minutes on each of the days.

Repeat of assessment instruments

Learners who have not completed the formative assessments or had them signed off may wish
to do so now. It is also an opportunity for those who have not yet demonstrated competence to
do so.

You should obtain copies of any outstanding assessment instruments from the five days and try
to complete them now. If there are any outstanding assessment instruments you should
schedule a time to get them completed. Bear in mind that you may need to get input from your
supervisor.

A checklist of the assessment instruments used during the five days follows:

Instrument               Day      Page       Done?     If “no” schedule a target date
                                reference
Types of underwriting     1         55
                                                Yes
                                                No
Purpose of
                          2         66
                                                Yes
underwriting                                    No
Underwriting limits       3        123
                                                Yes
                                                No
Medical pathology #1      4        131
                                                Yes
                                                No
Medical pathology #2      4        146
                                                Yes
                                                No
Occupational              4        152
                                                Yes
                                                No
LOA                       5        170
                                                Yes
                                                No
Financial                 5        178
                                                Yes
                                                No
Medical schemes           5        183
                                                Yes
                                                No




Day 5: Initial training period
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                           Page 185



         Underwrite a standard risk in long-term insurance

Planning session
In the week following the five-day course the facilitator should arrange a planning and review
session. This session could last less than an hour or could be scheduled for the full day,
depending on the needs of learners.

The session should cover:

   A review of material not well understood by learners
   Repeats of formative assessments for learner’s Portfolios of Evidence
   Scheduling of on-going training sessions (the next 20 weeks)
   Resource allocation (or acquisition)

These sessions could be conducted on a one-on-one basis or as a group. We have not been
prescriptive about this as the facilitator will need to exercise judgement based on the specific
needs of the learners and the organisation supporting the learnership.

During this session the learners should also receive their first instructions concerning the first
weekly session. This session will cover:
1. Physical build, family history and genetics
2. A generic discussion of underwriting forms
3. Progress against the first simulation cases that learners need to complete.

In order to prepare for the first session:
1. Consult your available manuals and company procedures in order to establish what reading
    is required. Make notes of the recommended reading in the space below.
2. If you do not have specimen applications for insurance then the learners must fill out some.
    You will need eight applications duly completed. We recommend that the learners fill them
    in using dummy information and then make copies so that each learner has 8 dummy
    applications to assess. Note that there should be a limited number of “interesting features”
    in each application – do not make the applicant either supremely healthy or a miracle of
    survival!

Notes on reading resources
Possible reading source           Medical topic                      General topic
Underwriting manuals




Brackenridge or Merck




Planning session – Review and plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                 Page 186



Possible reading source         Medical topic                    General topic
Medical dictionaries




Web-sites




Medical journals and
magazines



Company procedures




Company documents




Other




Make notes on your reading in the space provided for the week.




Planning session – Review and plan
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                      Page 187



         Underwrite a standard risk in long-term insurance
Weekly modules
The weekly modules are set up to run over twenty weeks, in accordance with the programme
set out below. Each week contains a medical topic, a non-medical topic and scope to review
practical cases.

Note:

1. The practical cases do not need to relate to the topics covered during each week.
2. During the first 4 weeks the practical cases are planned to be simulations. Simulated
   applications could be created by the learners themselves.


     Class Lesson – medical             Class Lesson – non-
                                                                     Practical training
     topics                             medical topics
                                                                      Cases 7½ hours
Week  Formal 1 to 1½ hours              Formal Nil
                                                                      One-on-one review
      Reading 2½ hours                  Reading 30 minutes
                                                                        1½ hours
      Review 2½ hours                   Review 1 hour
     Physical build, family history     General discussion of
 1                                                                   8 simulation cases
     and genetics                       underwriting forms
     Cardio-vascular system - heart     Occupation definitions
 2                                                                   8 simulation cases
     and blood pressure                 useful and not useful
     Cardio-vascular system -           Occupations sensitive to
 3                                                                   10 simulation cases
     peripheral and cholesterol         claims
                                        Financial underwriting
  4     Respiratory system                                           12 simulation cases
                                        and insurable interest
                                        Health conflicts with the
  5     Tumours                                                      12 practical cases
                                        work environment
        Locomotor or musculo-skeletal   Quality of working
  6                                                                  12 practical cases
        system                          environment
                                        Mining - underground
  7     Review 1                                                     15 practical cases
                                        and open cast
        Endocrine and metabolic         Heavy machinery and
  8                                                                  15 practical cases
        system                          construction
  9     Gastro-intestinal track         Military personnel           18 practical cases
        Urogenitary or genito-urinary
 10                                     Security firms               18 practical cases
        system
        Haematology, blood and          Liquor and entertainment
 11                                                                  20 practical cases
        lymphatic systems               industries
 12     Eye, ear, nose and throat       Working with electricity     20 practical cases
 13     Skin                            Working with explosives      22 practical cases
                                        Aviation - flying as a job
 14     Review 2                                                     22 practical cases
                                        or as a pastime
        Neurology, mental, nervous      Diving - amateur and
 15                                                                  25 practical cases
        and psychiatric                 professional
        Infectious and parasitic
 16                                     Racing                       25 practical cases
        diseases



Weekly modules
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 188



     Class Lesson – medical              Class Lesson – non-
                                                                   Practical training
     topics                              medical topics
                                                                    Cases 7½ hours
Week  Formal 1 to 1½ hours               Formal Nil
                                                                    One-on-one review
      Reading 2½ hours                   Reading 30 minutes
                                                                      1½ hours
      Review 2½ hours                    Review 1 hour
     Habits, substance abuse and
 17                                      Cyclical industries       28 practical cases
     drug dependence
                                         Residence and travel
 18     Transplants                                                28 practical cases
                                         considerations
 19     Review 3                         Micro-lenders             30 practical cases
 20     Summary review                   Review                    30 practical cases

Learner material in respect of each of these weeks follows.




Weekly modules
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                        Page 189




Notes for the facilitator
All the medical topics should include a presentation and discussion that involves an
experienced underwriter. It may be useful to involve an underwriter in some of the occupational
discussions as well, although this is left to your judgement.

In order to prepare the expert for his/her presentation you should provide him/her with a copy of
the topic notes for the relevant section along with an indication of the pre-work and reading that
the learners will be doing.

The weekly meetings are scheduled to last some 4 to 5 hours. Each should have a clear time-
table that will include:
 Facilitated discussion of progress with learning.
 Review of reading and preparation done for this meeting.
 Review of progress with practical work and cases.
 Presentation by expert and discussion of medical topic.
 On-going discussion of medical and non-medical topics.
 Preparation for next meeting.
 Final review of learning plan and action steps for ensuring that progress is maintained.




Weekly modules
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 190



         Underwrite a standard risk in long-term insurance

Week 1

The topics for this week are:
1. Medical: Physical build, family history and genetics
2. General: General discussion of underwriting forms
3. Practical: 8 simulation exercises

Learners should be prepared for this session based on their plan from the planning session.
Include your notes from your reading in the space that follows:

Medical topic           Physical build, family history and genetics
Reading consulted




Key points found




Questions arising




Week 1 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 191




General topic          General discussion of underwriting forms
Reading consulted




Key points found




Questions arising




Practical cases

Make notes on your practical cases here:

Number of cases
completed              Simulation cases:

                       Practical (real) cases:

Key lessons learnt




Difficulties
encountered



Questions arising




Week 1 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 192



Personal evaluation

Consider the following questions and assess your progress towards operating as a professional
underwriter. This exercise is for your own development and does not need to be shared with
others.

What have you done
over the past week to
protect the company?




What have you done
in order to give
excellent service to
your clients and build
good relationships
with them?




What else have you
done well over the
last week?




What are you
planning to do
differently over the
next week?




Week 1 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                         Page 193




Week 1 Medical Topic: Physical build, family history and genetics

Objective: By the end of this session the learner will be able to:
      Understand the relevance and impact of height-to-weight ratios.
      Determine a rating for individuals who fall outside a normal height-to-weight range.
      Identify the main diseases taken into account when considering family history.
      Understand the risk factors for those who disclose family history of certain illnesses.
      List and describe hereditary diseases and locate them in the underwriting manual.

Resource material for the learner to use:
      Your underwriting manuals
      Medical manuals and dictionaries

Questions to ask learners to check understanding:
      Identify the ratings for a male aged 20 who is 175cm and 110kg.
      Determine the BMI (Body Mass Index) for a male (40) who is 175cm and 110kg.
      Name two types of family history you need to take into account.
      Explain why being overweight is a risk factor for some diseases.

Learner’s notes:




Week 1 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 194




Week 1 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                          Page 195




Week 1 General Topic: General discussion of underwriting forms

Objective: By the end of this session the learner will be able to:
      Identify all the underwriting forms used by the company.
      Indicate when each form might be used.

Resource material for the learner to use:
      Your department's underwriting forms.
      Your underwriting manuals.

Questions to ask learners to check understanding:
          Name 10 different underwriting forms used by the department.
          Indicate when each form would be used.

Learner’s notes:




Week 1 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 196




Week 1 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                       Page 197




Preparation for next session
The next session will cover:
1. Cardio-vascular system – heart and blood pressure.
2. Occupation definitions useful and not useful.
3. Progress against the next 8 simulation cases that learners need to complete.

In order to prepare for the next session:
1. Consult your available manuals and company procedures in order to establish what reading
    is required. Make notes of the recommended reading in the space below.
2. If you do not have specimen applications for insurance then the learners must fill out some.
    You will need eight applications duly completed. We recommend that the learners fill them
    in using dummy information and then make copies so that each learner has 8 dummy
    applications to assess. Note that there should be a limited number of “interesting features”
    in each application – do not make the applicant either supremely healthy or a miracle of
    survival!

Notes on reading resources
Possible reading source          Medical topic                    General topic
Underwriting manuals




Brackenridge or Merck




Medical dictionaries




Web-sites




Medical journals and
magazines



Company procedures




Week 1 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                 Page 198



Possible reading source         Medical topic                    General topic
Company documents




Other




Make notes on your reading in the space provided for the week.




Week 1 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 199



         Underwrite a standard risk in long-term insurance

Week 2

The topics for this week are:
1. Medical: Cardio-vascular system – heart and blood pressure
2. General: Occupation definitions useful and not useful
3. Practical: 8 simulation exercises

Learners should be prepared for this session based on their plan from the previous session.
Include your notes from your reading in the space that follows:

Medical topic           Cardio-vascular system – heart and blood pressure
Reading consulted




Key points found




Questions arising




Week 2 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 200




General topic          Occupation definitions useful and not useful
Reading consulted




Key points found




Questions arising




Practical cases

Make notes on your practical cases here:

Number of cases
completed              Simulation cases:

                       Practical (real) cases:

Key lessons learnt




Difficulties
encountered



Questions arising




Week 2 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 201



Personal evaluation

Consider the following questions and assess your progress towards operating as a professional
underwriter. This exercise is for your own development and does not need to be shared with
others.

What have you done
over the past week to
protect the company?




What have you done
in order to give
excellent service to
your clients and build
good relationships
with them?




What else have you
done well over the
last week?




What are you
planning to do
differently over the
next week?




Week 2 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                         Page 202




Week 2 Medical Topic: Cardio-vascular system – heart and blood pressure

Objective: By the end of this session the learner will be able to:
      Understand the anatomy and physiology of the heart.
      Understand the relevance and impact of hypertension.
      Determine a rating for individuals who fall outside a normal blood pressure range.
      List and describe the congenital heart defects and locate them in the underwriting
       manual.
      Understand the impact of heart murmurs.
      Understand the impact of the various heart diseases.

Resource material for the learner to use:
      Your underwriting manuals
      Medical manuals and dictionaries

Questions to ask learners to check understanding:
      Identify the ratings for a male aged 40 whose blood pressure is 160/100.
      Explain the abnormalities that are indicated by diastolic and systolic murmurs.
      Discuss three congenital heart defects.
      Discuss the prognostic factors of Coronary artery disease.
      Discuss three ECG abnormalities.

Learner’s notes:




Week 2 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 203




Week 2 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                      Page 204




Week 2 General Topic: Occupation definitions useful and not useful

Objective: By the end of this session the learner will be able to:
          Explain why some occupation definitions are not useful (including generic terms,
           such as “director”, as well as unqualified terms such as “diver”).
          Indicate the correct response when an unhelpful occupation definition is given on an
           application form.

Resource material for the learner to use:
          Your occupational and avocational manuals
          Learner notes on occupations and avocations

Questions to ask learners to check understanding:
          Give three examples of an unhelpful occupation definition.
          Explain why these definitions are not helpful.
          Explain the company’s procedure for clarifying the occupation in each case.

Learner’s notes:




Week 2 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 205




Week 2 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                       Page 206




Preparation for next session
The next session will cover:
1. Cardio-vascular system – peripheral and cholesterol
2. Occupations sensitive to claims
3. Progress against the next 10 simulation cases that learners need to complete.

In order to prepare for the next session:
1. Consult your available manuals and company procedures in order to establish what reading
    is required. Make notes of the recommended reading in the space below.
2. If you do not have specimen applications for insurance then the learners must fill out some.
    You will need ten applications duly completed. We recommend that the learners fill them in
    using dummy information and then make copies so that each learner has 10 dummy
    applications to assess. Note that there should be a limited number of “interesting features”
    in each application – do not make the applicant either supremely healthy or a miracle of
    survival!

Notes on reading resources
Possible reading source          Medical topic                    General topic
Underwriting manuals




Brackenridge or Merck




Medical dictionaries




Web-sites




Medical journals and
magazines



Company procedures




Week 2 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                 Page 207



Possible reading source         Medical topic                    General topic
Company documents




Other




Make notes on your reading in the space provided for the week.




Week 2 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 208



         Underwrite a standard risk in long-term insurance

Week 3

The topics for this week are:
1. Medical: Cardio-vascular system – peripheral and cholesterol
2. General: Occupations sensitive to claims
3. Practical: 10 simulation exercises

Learners should be prepared for this session based on their plan from the previous session.
Include your notes from your reading in the space that follows:

Medical topic           Cardio-vascular system – peripheral and cholesterol
Reading consulted




Key points found




Questions arising




Week 3 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 209




General topic          Occupations sensitive to claims
Reading consulted




Key points found




Questions arising




Practical cases

Make notes on your practical cases here:

Number of cases
completed              Simulation cases:

                       Practical (real) cases:

Key lessons learnt




Difficulties
encountered



Questions arising




Week 3 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 210



Personal evaluation

Consider the following questions and assess your progress towards operating as a professional
underwriter. This exercise is for your own development and does not need to be shared with
others.

What have you done
over the past week to
protect the company?




What have you done
in order to give
excellent service to
your clients and build
good relationships
with them?




What else have you
done well over the
last week?




What are you
planning to do
differently over the
next week?




Week 3 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                        Page 211




Week 3 Medical Topic: Cardio-vascular system - peripheral and cholesterol

Objective: By the end of this session the learner will be able to:
      Understand the anatomy and physiology of the circulation of blood.
      Understand the impact of the various diseases associated with poor blood circulation.
      Understand the relevance and impact of cholesterol-to-HDL ratio.
      Determine a rating for individuals who fall outside a normal cholesterol range.

Resource material for the learner to use:
      Your underwriting manuals
      Medical manuals and dictionaries

Questions to ask learners to check understanding:
      Determine a rating for a female (40) whose cholesterol reading is 7.3.
      Explain which risk factors must be taken into account with raised cholesterol.
      Explain the impact of arteriosclerosis.

Learner’s notes:




Week 3 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 212




Week 3 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                          Page 213




Week 3 General Topic: Occupations sensitive to claims

Objective: By the end of this session the learner will be able to:
          Identify at least five occupations that are linked to higher mortality (death) risk.
          Identify (with reasons) at least five occupations that are linked to higher morbidity
           (disability) risk, other than those identified above.

Resource material for the learner to use:
          Your occupational and avocational manuals

Questions to ask learners to check understanding:
          Name five occupations that are linked to higher mortality risk.
          Name five occupations that are linked to higher morbidity risk without being linked to
           higher mortality risk.
          Suggest reasons why these occupations experience higher morbidity risk.

Learner’s notes:




Week 3 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 214




Week 3 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                      Page 215




Preparation for next session
The next session will cover:
1. Respiratory system
2. Financial underwriting and insurable interest
3. Progress against the next 12 simulation cases that learners need to complete.

In order to prepare for the next session:
1. Consult your available manuals and company procedures in order to establish what reading
    is required. Make notes of the recommended reading in the space below.
2. If you do not have specimen applications for insurance then the learners must fill out some.
    You will need twelve applications duly completed. We recommend that the learners fill them
    in using dummy information and then make copies so that each learner has 12 dummy
    applications to assess. Note that there should be a limited number of “interesting features”
    in each application – do not make the applicant either supremely healthy or a miracle of
    survival!

Notes on reading resources
Possible reading source         Medical topic                    General topic
Underwriting manuals




Brackenridge or Merck




Medical dictionaries




Web-sites




Medical journals and
magazines



Company procedures




Week 3 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                 Page 216



Possible reading source         Medical topic                    General topic
Company documents




Other




Make notes on your reading in the space provided for the week.




Week 3 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 217



         Underwrite a standard risk in long-term insurance

Week 4

The topics for this week are:
1. Medical: Respiratory system
2. General: Financial underwriting and insurable interest
3. Practical: 12 simulation exercises

Learners should be prepared for this session based on their plan from the previous session.
Include your notes from your reading in the space that follows:

Medical topic           Respiratory system
Reading consulted




Key points found




Questions arising




Week 4 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 218




General topic          Financial underwriting and insurable interest
Reading consulted




Key points found




Questions arising




Practical cases

Make notes on your practical cases here:

Number of cases
completed              Simulation cases:

                       Practical (real) cases:

Key lessons learnt




Difficulties
encountered



Questions arising




Week 4 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 219



Personal evaluation

Consider the following questions and assess your progress towards operating as a professional
underwriter. This exercise is for your own development and does not need to be shared with
others.

What have you done
over the past week to
protect the company?




What have you done
in order to give
excellent service to
your clients and build
good relationships
with them?




What else have you
done well over the
last week?




What are you
planning to do
differently over the
next week?




Week 4 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                   Page 220




Week 4 Medical Topic: Respiratory system

Objective: By the end of this session the learner will be able to:
      Understand the anatomy and physiology of the respiratory system.
      Determine a rating for an abnormal Vitalogram.
      Determine ratings for the relevant lung diseases.
      Name the prognostic factors regarding lung diseases.

Resource material for the learner to use:
      Your underwriting manuals
      Medical manuals and dictionaries

Questions to ask learners to check understanding:
      Discuss the difference between pneumothorax, hemothorax and empyema.
      Discuss the prognostic factors regarding chronic obstructive airways disease.
      Determine a rating for a female (35) who is suffering from moderate asthma. The
       Vitalogram is normal. She is a smoker.
      Discuss the disease "Pneumoconiosis".

Learner’s notes:




Week 4 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 221




Week 4 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                      Page 222




Week 4 General Topic: Financial underwriting and insurable interest

Objective: By the end of this session the learner will be able to:
          Process basic financial underwriting information.
          Understand when to refer information to a senior underwriter.

Resource material for the learner to use:
          Your occupational and avocational manuals.
          Company application forms (standard and financial underwriting forms).
          Company procedures notes.
          Learner notes in section on financial underwriting.

Questions to ask learners to check understanding:
          When do you need to refer a case to a senior underwriter due to a need for financial
           underwriting?
          Identify what financial information is contained in the standard policy application
           form.

Learner’s notes:




Week 4 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 223




Week 4 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                   Page 224




Preparation for next session
The next session will cover:
1. Tumours
2. Health conflicts with the work environment
3. Progress against the first 12 practical cases that learners need to complete.

In order to prepare for the next session:
1. Consult your available manuals and company procedures in order to establish what reading
    is required. Make notes of the recommended reading in the space below.
2. Process and document the practical cases as part of your normal work routine.

Notes on reading resources
Possible reading source          Medical topic                    General topic
Underwriting manuals




Brackenridge or Merck




Medical dictionaries




Web-sites




Medical journals and
magazines



Company procedures




Company documents




Week 4 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                 Page 225



Possible reading source         Medical topic                    General topic
Other




Make notes on your reading in the space provided for the week.




Week 4 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 226



         Underwrite a standard risk in long-term insurance

Week 5

The topics for this week are:
1. Medical: Tumours
2. General: Health conflicts with the working environment
3. Practical: 12 practical exercises

Learners should be prepared for this session based on their plan from the previous session.
Include your notes from your reading in the space that follows:

Medical topic           Tumours
Reading consulted




Key points found




Questions arising




Week 5 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 227




General topic          Health conflicts with the work environment
Reading consulted




Key points found




Questions arising




Practical cases

Make notes on your practical cases here:

Number of cases
completed              Practical cases:

                       Practical (real) cases:

Key lessons learnt




Difficulties
encountered



Questions arising




Week 5 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 228



Personal evaluation

Consider the following questions and assess your progress towards operating as a professional
underwriter. This exercise is for your own development and does not need to be shared with
others.

What have you done
over the past week to
protect the company?




What have you done
in order to give
excellent service to
your clients and build
good relationships
with them?




What else have you
done well over the
last week?




What are you
planning to do
differently over the
next week?




Week 5 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                         Page 229




Week 5 Medical Topic: Tumours

Objective: By the end of this session the learner will be able to:
      Distinguish between a malignant and benign tumour.
      Understand the tumours of the different systems.
      Determine a decision for an individual suffering from a tumour.

Resource material for the learner to use:
      Your underwriting manuals
      Medical manuals and dictionaries

Questions to ask learners to check understanding:
      Discuss the tumours of the following systems:
        Cardio-vascular system.
        Respiratory system.
        Musculo-skeletal system.
        Endocrine and metabolic system.
        Gastro-intestinal track (including polyps).
        Urogenitary or genito-urinary system.
        Blood and lymphatic systems.
        Eye, ear, nose and throat.
        Skin.

Learner’s notes:




Week 5 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 230




Week 5 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                      Page 231




Week 5 General Topic: Health conflicts with the work environment

Objective: By the end of this session the learner will be able to:
          Understand how health conditions can come into conflict with a working
           environment.
          Suggest ways of mitigating this conflict by re-assigning employees or making
           alternative use of their skills.
          Understand the rating implications for a proposal where the applicant suffers from a
           chronic medical condition that is aggravated by or conflicts with his/her working
           environment.

Resource material for the learner to use:
      Your occupational and avocational manuals.
      Your medical and underwriting manuals.
      Web-site information on disabilities and hazardous work environments.

Questions to ask learners to check understanding:
          Give four examples of health conditions that could come into conflict with a working
           environment.
          In each case suggest what re-assignment (if any) within the same industry could be
           considered for a sufferer of the adverse health condition.
          In each case suggest how the individual’s skills and experience might be utilised
           elsewhere.
          Suggest a rating for an applicant who is a dental surgeon who suffers from psoriasis.

Learner’s notes:




Week 5 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 232




Week 5 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                  Page 233




Preparation for next session
The next session will cover:
1. Locomotor or musculo-skeletal system.
2. Quality of working environment.
3. Progress against the next 12 practical cases that learners need to complete.

In order to prepare for the next session:
1. Consult your available manuals and company procedures in order to establish what reading
    is required. Make notes of the recommended reading in the space below.
2. Process and document the practical cases as part of your normal work routine.

Notes on reading resources
Possible reading source         Medical topic                   General topic
Underwriting manuals




Brackenridge or Merck




Medical dictionaries




Web-sites




Medical journals and
magazines



Company procedures




Company documents




Week 5 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                 Page 234



Possible reading source         Medical topic                    General topic
Other




Make notes on your reading in the space provided for the week.




Week 5 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 235



         Underwrite a standard risk in long-term insurance

Week 6

The topics for this week are:
1. Medical: Locomotor or musculo-skeletal system
2. General: Quality of working environment
3. Practical: 12 practical exercises

Learners should be prepared for this session based on their plan from the previous session.
Include your notes from your reading in the space that follows:

Medical topic           Locomotor or musculo-skeletal system
Reading consulted




Key points found




Questions arising




Week 6 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 236




General topic          Quality of working environment
Reading consulted




Key points found




Questions arising




Practical cases

Make notes on your practical cases here:

Number of cases
completed              Practical cases:

                       Practical (real) cases:

Key lessons learnt




Difficulties
encountered



Questions arising




Week 6 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 237



Personal evaluation

Consider the following questions and assess your progress towards operating as a professional
underwriter. This exercise is for your own development and does not need to be shared with
others.

What have you done
over the past week to
protect the company?




What have you done
in order to give
excellent service to
your clients and build
good relationships
with them?




What else have you
done well over the
last week?




What are you
planning to do
differently over the
next week?




Week 6 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                      Page 238




Week 6 Medical Topic: Locomotor or musculo-skeletal system

Objective: By the end of this session the learner will be able to:
      Understand the anatomy and physiology of the musculo-skeletal system.
      Understand the impact of impairments related to the musculo-skeletal system on
       disability and health benefits.
      List and explain the impact of some occupations on impairments related to the musculo-
       skeletal system.

Resource material for the learner to use:
      Your underwriting manuals
      Medical manuals and dictionaries

Questions to ask learners to check understanding:
      Discuss the impact of impairments related to the musculo-skeletal system on disability
       benefits.
      Discuss the impact of impairments related to the musculo-skeletal system on health
       benefits.
      Discuss the impact of some (at least three) occupations on impairments related to the
       musculo-skeletal system.

Learner’s notes:




Week 6 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 239




Week 6 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                        Page 240




Week 6 General Topic: Quality of working environment

Objective: By the end of this session the learner will be able to:
          Identify how the working environment can impact on mortality risks.
          Identify how the working environment can impact on morbidity risks.
          Comment on hazards in the working environment that may only become evident over
           a long period.

Resource material for the learner to use:
          Your occupational and avocational manuals.
          Medical and underwriting manuals.
          Disability web-sites and sites for support groups.

Questions to ask learners to check understanding:
          Comment on asbestos and how it became a problem in the workplace.
          Identify at least three types of work environment that may involve hazardous
           materials and chemicals.
          What impact might poor lighting have on the likelihood of a death or disability claim?
          What impact might poor ventilation have on the likelihood of a death or disability
           claim?

Learner’s notes:




Week 6 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 241




Week 6 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                  Page 242




Preparation for next session
The next session will cover:
1. Review 1 (medical).
2. Mining – underground and open cast.
3. Progress against the next 15 practical cases that learners need to complete.

In order to prepare for the next session:
1. Consult your available manuals and company procedures in order to establish what reading
    is required. Make notes of the recommended reading in the space below.
2. Process and document the practical cases as part of your normal work routine.

Notes on reading resources
Possible reading source         Medical topic                   General topic
Underwriting manuals




Brackenridge or Merck




Medical dictionaries




Web-sites




Medical journals and
magazines



Company procedures




Company documents




Week 6 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                 Page 243



Possible reading source         Medical topic                    General topic
Other




Make notes on your reading in the space provided for the week.




Week 6 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 244



         Underwrite a standard risk in long-term insurance

Week 7

The topics for this week are:
1. Medical: Review 1
2. General: Mining – underground and open cast
3. Practical: 15 practical exercises

Learners should be prepared for this session based on their plan from the previous session.
Include your notes from your reading in the space that follows:

Medical topic           Review 1
Reading consulted




Key points found




Questions arising




Week 7 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 245




General topic          Mining – underground and open cast
Reading consulted




Key points found




Questions arising




Practical cases

Make notes on your practical cases here:

Number of cases
completed              Practical cases:

                       Practical (real) cases:

Key lessons learnt




Difficulties
encountered



Questions arising




Week 7 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 246



Personal evaluation

Consider the following questions and assess your progress towards operating as a professional
underwriter. This exercise is for your own development and does not need to be shared with
others.

What have you done
over the past week to
protect the company?




What have you done
in order to give
excellent service to
your clients and build
good relationships
with them?




What else have you
done well over the
last week?




What are you
planning to do
differently over the
next week?




Week 7 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                      Page 247




Week 7 Medical Topic: Review 1

Objective: By the end of this session the learner will be able to:
      Recall the relevance and impact of height-to-weight ratios.
      Recall the main diseases taken into account when considering family history.
      Recall the relevance and impact of hypertension.
      Recall the congenital heart defects.
      Recall the impact of heart murmurs.
      Recall the impact of the various heart diseases.
      Recall the impact of the various diseases associated with poor blood circulation.
      Recall the relevance and impact of cholesterol-to-HDL ratio.
      Recall tumours.
      Recall the prognostic factors regarding lung diseases.
      Recall the impact of impairments related to the musculo-skeletal system on disability and
       health benefits.
      Recall the impact of some occupations on impairments related to the musculo-skeletal
       system.

Resource material for the learner to use:
      Your underwriting manuals
      Medical manuals and dictionaries

Questions to ask learners to check understanding:
      Identify the ratings for a male aged 40 whose blood pressure is 160/100.
      Name the abnormalities that are indicated by diastolic and systolic murmurs.
      Name three congenital heart defects.
      Name the prognostic factors of Coronary artery disease.
      Name three ECG abnormalities.
      Determine a rating for a female (40) whose cholesterol reading is 7.3.
      Name the risk factors that must be taken into account with raised cholesterol.
      Determine a rating for a male (40) who is suffering from haemophilia.
      Discuss the various tumours.
      Name the difference between pneumothorax, hemothorax and empyema.
      Name the prognostic factors regarding chronic obstructive airways disease.
      Determine a rating for a female (35) who is suffering from moderate asthma. The
       Vitalogram is normal. She is a smoker.
      Discuss the impact of impairments related to the musculo-skeletal system on disability
       benefits.
      Discuss the impact of impairments related to the musculo-skeletal system on health
       benefits.
      Discuss the impact of some occupations on impairments related to the musculo-skeletal
       system.

Learner’s notes:




Week 7 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 248




Week 7 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                        Page 249




Week 7 General Topic: Mining – underground and open cast

Objective: By the end of this session the learner will be able to:
          Identify different types of mining.
          Identify different risks associated with mining.
          Suggest a rating for different risks.

Resource material for the learner to use:
          Your occupational and avocational manuals.

Questions to ask learners to check understanding:
          List at least three different ways in which mining of minerals takes place.
          List at least three different special mortality risks that are associated with mining.
          Identify key risks and suggest mortality and morbidity ratings for the following cases:
                    o A gold miner (labourer), who works 40 hours per week underground.
                    o An explosives expert linked to gold mining, who works 15 hours per week
                       underground.
                    o A gold mine manager who inspects work underground – spends
                       approximately 5 hours per week underground.
                    o A large truck driver on an open cast coal mine.
                    o A diver involved in the recovery of alluvial diamonds.

Learner’s notes:




Week 7 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 250




Week 7 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                  Page 251




Preparation for next session
The next session will cover:
1. Endocrine and metabolic system
2. Heavy machinery and construction
3. Progress against the next 15 practical cases that learners need to complete.

In order to prepare for the next session:
1. Consult your available manuals and company procedures in order to establish what reading
    is required. Make notes of the recommended reading in the space below.
2. Process and document the practical cases as part of your normal work routine.

Notes on reading resources
Possible reading source         Medical topic                   General topic
Underwriting manuals




Brackenridge or Merck




Medical dictionaries




Web-sites




Medical journals and
magazines



Company procedures




Company documents




Week 7 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                 Page 252



Possible reading source         Medical topic                    General topic
Other




Make notes on your reading in the space provided for the week.




Week 7 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 253



         Underwrite a standard risk in long-term insurance

Week 8

The topics for this week are:
1. Medical: Endocrine and metabolic system
2. General: Heavy machinery and construction
3. Practical: 15 practical exercises

Learners should be prepared for this session based on their plan from the previous session.
Include your notes from your reading in the space that follows:

Medical topic           Endocrine and metabolic system
Reading consulted




Key points found




Questions arising




Week 8 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 254




General topic          Heavy machinery and construction
Reading consulted




Key points found




Questions arising




Practical cases

Make notes on your practical cases here:

Number of cases
completed              Practical cases:

                       Practical (real) cases:

Key lessons learnt




Difficulties
encountered



Questions arising




Week 8 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 255



Personal evaluation

Consider the following questions and assess your progress towards operating as a professional
underwriter. This exercise is for your own development and does not need to be shared with
others.

What have you done
over the past week to
protect the company?




What have you done
in order to give
excellent service to
your clients and build
good relationships
with them?




What else have you
done well over the
last week?




What are you
planning to do
differently over the
next week?




Week 8 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 256




Week 8 Medical Topic: Endocrine and metabolic system

Objective: By the end of this session the learner will be able to:
      Understand the anatomy and physiology of the endocrine and metabolic system.
      Determine a rating for individuals who suffer from an impairment of the endocrine and
       metabolic system.
      Interpret a Glucose tolerance test.
      Name the prognostic factors for Diabetes Mellitus.

Resource material for the learner to use:
      Your underwriting manuals.
      Medical manuals and dictionaries.

Questions to ask learners to check understanding:
      Determine a rating for a female (47) who is suffering from Insulin-dependent Diabetes
       Mellitus.
      Discuss the various glands in the endocrine and metabolic system.

Learner’s notes:




Week 8 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 257




Week 8 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 258




Week 8 General Topic: Heavy machinery and construction

Objective: By the end of this session the learner will be able to:
          Identify risks associated with construction.
          Identify types of heavy machinery and their associated risks.

Resource material for the learner to use:
          Your occupational and avocational manuals

Questions to ask learners to check understanding:
          List risks and suggest mortality and morbidity ratings for the following:
                    o A civil engineer working on-site building a new dam.
                    o A long distance driver of an extra heavy duty vehicle.
                    o A road worker who uses a pneumatic drill.
                    o A printing press operator.
                    o A crane operator (docks)
          List five types of heavy machinery and say why they could be hazardous to those
           working with them.

Learner’s notes:




Week 8 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 259




Week 8 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                  Page 260




Preparation for next session
The next session will cover:
1. Gastro-intestinal tract
2. Military personnel
3. Progress against the next 18 practical cases that learners need to complete.

In order to prepare for the next session:
1. Consult your available manuals and company procedures in order to establish what reading
    is required. Make notes of the recommended reading in the space below.
2. Process and document the practical cases as part of your normal work routine.

Notes on reading resources
Possible reading source         Medical topic                   General topic
Underwriting manuals




Brackenridge or Merck




Medical dictionaries




Web-sites




Medical journals and
magazines



Company procedures




Company documents




Week 8 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                 Page 261



Possible reading source         Medical topic                    General topic
Other




Make notes on your reading in the space provided for the week.




Week 8 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 262



         Underwrite a standard risk in long-term insurance

Week 9

The topics for this week are:
1. Medical: Gastro-intestinal tract
2. General: Military personnel
3. Practical: 18 practical exercises

Learners should be prepared for this session based on their plan from the previous session.
Include your notes from your reading in the space that follows:

Medical topic           Gastro-intestinal tract
Reading consulted




Key points found




Questions arising




Week 9 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 263




General topic          Military personnel
Reading consulted




Key points found




Questions arising




Practical cases

Make notes on your practical cases here:

Number of cases
completed              Practical cases:

                       Practical (real) cases:

Key lessons learnt




Difficulties
encountered



Questions arising




Week 9 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 264



Personal evaluation

Consider the following questions and assess your progress towards operating as a professional
underwriter. This exercise is for your own development and does not need to be shared with
others.

What have you done
over the past week to
protect the company?




What have you done
in order to give
excellent service to
your clients and build
good relationships
with them?




What else have you
done well over the
last week?




What are you
planning to do
differently over the
next week?




Week 9 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                        Page 265




Week 9 Medical Topic: Gastro-intestinal track

Objective: By the end of this session the learner will be able to:
      Understand the anatomy and physiology of the gastro-intestinal track.
      Determine a rating for individuals who suffers from a disease of the gastro-intestinal
       track.

Resource material for the learner to use:
      Your underwriting manuals
      Medical manuals and dictionaries

Questions to ask learners to check understanding:
      Determine a rating for a male aged 35 who is suffering from Ulcerative colitis and did not
       undergo surgery.

Learner’s notes:




Week 9 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 266




Week 9 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                          Page 267




Week 9 General Topic: Military personnel

Objective: By the end of this session the learner will be able to:
          Identify risks associated with military personnel.
          Suggest ratings for life and disability risks for military personnel.

Resource material for the learner to use:
          Your occupational and avocational manuals.

Questions to ask learners to check understanding:
          Identify risks and suggest loadings (death and disability) for the following types of
           military personnel:
                   o A Lieutenant-General in the Air Force.
                   o A Commodore in the Navy.
                   o A Captain in the Army (Infantry).
                   o A Sergeant in the Military Police.
                   o A Corporal in the Artillery.
                   o An Ensign in the Navy (submarines).

Learner’s notes:




Week 9 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 268




Week 9 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                  Page 269




Preparation for next session
The next session will cover:
1. Urogenitary or genito-urinary system
2. Security firms
3. Progress against the next 18 practical cases that learners need to complete.

In order to prepare for the next session:
1. Consult your available manuals and company procedures in order to establish what reading
    is required. Make notes of the recommended reading in the space below.
2. Process and document the practical cases as part of your normal work routine.

Notes on reading resources
Possible reading source         Medical topic                   General topic
Underwriting manuals




Brackenridge or Merck




Medical dictionaries




Web-sites




Medical journals and
magazines



Company procedures




Company documents




Week 9 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                 Page 270



Possible reading source         Medical topic                    General topic
Other




Make notes on your reading in the space provided for the week.




Week 9 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 271



         Underwrite a standard risk in long-term insurance

Week 10

The topics for this week are:
1. Medical: Urogenitary or genito-urinary system
2. General: Security firms
3. Practical: 18 practical exercises

Learners should be prepared for this session based on their plan from the previous session.
Include your notes from your reading in the space that follows:

Medical topic           Urogenitary or genito-urinary system
Reading consulted




Key points found




Questions arising




Week 10 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 272




General topic          Security firms
Reading consulted




Key points found




Questions arising




Practical cases

Make notes on your practical cases here:

Number of cases
completed              Practical cases:

                       Practical (real) cases:

Key lessons learnt




Difficulties
encountered



Questions arising




Week 10 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 273



Personal evaluation

Consider the following questions and assess your progress towards operating as a professional
underwriter. This exercise is for your own development and does not need to be shared with
others.

What have you done
over the past week to
protect the company?




What have you done
in order to give
excellent service to
your clients and build
good relationships
with them?




What else have you
done well over the
last week?




What are you
planning to do
differently over the
next week?




Week 10 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                      Page 274




Week 10 Medical Topic: Urogenitary or genito-urinary system

Objective: By the end of this session the learner will be able to:
      Understand the anatomy and physiology of the urogenitary or genito-urinary system.
      Determine a rating for individuals who suffers from a disease of the urogenitary or
       genito-urinary system.
      Interpret a chemical and microscopic urinalysis.

Resource material for the learner to use:
      Your underwriting manuals
      Medical manuals and dictionaries

Questions to ask learners to check understanding:
      Determine a rating for a male (50) who is suffering from chronic glomerulonephritis.

Learner’s notes:




Week 10 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 275




Week 10 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                        Page 276




Week 10 General Topic: Security firms

Objective: By the end of this session the learner will be able to:
          Identify special risks associated with security firms.
          Suggest ratings for various employees of security firms.

Resource material for the learner to use:
          Your occupational and avocational manuals.

Questions to ask learners to check understanding:
          List at least three specific areas of risk for employees of security firms.
          Suggest death and disability ratings for the following employees of security firms:
                    o A night watchman.
                    o A night security guard – armed or unarmed.
                    o A night control-room operator.
                    o A manager with a home security company.
                    o A cash-in-transit driver.
                    o An armed response driver/field operative.

Learner’s notes:




Week 10 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 277




Week 10 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                  Page 278




Preparation for next session
The next session will cover:
1. Haematology, blood and lymphatic systems
2. Liquor and entertainment industries
3. Progress against the next 20 practical cases that learners need to complete.

In order to prepare for the next session:
1. Consult your available manuals and company procedures in order to establish what reading
    is required. Make notes of the recommended reading in the space below.
2. Process and document the practical cases as part of your normal work routine.

Notes on reading resources
Possible reading source         Medical topic                   General topic
Underwriting manuals




Brackenridge or Merck




Medical dictionaries




Web-sites




Medical journals and
magazines



Company procedures




Company documents




Week 10 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                 Page 279



Possible reading source         Medical topic                    General topic
Other




Make notes on your reading in the space provided for the week.




Week 10 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 280



         Underwrite a standard risk in long-term insurance

Week 11

The topics for this week are:
1. Medical: Haematology, blood and lymphatic systems
2. General: Liquor and entertainment industries
3. Practical: 20 practical exercises

Learners should be prepared for this session based on their plan from the previous session.
Include your notes from your reading in the space that follows:

Medical topic           Haematology, blood and lymphatic systems
Reading consulted




Key points found




Questions arising




Week 11 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 281




General topic          Liquor and entertainment industries
Reading consulted




Key points found




Questions arising




Practical cases

Make notes on your practical cases here:

Number of cases
completed              Practical cases:

                       Practical (real) cases:

Key lessons learnt




Difficulties
encountered



Questions arising




Week 11 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 282



Personal evaluation

Consider the following questions and assess your progress towards operating as a professional
underwriter. This exercise is for your own development and does not need to be shared with
others.

What have you done
over the past week to
protect the company?




What have you done
in order to give
excellent service to
your clients and build
good relationships
with them?




What else have you
done well over the
last week?




What are you
planning to do
differently over the
next week?




Week 11 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                      Page 283




Week 11 Medical Topic: Haematology, blood and lymphatic systems

Objective: By the end of this session the learner will be able to:
      Understand the anatomy and physiology of the blood and lymphatic systems.
      Determine a rating for individuals who suffers from a disease of the blood and lymphatic
       systems.
      Interpret a full blood count.

Resource material for the learner to use:
      Your underwriting manuals
      Medical manuals and dictionaries

Questions to ask learners to check understanding:
      Determine a rating for a male (40) who is suffering from haemophilia.

Learner’s notes:




Week 11 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 284




Week 11 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                            Page 285




Week 11 General Topic: Liquor and entertainment industries

Objective: By the end of this session the learner will be able to:
          Identify risks associated with the liquor and entertainment industries.
          Suggest death and disability ratings for employees in those industries.

Resource material for the learner to use:
          Your occupational and avocational manuals

Questions to ask learners to check understanding:
          List at least three special risks associated with the liquor and entertainment
           industries.
          Suggest death and disability ratings for the following:
                    o A barman at four-star hotel.
                    o A barman in a night club.
                    o An oenologist.
                    o A ballet dancer.
                    o An opera singer.
                    o A television actor.
                    o A circus ringmaster.

Learner’s notes:




Week 11 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 286




Week 11 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                  Page 287




Preparation for next session
The next session will cover:
1. Eye, ear, nose and throat
2. Working with electricity
3. Progress against the next 20 practical cases that learners need to complete.

In order to prepare for the next session:
1. Consult your available manuals and company procedures in order to establish what reading
    is required. Make notes of the recommended reading in the space below.
2. Process and document the practical cases as part of your normal work routine.

Notes on reading resources
Possible reading source         Medical topic                   General topic
Underwriting manuals




Brackenridge or Merck




Medical dictionaries




Web-sites




Medical journals and
magazines



Company procedures




Company documents




Week 11 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                 Page 288



Possible reading source         Medical topic                    General topic
Other




Make notes on your reading in the space provided for the week.




Week 11 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 289



         Underwrite a standard risk in long-term insurance

Week 12

The topics for this week are:
1. Medical: Eye, ear, nose and throat
2. General: Working with electricity
3. Practical: 20 practical exercises

Learners should be prepared for this session based on their plan from the previous session.
Include your notes from your reading in the space that follows:

Medical topic           Eye, ear, nose and throat
Reading consulted




Key points found




Questions arising




Week 12 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 290




General topic          Working with electricity
Reading consulted




Key points found




Questions arising




Practical cases

Make notes on your practical cases here:

Number of cases
completed              Practical cases:

                       Practical (real) cases:

Key lessons learnt




Difficulties
encountered



Questions arising




Week 12 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 291



Personal evaluation

Consider the following questions and assess your progress towards operating as a professional
underwriter. This exercise is for your own development and does not need to be shared with
others.

What have you done
over the past week to
protect the company?




What have you done
in order to give
excellent service to
your clients and build
good relationships
with them?




What else have you
done well over the
last week?




What are you
planning to do
differently over the
next week?




Week 12 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                       Page 292




Week 12 Medical Topic: Eye, ear, nose and throat

Objective: By the end of this session the learner will be able to:
      Understand the anatomy and physiology of the eye, ear, nose and throat.
      Determine the impact on disability, accident and health benefits when hearing or vision
       loss is experienced.

Resource material for the learner to use:
      Your underwriting manuals
      Medical manuals and dictionaries

Questions to ask learners to check understanding:
      Discuss the impact on disability, accident and health benefits when hearing or vision loss
       is experienced.

Learner’s notes:




Week 12 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 293




Week 12 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                      Page 294




Week 12 General Topic: Working with electricity

Objective: By the end of this session the learner will be able to:
          Identify the risks associated with working with electricity.
          Suggest appropriate ratings for various people working with electricity.

Resource material for the learner to use:
          Your occupational and avocational manuals.

Questions to ask learners to check understanding:
          What risks are associated with working with electricity?
          Suggest death and disability ratings for the following:
                  o An industrial electrician.
                  o An electricity linesman.
                  o An electrical engineer working at a nuclear power plant.
                  o An electricity meter reader.

Learner’s notes:




Week 12 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 295




Week 12 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                  Page 296




Preparation for next session
The next session will cover:
1. Skin
2. Working with explosives
3. Progress against the next 22 practical cases that learners need to complete.

In order to prepare for the next session:
1. Consult your available manuals and company procedures in order to establish what reading
    is required. Make notes of the recommended reading in the space below.
2. Process and document the practical cases as part of your normal work routine.

Notes on reading resources
Possible reading source         Medical topic                   General topic
Underwriting manuals




Brackenridge or Merck




Medical dictionaries




Web-sites




Medical journals and
magazines



Company procedures




Company documents




Week 12 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                 Page 297



Possible reading source         Medical topic                    General topic
Other




Make notes on your reading in the space provided for the week.




Week 12 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 298



         Underwrite a standard risk in long-term insurance

Week 13

The topics for this week are:
1. Medical: Skin
2. General: Working with explosives
3. Practical: 22 practical exercises

Learners should be prepared for this session based on their plan from the previous session.
Include your notes from your reading in the space that follows:

Medical topic           Skin
Reading consulted




Key points found




Questions arising




Week 13 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 299




General topic          Working with explosives
Reading consulted




Key points found




Questions arising




Practical cases

Make notes on your practical cases here:

Number of cases
completed              Practical cases:

                       Practical (real) cases:

Key lessons learnt




Difficulties
encountered



Questions arising




Week 13 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 300



Personal evaluation

Consider the following questions and assess your progress towards operating as a professional
underwriter. This exercise is for your own development and does not need to be shared with
others.

What have you done
over the past week to
protect the company?




What have you done
in order to give
excellent service to
your clients and build
good relationships
with them?




What else have you
done well over the
last week?




What are you
planning to do
differently over the
next week?




Week 13 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                 Page 301




Week 13 Medical Topic: Skin

Objective: By the end of this session the learner will be able to:
      Understand the anatomy and physiology of the skin.
      Determine which occupations are a high risk to skin diseases.
      Determine the impact of skin diseases on death and disability benefits.

Resource material for the learner to use:
      Your underwriting manuals
      Medical manuals and dictionaries

Questions to ask learners to check understanding:
      Discuss occupations that carry a high risk of skin diseases.
      Discuss the impact of skin diseases on death and disability benefits.

Learner’s notes:




Week 13 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 302




Week 13 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                        Page 303




Week 13 General Topic: Working with explosives

Objective: By the end of this session the learner will be able to:
          Identify different occupations that work with explosives.
          Suggest mortality and disability ratings for these occupations.

Resource material for the learner to use:
          Your occupational and avocational manuals.

Questions to ask learners to check understanding:
          Identify at least three different environments in which people work with explosives.
          Suggest death and disability ratings for these occupations.

Learner’s notes:




Week 13 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 304




Week 13 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                  Page 305




Preparation for next session
The next session will cover:
1. Review 2 (medical)
2. Aviation – flying as a job or as a pastime
3. Progress against the next 22 practical cases that learners need to complete.

In order to prepare for the next session:
1. Consult your available manuals and company procedures in order to establish what reading
    is required. Make notes of the recommended reading in the space below.
2. Process and document the practical cases as part of your normal work routine.

Notes on reading resources
Possible reading source         Medical topic                   General topic
Underwriting manuals




Brackenridge or Merck




Medical dictionaries




Web-sites




Medical journals and
magazines



Company procedures




Company documents




Week 13 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                 Page 306



Possible reading source         Medical topic                    General topic
Other




Make notes on your reading in the space provided for the week.




Week 13 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 307



         Underwrite a standard risk in long-term insurance

Week 14

The topics for this week are:
1. Medical: Review 2
2. General: Aviation – flying as a job or as a pastime
3. Practical: 22 practical exercises

Learners should be prepared for this session based on their plan from the previous session.
Include your notes from your reading in the space that follows:

Medical topic           Review 2
Reading consulted




Key points found




Questions arising




Week 14 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 308




General topic          Aviation – flying as a job or as a pastime
Reading consulted




Key points found




Questions arising




Practical cases

Make notes on your practical cases here:

Number of cases
completed              Practical cases:

                       Practical (real) cases:

Key lessons learnt




Difficulties
encountered



Questions arising




Week 14 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 309



Personal evaluation

Consider the following questions and assess your progress towards operating as a professional
underwriter. This exercise is for your own development and does not need to be shared with
others.

What have you done
over the past week to
protect the company?




What have you done
in order to give
excellent service to
your clients and build
good relationships
with them?




What else have you
done well over the
last week?




What are you
planning to do
differently over the
next week?




Week 14 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                       Page 310




Week 14 Medical Topic: Review 2

Objective: By the end of this session the learner will be able to:
      Recall how to interpret a Glucose tolerance test.
      Recall the prognostic factors for Diabetes Mellitus
      Recall the anatomy and physiology of the gastro-intestinal track.
      Recall the anatomy and physiology of the urogenitary or genito-urinary system.
      Recall how to interpret a chemical and microscopic urinalysis.
      Recall the anatomy and physiology of the blood and lymphatic systems.
      Recall how to interpret a full blood count.
      Recall the impact on disability, accident and health benefits when hearing or vision loss
       is experienced.
      Recall which occupations are a high risk to skin diseases.
      Recall the impact of skin diseases on death and disability benefits.

Resource material for the learner to use:
      Your underwriting manuals
      Medical manuals and dictionaries

Questions to ask learners to check understanding:
      Determine a rating for a female (47) who is suffering from Insulin-dependent Diabetes
       Mellitus.
      Name the various glands in the endocrine and metabolic system.
      Determine a rating for a male (35) who is suffering from Ulcerative colitis and did not
       undergo surgery.
      Determine a rating for a male (50) who is suffering from chronic glomerulonephritis.
      Determine a rating for a male (40) who is suffering from haemophilia.
      Discuss the impact on disability, accident and health benefits when hearing or vision loss
       is experienced.
      Discuss occupations that carry a high risk of skin diseases.
      Discuss the impact of skin diseases on death and disability benefits.

Learner’s notes:




Week 14 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 311




Week 14 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                      Page 312




Week 14 General Topic: Aviation - flying as a job or as a pastime

Objective: By the end of this session the learner will be able to:
          Divide the world of aviation according to different types of aircraft.
          Understand what is required in an aviation questionnaire.
          Suggest life and disability ratings for different types of aviation.

Resource material for the learner to use:
          Your occupational and avocational manuals.
          Your company’s aviation underwriting questionnaire.

Questions to ask learners to check understanding:
          Identify at least four different types of aircraft.
          Obtain a copy of the company’s aviation questionnaire and explain the need for each
           of the questions in that questionnaire.
          Suggest death and disability ratings for:
                   o An airline pilot (commercial airline).
                   o A crop-sprayer (fixed wing aircraft).
                   o A crop-sprayer (helicopter).
                   o A micro-light pilot (private flying, approx. 100 hours per annum, 250 hours
                        flying experience).

Learner’s notes:




Week 14 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 313




Week 14 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                  Page 314




Preparation for next session
The next session will cover:
1. Neurology, mental, nervous and psychiatric.
2. Diving – amateur and professional.
3. Progress against the next 25 practical cases that learners need to complete.

In order to prepare for the next session:
1. Consult your available manuals and company procedures in order to establish what reading
    is required. Make notes of the recommended reading in the space below.
2. Process and document the practical cases as part of your normal work routine.

Notes on reading resources
Possible reading source         Medical topic                   General topic
Underwriting manuals




Brackenridge or Merck




Medical dictionaries




Web-sites




Medical journals and
magazines



Company procedures




Company documents




Week 14 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                 Page 315



Possible reading source         Medical topic                    General topic
Other




Make notes on your reading in the space provided for the week.




Week 14 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 316



         Underwrite a standard risk in long-term insurance

Week 15

The topics for this week are:
1. Medical: Neurology, mental, nervous and psychiatric
2. General: Diving – amateur and professional
3. Practical: 25 practical exercises

Learners should be prepared for this session based on their plan from the previous session.
Include your notes from your reading in the space that follows:

Medical topic           Neurology, mental, nervous and psychiatric
Reading consulted




Key points found




Questions arising




Week 15 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 317




General topic          Diving – amateur and professional
Reading consulted




Key points found




Questions arising




Practical cases

Make notes on your practical cases here:

Number of cases
completed              Practical cases:

                       Practical (real) cases:

Key lessons learnt




Difficulties
encountered



Questions arising




Week 15 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 318



Personal evaluation

Consider the following questions and assess your progress towards operating as a professional
underwriter. This exercise is for your own development and does not need to be shared with
others.

What have you done
over the past week to
protect the company?




What have you done
in order to give
excellent service to
your clients and build
good relationships
with them?




What else have you
done well over the
last week?




What are you
planning to do
differently over the
next week?




Week 15 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                         Page 319




Week 15 Medical Topic: Neurology, mental, nervous and psychiatric

Objective: By the end of this session the learner will be able to:
      Understand the anatomy and physiology of the central nervous system.
      Understand the various psychoses.
      Understand the treatment of psychiatric diseases.
      Understand the impact of psychiatric diseases on disability benefits.
      Understand the impact of diseases related to the nervous system on disability or
       accident benefits (i.e. epilepsy, stroke, transient ischaemic attacks, headaches, etc.).

Resource material for the learner to use:
      Your underwriting manuals.
      Medical manuals and dictionaries.

Questions to ask learners to check understanding:
      Discuss the various psychoses (i.e. schizophrenia, manic-depression, melancholia,
       paranoia, alcoholic psychosis, etc.).
      Discuss the infections of the nervous system (i.e. meningitis, encephalitis, poliomyelitis,
       etc.).

Learner’s notes:




Week 15 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 320




Week 15 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                      Page 321




Week 15 General Topic: Diving – amateur and professional

Objective: By the end of this session the learner will be able to:
          Identify different types of diving and the risks associated with diving.
          Understand the company’s diving questionnaire.
          Suggest ratings for different types of diver.

Resource material for the learner to use:
          Your occupational and avocational manuals.
          Your company’s diving underwriting questionnaire.

Questions to ask learners to check understanding:
          List at least three different types of diving.
          Identify the questions in the company’s diving questionnaire and explain why each
           question exists.
          Suggest death and disability ratings for the following:
                    o A naval trained diver working in coastal waters.
                    o A diver with 3 years experienced working on the laying of cables.
                    o A professional diving instructor.
                    o A recreational diver who dives to depths of 65m on a regular basis.

Learner’s notes:




Week 15 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 322




Week 15 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                  Page 323




Preparation for next session
The next session will cover:
1. Infectious and parasitic diseases
2. Racing
3. Progress against the next 25 practical cases that learners need to complete.

In order to prepare for the next session:
1. Consult your available manuals and company procedures in order to establish what reading
    is required. Make notes of the recommended reading in the space below.
2. Process and document the practical cases as part of your normal work routine.

Notes on reading resources
Possible reading source         Medical topic                   General topic
Underwriting manuals




Brackenridge or Merck




Medical dictionaries




Web-sites




Medical journals and
magazines



Company procedures




Company documents




Week 15 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                 Page 324



Possible reading source         Medical topic                    General topic
Other




Make notes on your reading in the space provided for the week.




Week 15 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 325



         Underwrite a standard risk in long-term insurance

Week 16

The topics for this week are:
1. Medical: Infectious and parasitic diseases
2. General: Racing
3. Practical: 25 practical exercises

Learners should be prepared for this session based on their plan from the previous session.
Include your notes from your reading in the space that follows:

Medical topic           Infectious and parasitic diseases
Reading consulted




Key points found




Questions arising




Week 16 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 326




General topic          Racing
Reading consulted




Key points found




Questions arising




Practical cases

Make notes on your practical cases here:

Number of cases
completed              Practical cases:

                       Practical (real) cases:

Key lessons learnt




Difficulties
encountered



Questions arising




Week 16 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 327



Personal evaluation

Consider the following questions and assess your progress towards operating as a professional
underwriter. This exercise is for your own development and does not need to be shared with
others.

What have you done
over the past week to
protect the company?




What have you done
in order to give
excellent service to
your clients and build
good relationships
with them?




What else have you
done well over the
last week?




What are you
planning to do
differently over the
next week?




Week 16 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 328




Week 16 Medical Topic: Infectious and parasitic diseases

Objective: By the end of this session the learner will be able to:
      Understand HIV-testing.
      Understand tropical diseases. (i.e. cholera, malaria, bilharzia, etc.)
      Understand venereal diseases. (i.e. gonorrhoea, syphilis, etc.)
      Understand parasitic diseases. (i.e. toxoplasmosis, hydatid disease, etc.)

Resource material for the learner to use:
      Your underwriting manuals
      Medical manuals and dictionaries

Questions to ask learners to check understanding:
      Explain the different HIV tests.
      Discuss the LOA protocol on HIV testing.
      Discuss your company's policy regarding the requirements that must be obtained when
       a venereal disease is mentioned.

Learner’s notes:




Week 16 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 329




Week 16 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                      Page 330




Week 16 General Topic: Racing

Objective: By the end of this session the learner will be able to:
          Identify different types of racing.
          Suggest death and disability loadings for each type of racing.

Resource material for the learner to use:
          Your occupational and avocational manuals.

Questions to ask learners to check understanding:
          Identify at least three broad categories of racing.
          Within each category suggest at least one “low risk” sub-category and one “high risk”
           sub-category.
          Suggest death and disability ratings for the following:
                   o An amateur racer of small yachts (inland waters).
                   o An amateur moto-cross racer (weekend racing).
                   o An avid cross-country dog-sled racer.
                   o A hot-air balloon racer.
                   o A 400m hurdles racer (amateur).
                   o An annual participant in the Argus Cycle tour (amateur bicycle race).
                   o A regular participant in cross country foot racing involving “extreme”
                        elements such as crossing mountains and rivers (e.g. orienteering).

Learner’s notes:




Week 16 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 331




Week 16 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                  Page 332




Preparation for next session
The next session will cover:
1. Habits, substance abuse and drug dependence
2. Cyclical industries
3. Progress against the next 28 practical cases that learners need to complete.

In order to prepare for the next session:
1. Consult your available manuals and company procedures in order to establish what reading
    is required. Make notes of the recommended reading in the space below.
2. Process and document the practical cases as part of your normal work routine.

Notes on reading resources
Possible reading source         Medical topic                   General topic
Underwriting manuals




Brackenridge or Merck




Medical dictionaries




Web-sites




Medical journals and
magazines



Company procedures




Company documents




Week 16 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                 Page 333



Possible reading source         Medical topic                    General topic
Other




Make notes on your reading in the space provided for the week.




Week 16 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 334



         Underwrite a standard risk in long-term insurance

Week 17

The topics for this week are:
1. Medical: Habits, substance abuse and drug dependence
2. General: Cyclical industries
3. Practical: 28 practical exercises

Learners should be prepared for this session based on their plan from the previous session.
Include your notes from your reading in the space that follows:

Medical topic           Habits, substance abuse and drug dependence
Reading consulted




Key points found




Questions arising




Week 17 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 335




General topic          Cyclical industries
Reading consulted




Key points found




Questions arising




Practical cases

Make notes on your practical cases here:

Number of cases
completed              Practical cases:

                       Practical (real) cases:

Key lessons learnt




Difficulties
encountered



Questions arising




Week 17 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 336



Personal evaluation

Consider the following questions and assess your progress towards operating as a professional
underwriter. This exercise is for your own development and does not need to be shared with
others.

What have you done
over the past week to
protect the company?




What have you done
in order to give
excellent service to
your clients and build
good relationships
with them?




What else have you
done well over the
last week?




What are you
planning to do
differently over the
next week?




Week 17 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                  Page 337




Week 17 Medical Topic: Habits, substance abuse and drug dependence

Objective: By the end of this session the learner will be able to:
      Understand the impact of substance abuse on the body.
      Understand the impact of substance abuse on the ability to work.
      Interpret liver function tests.

Resource material for the learner to use:
      Your underwriting manuals.
      Medical manuals and dictionaries.

Questions to ask learners to check understanding:
      Discuss the impact of smoking on general health.
      Discuss the impact of alcohol abuse on the body.
      Discuss the impact of drug dependence on the socio-economic environment.

Learner’s notes:




Week 17 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 338




Week 17 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 339




Week 17 General Topic: Cyclical industries

Objective: By the end of this session the learner will be able to:
          Identify cyclical industries.
          Explain why they may present problems for insurance.

Resource material for the learner to use:
          Your occupational and avocational manuals.

Questions to ask learners to check understanding:
          List at least three industries that are strongly cyclical.
          Suggest why they may present problems for life insurance.
          Suggest why they may present further problems for disability insurance.

Learner’s notes:




Week 17 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 340




Week 17 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                  Page 341




Preparation for next session
The next session will cover:
1. Transplants
2. Residence and travel considerations
3. Progress against the next 28 practical cases that learners need to complete.

In order to prepare for the next session:
1. Consult your available manuals and company procedures in order to establish what reading
    is required. Make notes of the recommended reading in the space below.
2. Process and document the practical cases as part of your normal work routine.

Notes on reading resources
Possible reading source         Medical topic                   General topic
Underwriting manuals




Brackenridge or Merck




Medical dictionaries




Web-sites




Medical journals and
magazines



Company procedures




Company documents




Week 17 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                 Page 342



Possible reading source         Medical topic                    General topic
Other




Make notes on your reading in the space provided for the week.




Week 17 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 343



         Underwrite a standard risk in long-term insurance

Week 18

The topics for this week are:
1. Medical: Transplants
2. General: Residence and travel considerations
3. Practical: 28 practical exercises

Learners should be prepared for this session based on their plan from the previous session.
Include your notes from your reading in the space that follows:

Medical topic           Transplants
Reading consulted




Key points found




Questions arising




Week 18 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 344




General topic          Residence and travel considerations
Reading consulted




Key points found




Questions arising




Practical cases

Make notes on your practical cases here:

Number of cases
completed              Practical cases:

                       Practical (real) cases:

Key lessons learnt




Difficulties
encountered



Questions arising




Week 18 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 345



Personal evaluation

Consider the following questions and assess your progress towards operating as a professional
underwriter. This exercise is for your own development and does not need to be shared with
others.

What have you done
over the past week to
protect the company?




What have you done
in order to give
excellent service to
your clients and build
good relationships
with them?




What else have you
done well over the
last week?




What are you
planning to do
differently over the
next week?




Week 18 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 346




Week 18 Medical Topic: Transplants

Objective: By the end of this session the learner will be able to:
      List different types of transplant and explain why the procedure might be deemed
       necessary.
      Suggest ratings for individuals who have undergone various types of transplant.

Resource material for the learner to use:
      Your underwriting manuals.
      Medical manuals and dictionaries.

Questions to ask learners to check understanding:
      Comment on the possible reasons for performing the following types of transplant:
            Bone marrow.
            Heart.
            Kidney.
            Liver.
            Lung.
            Pancreas.
      Indicate where you would find ratings for these cases in the underwriting manual(s) and
       show a rating for someone who received a kidney from a living relative 7 years ago.

Learner’s notes:




Week 18 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 347




Week 18 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                            Page 348




Week 18 General Topic: Residence and travel considerations

Objective: By the end of this session the learner will be able to:
          Explain the company’s practice and policy wording related to residence and travel for
           death and disability policies.
          Indicate the restrictions that might apply for residence and travel in different parts of
           the world in respect of benefits payable on death.
          Indicate the restrictions that might apply for residence and travel in different parts of
           the world in respect of benefits payable on disability.

Resource material for the learner to use:
          Any material on territorial ratings (possibly including underwriting manuals).
          Relevant procedure manuals, if available.
          Copies of policy wording.

Questions to ask learners to check understanding:
          Explain your company’s approach to rating death and disability policies in respect of
           persons who:
                  o Currently reside permanently in a foreign country.
                  o Intend to travel regularly (up to 3 months per annum) to a foreign country.
                  o Intend to reside temporarily (up to two years) in a foreign country within
                      the next four years.
          Consider how your answer might differ according to the country involved – consider
           countries on different continents, including at least one current “hot spot”.

Learner’s notes:




Week 18 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 349




Week 18 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                  Page 350




Preparation for next session
The next session will cover:
1. Review 3 (medical)
2. Micro-lenders
3. Progress against the next 30 practical cases that learners need to complete.

In order to prepare for the next session:
1. Consult your available manuals and company procedures in order to establish what reading
    is required. Make notes of the recommended reading in the space below.
2. Process and document the practical cases as part of your normal work routine.

Notes on reading resources
Possible reading source         Medical topic                   General topic
Underwriting manuals




Brackenridge or Merck




Medical dictionaries




Web-sites




Medical journals and
magazines



Company procedures




Company documents




Week 18 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                 Page 351



Possible reading source         Medical topic                    General topic
Other




Make notes on your reading in the space provided for the week.




Week 18 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 352



         Underwrite a standard risk in long-term insurance

Week 19

The topics for this week are:
1. Medical: Review 3
2. General: Micro-lenders
3. Practical: 30 practical exercises

Learners should be prepared for this session based on their plan from the previous session.
Include your notes from your reading in the space that follows:

Medical topic           Review 3
Reading consulted




Key points found




Questions arising




Week 19 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 353




General topic          Micro-lenders
Reading consulted




Key points found




Questions arising




Practical cases

Make notes on your practical cases here:

Number of cases
completed              Practical cases:

                       Practical (real) cases:

Key lessons learnt




Difficulties
encountered



Questions arising




Week 19 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 354



Personal evaluation

Consider the following questions and assess your progress towards operating as a professional
underwriter. This exercise is for your own development and does not need to be shared with
others.

What have you done
over the past week to
protect the company?




What have you done
in order to give
excellent service to
your clients and build
good relationships
with them?




What else have you
done well over the
last week?




What are you
planning to do
differently over the
next week?




Week 19 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                       Page 355




Week 19 Medical Topic: Review 3

Objective: By the end of this session the learner will be able to:
      Recall the various psychoses.
      Recall the treatment of psychiatric diseases.
      Recall the impact of psychiatric diseases on disability benefits.
      Recall the impact of diseases related to the nervous system on disability or accident
       benefits.
      Recall the policy regarding HIV-testing.
      Recall the tropical diseases.
      Recall the venereal diseases.
      Recall the parasitic diseases.
      Recall the impact of substance abuse on the body.
      Recall the impact of substance abuse on the ability to work.
      Recall how to interpret liver function tests.

Resource material for the learner to use:
      Your underwriting manuals.
      Medical manuals and dictionaries.

Questions to ask learners to check understanding:
      Name the various psychoses.
      Name the infections of the nervous system.
      Discuss the LOA protocol on HIV testing.
      Discuss the impact of smoking on general health.
      Discuss the impact of alcohol abuse on the body.
      Discuss the impact of drug dependence on the socio-economic environment.

Learner’s notes:




Week 19 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 356




Week 19 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                      Page 357




Week 19 General Topic: Micro-lenders

Objective: By the end of this session the learner will be able to:
          Identify any special risks associated with micro-lenders.
          Suggest a rating for micro-lenders.

Resource material for the learner to use:
          Your occupational and avocational manuals.
          Internal practice notes (note: micro-lenders may not feature in international
           underwriting manuals and learners may need to rely on local practice notes).

Questions to ask learners to check understanding:
          Identify any special risks associated with micro-lenders.
          Suggest, with reasons, death and disability ratings for micro-lenders.
          Compare these ratings with those for pawnbrokers given in your underwriting
           manual(s) and suggest reasons for the difference.

Learner’s notes:




Week 19 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 358




Week 19 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                  Page 359




Preparation for next session
The next session will cover:
1. Summary review (medical)
2. Review (general)
3. Progress against the next 30 practical cases that learners need to complete.

In order to prepare for the next session:
1. Consult your available manuals and company procedures in order to establish what reading
    is required. Make notes of the recommended reading in the space below.
2. Process and document the practical cases as part of your normal work routine.

Notes on reading resources
Possible reading source         Medical topic                   General topic
Underwriting manuals




Brackenridge or Merck




Medical dictionaries




Web-sites




Medical journals and
magazines



Company procedures




Company documents




Week 19 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                 Page 360



Possible reading source         Medical topic                    General topic
Other




Make notes on your reading in the space provided for the week.




Week 19 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                     Page 361



         Underwrite a standard risk in long-term insurance

Week 20

The topics for this week are:
1. Medical: Summary review
2. General: Review
3. Practical: 30 practical exercises

Learners should be prepared for this session based on their plan from the previous session.
Include your notes from your reading in the space that follows:

Medical topic           Summary review
Reading consulted




Key points found




Questions arising




Week 20 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 362




General topic          Review
Reading consulted




Key points found




Questions arising




Practical cases

Make notes on your practical cases here:

Number of cases
completed              Practical cases:

                       Practical (real) cases:

Key lessons learnt




Difficulties
encountered



Questions arising




Week 20 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                                    Page 363



Personal evaluation

Consider the following questions and assess your progress towards operating as a professional
underwriter. This exercise is for your own development and does not need to be shared with
others.

What have you done
over the past week to
protect the company?




What have you done
in order to give
excellent service to
your clients and build
good relationships
with them?




What else have you
done well over the
last week?




What are you
planning to do
differently over the
next week?




Week 20 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 364




Week 20 Medical Topic: Summary review

Objective: By the end of this session the learner will be able to:
      Recall all medical topics covered over the 20 weeks.

Resource material for the learner to use:
      Your underwriting manuals.
      Medical manuals and dictionaries.
      Previous notes.

Questions to ask learners to check understanding:
      Draw questions from previous sessions.

Learner’s notes:




Week 20 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 365




Week 20 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 366




Week 20 General Topic: Review

Objective: By the end of this session the learner will be able to:
          Recall all non-medical topics covered over the 20 weeks.

Resource material for the learner to use:
          Your occupational and avocational manuals.
          Previous notes.

Questions to ask learners to check understanding:
          Draw questions from previous sessions.

Learner’s notes:




Week 20 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits
                                                                        Page 367




Week 20 module
Module: Underwrite a standard risk in long-term insurance (No. 14433)
Level 4, 40 Credits

				
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