One of the interesting things about being reasonably competent is that an accepted test of that state of being is to ask what the majority of peer practitioners would have done in the same situation.
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One of the interesting things about being reasonably competent is that an accepted test of that state of being is to ask what the majority of peer practitioners would have done in the same situation.

So, this month's MOT test does just that. The following text is a description of how a broker dealt with a customer's insurance needs.

What you have to do is to study the text and identify the following:
1) Inconsistencies: things that do not appear right to you (such as something the client says)
2) Errors: mistakes made by the practitioner
3) Regulatory breaches: based on GISC rules and codes.

Having identified each, make a note of:

  • what you think is wrong and
  • what you think the correct situation, fact or behaviour should be.

    "John was a very proud young man.

    Having spent a year in the insurance industry, he had just passed his CII FIT test and thus being qualified as competent to advise clients (and use the letters "FIT" on his

    calling card) his supervisor had allowed him a day release from the household call centre to see if he could sell a shopkeeper's policy to a local antique dealer who had asked for a quote.

    John was not too sure about commercial business, but as he was meant to be going with someone from the insurance company, the director of the broking firm he worked for who was responsible for business insurance felt that this would be good experience.

    As it turned out, the insurance company rep could not make the appointment, but John did have the rating manual so he was pretty confident he could muddle through.

    As it turned out, the antique dealer was more of a jeweller and this made life much easier for John, not having to describe lots of different types of items - he could basically lump everything under one stock item without any real need for a list. He was conscious that he should make sure that he knew about the maximum value of any one item and the owner, Bill, told him that the maximum retail value of any item was £2,500.

    John's firm had a binding authority up to £50,000 stock value at any one premises.

    Bill's stock added up to about £60,000 .

    John pointed out that at that level of stock he would have to refer the matter to the underwriters so it might be better for him to insure for a little less than £50,000 as the insurers would only want him to install more expensive security if they knew the true value.

    Bill was grateful for the advice, but mentioned to John that he had heard that if one does not insure for the full amount the insurer might reduce a claim if it occurred.

    John was very bullish on this one as this was a question that had come up in his assessments and he was confident that this was probably one that he did not get wrong.

    "No problem" chirped John, "all jewellery is insured on an agreed value basis so if that is the amount you state, that is what the insurer accepts."

    Bill was reasonably convinced by the confidence that John displayed, but in the back of his mind had some recollection of an article in the national press which said that all insurance was subject to something referred to as "average".

    As Bill had no cover in place, he was very keen to effect cover and John assured him that if he had a completed proposal, he could grant cover as soon as he returned to the office. Although the business did not quite seem to fit the rating manual, (money carryings were particularly high and John had never really dealt with security precautions before so was not sure about the standard of the locks), it was agreed that the package seemed reasonably suitable and Bill agreed to complete the proposal on the basis of a quotation of £1,000 + a service charge of £100 for the on site visit.

    Completing the proposal form was quite straightforward and Bill seemed to be quite experienced, having been an antique dealer for more than 30 years. Added to this, Bill seemed somewhat conscious about time so John did not annoy him with explanations or bombard him with any other literature than the two-sided prospectus that he and his boss had prepared as a resume of cover.

    Bill did point out that, while he had never had insurance on his business before, he had suffered quite a number of small shop-lifting losses of under £100, but they agreed that as there was no claim made these were not material.

    Bill also mentioned that he had had two serious household burglary claims, one involving armed intruders, but John advised that household claims of a business owner are not material to a business insurance underwriter either.

    John was delighted with his first `commercial business' transaction and returned to the office with £1,100 in cash stuffed in his back pocket.

    His boss was not around for the rest of the day and as it was getting late he could not raise anyone at the insurer, so, recognising the need to put the client's interests first, he borrowed the binder cover-note book from his boss's office and confirmed cover to the antique dealer that evening, catching the 7pm post.

    What was even better was that he found he had over-quoted by just over £100. As the client had accepted the figure of £1,100 in total this meant that a contract for services had been agreed and there would be an additional sum going to his earnings target."

  • So, there we have it. Have fun and try to treat this as written exercise so that you can record the results on you individual learning file when we publish some suggested answers next week.

    I know that many readers circulate these MOT assessments to staff and if you are a supervisor or training manager, you might enjoy adding to your own personal development by judging which member of staff has given the best responses overall and why.If you want more of the same, this is just one example of the type of assessment that will be appearing in Broker Assess which is launched today by CII and Biba.

    For more information contact brokerASSESS@cii.co.uk.

    To download a PDF of this article as it appears in the magazine click here .