CH4-Service Customers - Products and Services

Question 1

What are six examples of deposit products available to consumers?

Answer 1

1) Transaction accounts
2) Savings accounts
3) Basic bank account for low income or disadvantage customers
4) Deeming accounts for pensioners or retired people
5) Youth and student accounts
6) Farm management deposit account

Question 2

Products and services @ the NAB -

Answer 2

1) Fair and ethical outcomes are at the heart of our plans, decision and actions
2) We listen deeply, understand and empathise to get it right for the customers every single time
3) We step in and speak up where we see issues, learning and growing together
4) We supportively manage customers’ expectations, saying no when necessary (even when it’s hard) and empowering customer to get to a ‘yes’ that is right for them.
5) We take ownership of our customers’ requests and follow up until each is resolved

Question 3

What are seven payment methods in common use?

Answer 3

1) Cash
2) Cheques
3) Debit cards
4) Credit cards
5) Automated payments
6) Internet banking
7) Payment innovations such as digital wallets

Question 4

How many days prior to the policy renewal date must an insurer tell the policy holder whether it is prepared to renew the contract?
a) 14
b) 28
c) 10
d) 21

Answer 4

a) 14

Question 5

__________________ policies combine a pure term insurance component with a savings element.

a) Life insurance
b) Endowment insurance
c) Income protection insurance
d) Insurance bonds

Answer 5

b) Endowment insurance

Question 6

Which of the following is NOT a feature of a term deposit?

a) Based on a single amount being lodged over a specified term
b) The account will tend to pay a higher rate of interest with a limited number of withdrawals
c) The amount invested will influence the interest rate with high deposits attracting higher rates
d) Terms offered generally range from 1 to 60 months

Answer 6

b) The account will tend to pay a higher rate of interest with a limited number of withdrawals

Question 7

What are the two main types of general insurance policies?

a) Building and Contents
b) Life and Trauma
c) Indemnity and Replacement Value
d) Commercial and Business

Answer 7

c) Indemnity and Replacement Value

Question 8

Insurance businesses are regulated under:

a) Australian Prudential Regulation Authority (APRA) Act 1973
b) Basel Committee on Banking Supervision (BCBS)
c) Australian Securities and Investment Commission (ASIC)
d) Reserve Bank of Australia (RBA) Act 1959

Answer 8

a) Australian Prudential Regulation Authority (APRA) Act 1973

Question 9

What is insurance underwriting?

a) the process of balancing accounting books at the end of the financial year
b) the process by which an insurer determines whether or not, and what basis, to accept a particular risk
c) the process of selling insurance products to customers
d) the process of evaluating how much to insure a customer for to ensure the insurance pool remains liquid

Answer 9

b) the process by which an insurer determines whether or not, and what basis, to accept a particular risk

Underwriting is the process of determining the risk associated with

Question 10

What are the two categories of insurance?

Answer 10

1) Life insurance
2) General insurance

Question 11

An insurance contract generally contains what five key items?

Answer 11

1) Schedule stating the name and contact details of policy holder, nature of the insurance and other relevant details
2) Details of inclusions and exclusions along with any conditions to minimise loss, notification requirements and time frames for various activities such as submitting a claim.
3) Sum insured and the basis for cover (agreed value, market value, etc)
4) Premium plus any excesses
5) In event of claim the amount paid out, any limits, etc

Question 12

What is “Utmost good faith?”

Answer 12

Utmost good faith means that all parties to the insurance policy must be open and honest regarding the risk to be covered, and to act honestly throughout the duration of the policy.

Question 13

What are the two types of general insurance?

Answer 13

1) Indemnity policies - Compensating an individual for financial loss ensuring that the policy owner does not profit and receive an amount in excess of the amount of the loss suffered.
2) Replacement value policies - Sum insured and the premium are increased annually.

Question 14

In the context of insurance what does coinsurance and averaging provisions mean?

Answer 14

Coinsurance or averaging provisions is to discourage underinsurance as a technique to reduce premiums.
Generally applies to policies where less than 80% of the property value is insured.
This allows the insurer to pay only the proportion for which the policy owner paid.

Question 15

What are examples of domestic insurance policies?

Answer 15

• Home and building insurance
• Building insurance
• Contents insurance
• Lenders security
• Insurance package

Question 16

Commercial insurance are used by business operators. There are a range of insurances to cater for the varying nature of businesses. What are some common types?

Answer 16

Fire, water damage, malicious acts, storm, etc
Business interruption, equipment breakdown, glass breakage.

Question 17

What is liability insurance and what are some examples?

Answer 17

Protect individuals and businesses against liabilities which may be created by common law, statute law or contract law.
Examples are public liability, product liability and professional indemnity.

Question 18

What role does APRA have in the insurance industry? What is ASIC’s role, if any?

Answer 18

APRA regulates the insurance under the Insurance Act 1973 (Cth) by requiring:
- APRA approval to carry on an insurance business
- Comply with regulations
- Report regulatory breaches
ASIC is responsible for licensing of financial services providers

Question 19

What is the general Insurance Trend?

Answer 19

Situation is deteriorating or worsening due to increasing number of trauma and critical illness.