Learner Study Guide
Arrange and cancel insurance for
(Unit standard No 7336)
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Table of Contents
3 Specific Outcome 1
7 Specific Outcome 2
9 Specific Outcome 3
13 Specific Outcome 4
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Welcome Welcome to this learning intervention, which is aligned to unit
standard 7336 that deals with the arranging and cancelling of
insurance for bank-financed vehicles.
This learning intervention can form part of a Level 4 Skills
Programme, which will enable you to meet the minimum
requirements of Column Four (Conditions/Restrictions) of the
Determination of Fit and Proper Requirements for Financial
Services Provider (2002), in order to be “fit and proper” in
terms of the Financial Advisory and Intermediary Services Act
37 of 2002.
Purpose of this This learning intervention will provide you with the knowledge
learning and skills required to:
? Arrange comprehensive Motor cover.
? Arrange motor top up cover.
? Arrange personal catastrophe cover.
? Cancel insurance cover.
Please note that Top Up Cover is dealt with in a generic
manner, even though it may not be applicable to your
organisation and you are required to have an understanding
of the content in order to complete the assessment.
Learner’s roles You are required to:
responsibilities ? Work through this self-study guide.
? Take responsibility for your own learning.
? Ask for guidance and support when required.
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Unit standard The overall outcomes and specific outcomes of this learning
intervention are aligned with registered Unit Standard 7336.
This means that if you are able to demonstrate competence in
the learning outcomes, which are aligned to the specific
outcomes of the unit standard, you will qualify for credits,
which will contribute towards the 120 credits required for a
national certificate at Level 4.
For further details regarding the process for obtaining the
National Certificate at Level 4, please contact your Human
Resources Department or the Skills Development Facilitator
within your organisation.
Assessment In order to obtain the eight credits for unit standard 7336, you
are required to work through this self-study guide and provide
evidence of your competence against the unit standard. If you
are unable to demonstrate competence, you will not obtain any
credits for the unit standard.
The assessment can be conducted at your workplace. A
qualified assessor or your line manager will conduct the
assessment and will provide you with the necessary information
about how the assessment will be conducted.
Enjoy Now you may begin with the actual content of this learning
material. Everything of the best in your studies.
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1. Specific Outcome 1: Arrange comprehensive cover
Assessment All vehicle related details are obtained for the insurance
criteria 1.1 company as per their agreement.
When quoting or providing comprehensive cover for a motor
vehicle the underwriter from the insurance company needs to
Vehicle gather sufficient information about the car, you the client and
related the car’s situation so that they are able to assess the risk
details attached to this vehicle. The premium will be based on this
assessment of risk.
The Insurer may require all or most details about the vehicle
and such details could include:
? The make – is it a Toyota or BMW?
? The model – station wagon, sedan, coupe or cabriolet
? The year of manufacture – the year and the make and
model are used to value the car.
? Retail value and or market value of the vehicle – this
requirement is specific to the underwriter
? Value of improvements and accessories
? Car registration number
? Chassis number or VIN
? Engine number
? Registered Owner – (insurers will need detail, as below,
of the regular driver of the vehicle to prepare the
o ID number
o Residential Address
o Occupation of driver
o History of claims
o Drivers license
o Who else will be driving the vehicle
o Proof of ownership – sale agreement and
? What is the car used for – business, professional,
personal/private or taxi use? – again this will affect
the risks attached to this vehicle.
? Accessories in the car – these may or may not be
covered under the standard policy (dependant on the
specific policy) and might have to be insured under an
all risk policy or some policy wordings may require that
these items be specified:
o Radio Tape CD – in car or in boot
o Car phone
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Vehicle ? Security of the vehicle, namely– (this can result in related lower or higher premiums):
details cont. o VESA approved gear lock
o Satellite Tracking device – the discount for this
will often offset the cost of the device and
o VESA approved Car Alarm or Imobiliser
o Where is the car kept at night – locked garage,
in enclosed premises, in yard or in the street –
naturally the more secure the better the
o Guarded suburb
o Geographic location – certain areas will be more
expensive than others due to levels of crime
while some areas may not be insurable
To prepare an accurate quotation all information must be
supplied at quotation stage. While all this information may
not be required to get a quote it will be necessary if the client
decides to take the cover.
The insurance company will also require copies of certain
Document documents to prove the information stated above is correct
requirements and that regulations and requirements of FICA are met. This
could include but may not be limited to:
? Copy of Identity Document
? Copy of drivers license
? Copy of utility bill – Municipal, Telephone or income
Tax – to prove residential address
? Copy of Sale Agreement and Finance Agreement
? Proof of bank details for debit order – cancelled cheque
? Copy of previous insurance policy - optional
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Assessment The premium quote is obtained and communicated to
criteria 1.2 the customer in accordance with company specific
Premium The quote can be prepared on one of the computerized Quote systems or will be calculated by the insurance company. It is
important to remember that both methods will result in a
quotation that is based on the information provided to the
company or system.
If you do not include a required type of cover or protection
this will reduce the quotation (costs that the client has to
pay), however, this cover or protection will then not be
included in the policy that the client takes out. In insurance it
is generally considered that “you get what you pay for”, so if
you don’t include it, the client doesn’t pay for it and ultimately
doesn’t have this cover or protection.
A cheaper quote may be cheaper as a result of an important
type of cover that provides for required protection has been
Once you have the quote you would need to communicate the
amount of the premium as well as the cover the client has Communi-purchased for that premium to the client. Remember this cating the explanation must be in simple language so as to avoid premium financial or insurance jargon that the client may get confused
quote or unsure of.
It is your responsibility to ensure that:
1. You understand what the client’s situation and needs
are, and to include solutions to these needs or
concerns in the quote.
2. The client understands what the benefits, conditions
and exclusions are of the policy/product they are
3. The client understands how these policies/products
work and what they need to do when claiming.
4. Enable the client to make an informed decision about
their insurance needs.
5. You implement the policy/product they need, can
afford and have agreed to.
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Assessment Cover is arranged and the necessary entries generated
criteria 1.3 in accordance with company specific requirements on
receipts of the customers instruction.
Arranging Cover is arranged by completing the required application
cover forms and providing the company with documentary proof
of certain information in the application. This information is
required for underwriting information as well as for
Documentation These could include the following documents:
? Valuation certificates for jewellery
? Serial numbers of electronic equipment
? Proof of ownership – invoices etc
? Copy of ID document
? Copy of drivers license
? Copy of vehicle registration certificate
? Copy of immobilizer certificate
? Copy of vesa level 4 alarm system certificate
? Copy of gear lock certificate
? Copy of satellite tracking system – vehicles over a
specified limit, e.g. R150 000 (Note: Not all insurers
require a tracking system for vehicles over R150
000. Remember that you would need to confirm this
with regards to the specific policy/product you are
This would also contain the voluntary excess and the
compulsory excess. Some people will increase the
voluntary excess to reduce the premiums.
REMEMBER: The sum being insured is dependant on the underwriter
whose product is being sold and you should investigate the
specific requirements of that policy/product when arranging
cover or protection and preparing the documentation.
Certain underwriters may also require a "tracking device"
and, as per the specific requirements, you would need to
ascertain what the specific underwriters' requirements are.
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2. Specific Outcome 2: Arrange top up cover
Overview Since many people raise car finance for business purposes and
therefore, interest expenses will be an allowable business
deduction, they want to ensure that the interest payments are
kept as high as possible for the entire term of the loan as this
will result in a larger tax deduction. This results in many deals
being structured with lower capital repayments during the life
of the policy and there being balloon payments at the end of
the term of the policy.
As a result, if the car is written off or stolen the amount owing
on the loan may be more than the value of the insurance
which is based on the cars valuation. This can result in there
being a short fall that the client must still pay to the finance
The insurance companies have developed various top up plans
to insure this short fall and this amount is then paid out on the
complete loss of the vehicle and there being a shortfall.
Assessment Details of the value of the vehicle and use is obtained
Criteria 2.1 from the customer in accordance with the insurance
Criteria Range Use relates to business or personal, taxi.
Details of the As the use of the motor vehicle will affect the following: value and use
of the vehicle ? Only business use will usually result in this type of
? The reduction in value of the vehicle due to wear and
Naturally a taxi or company owned vehicle will be at more risk
and subject to greater wear and tear.
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Assessment The benefits of the cover are explained to the customer
Criteria 2.2 in accordance with the product requirements.
Benefits of The benefits of the cover are that the customer/client can the cover finance a vehicle to repay mainly the interest and very little
capital as this may be a tax advantage to the client and be
assured that there is sufficient cover to pay off this full
amount in the event of the total loss of the asset due to an
accident, theft or other event that falls within the policy/cover
requirements in terms of claiming.
Assessment A quote is obtained and communicated to the customer
Criteria 2.3 in accordance with company specific requirements.
Obtaining a A quote would need to be obtained for an extra amount of quote cover and this must be communicated to the customer/client
in writing and verbally. The adviser must also ensure that the
customer/client understands the implications and risks of not
having this cover and the costs and requirements of adding
this cover to the plan.
Informed It is important that the client is placed in a position to make
decision an informed decision in this matter.
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