Associate Banking Diploma — Option Subject Insurance (Financial Services)
Objective In the wider context of financial services, to provide candidates with an understanding of: - the concept of risk; - the development and role of the insurance ‘industry’; - the various classes of insurance and types of provider; and - the legislative environment.
SYLLABUS
1. Scope and Purpose of Insurance
	1.1	The place and role of insurance within the financial framework, and in relation to other financial institutions.
	1.2	Principles of risk and risk management. The need for insurance: - property - personal and commercial; - family - protection, savings and investment; - liability - individual, company and legal; - human resources - pensions, key person cover.
	1.3	Classes of insurance: private and state insurance. Compulsory insurance cover. The impact of consumerism.
	1.4	The Tanzania insurance market: NIC; insurance companies; brokers and other intermediaries; insurance associations. The impact of regulation and deregulation; bancassurance; direct writing.
	1.5	The international insurance market: globalization; harmonisation; convergence.
2. Insurance contracts
	2.1	Legal principles of contracts: insurance contracts: uberrimae fidei (utmost good faith); conditional contracts; warranties; indemnity; subrogation; contribution.
	2.2	Insurable interest; proximate cause.
	2.3	Insurance documentation: proposal forms; policies; certificates of insurance; renewal procedures.
	2.4	Claims: averaging; loss adjusters; insurance ombudsman; arbitration.
	2.5	Risk assessment: rating and underwiritng. The impact of competition on pricing; the impact of legislation.
	2.6	Claims reserving for different classes of business; asset/liability management; portfolio investment; costs and cost allocation.
3. Classes of Insurance
	3.1	Life: term assurance and decreasing term assurance; whole life assurance; endowment assurance; unit-linked assurance.
	3.2	Premium calculations: policy premiums; paid up; surrender values; loan values.
	3.3	Use of policies for protection/investment; mortgage protection; mortgages and assignment of life policies; mortgage repayment vehicles.
	3.4	Other investments: unit trusts; investment trusts; personal equity plans; TESSAs; National Savings.
	3.5	Personal insurances: personal accident; personal liability; permanent health insurance; unemployment; travel; legal expenses.
	3.6	Pensions: annuities; benefits and contributions; individual and self-employment pension contracts; group pensions; taxation treatment of pensions.
	3.7	Household: buildings cover; contents cover; all risks cover and other extensions of policies.
	3.8	Mortgage related insurances: Building policies. Mortgage indemnity insurance (MIG); definition; recent developments in how insurers have applied policy terms; comparison between the terms and conditions of MIG contracts up to 1992 and those arranged since; the effect on lenders of new policy arrangements.
	3.9	Motor insurance: statutory requirements; types of cover; rating.
	3.10	Commercial insurance: property; business interruption; liability.
4. Authorisation and Regulation of Intermediaries
	4.1	Bank and Financial Institutions Act 1991.
	4.2	Insurance Commission Board; polarisation; self-regulatory organisations; Personal Investment Authority.
THE EXAMINATION Time Allowed: Three hours. Examination Format: This paper consists of eight questions, five of which must be attempted. Each question carries 20 marks. RECOMMENDED READING CIB/Bankers Books Insurance Study Text. S R Diacon & R L Carter, Success in Insurance (John Murray). J Stewart, Introduction to Insurance (CIB/Bankers Books).