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10/12 W01/March 2017 Award in General Insurance

Question answers

10.1 Risk management is the process of identifying, assessing, measuring, monitoring, controlling and mitigating
risks. Risk management provides a link between the ongoing operational management of risk and longer-term
business goals and strategies.
Appropriate risk management policies should be set by each insurer according to the nature, scale and
complexity of its business. For instance, risk management processes being developed today increasingly use
internal models and sophisticated risk metrics to translate risk identification into management actions and
capital needs. Such an approach typically adopts a total balance sheet approach where the impact of the total
material risks is fully recognised on an economic basis. A total balance sheet approach reflects the
interdependence between assets, liabilities, capital requirements and capital resources, and identifies a capital
allocation, where needed, to protect the insurer and its policyholders and to optimise capital returns to the
insurer.

10.2 The essential stages involved in a customer complaints procedure are:
• Complaints should be reported immediately to the complaints department of the product provider.
• Full details of the complaint and the source should be logged.
• A prompt written response should be made to the complainant.
• A full internal investigation into the complaint should be conducted immediately by the product provider.
• The firm’s decision remedy or offer should be sent to the complainant without delay.
• Dissatisfied complainants should be advised if they have the right to pursue their grievance with another
external body. Reference copy for CII Face to Face Training

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Chapter