Unit of competency Outline

Date retreived
22/07/2026 3:38 PM AWST

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Determine and manage risk exposure strategies

Determine and manage risk exposure strategies

Unit of competency
National Code
FNSRSK602A
State Code
D4314
TGA Status
Replaced
DTWD Status
Replaced
Current Release Number
1.00
Current Release Date
24/11/2010
View on TGA
State Implementation and Classification
Approved Date
31/07/2014
Field of Education
080399 - Business And Management, N.e.c.
Original Release Date
31/07/2014
Nominal Hours
50
Description
This unit describes the performance outcomes, skills and knowledge required to analyse risk factors for financial investment and insurance products, determine appropriate risk exposure management strategies and communicate these to relevant staff and intermediaries and personally manage the risk assessment strategies. It is aimed at setting the strategy for portfolio managers, including what types of business will be targeted and not targeted.This unit may apply to job roles subject to licensing, legislative, regulatory or certification requirements so Commonwealth, State or Territory requirements should be confirmed with the relevant body.
Notes
Elements and Performance Criteria
1. Determine appropriate risk assessment strategies
  • 1.1. Appropriate criteria for acceptance or rejection of risks are identified and evaluated
  • 1.2. Performance targets for the organisation's capacity to assess and accept risk are determined
  • 1.3. Organisation's business risk elements and control risk elements are identified
2. Evaluate risk and compliance factors
  • 2.1. Accurate, reliable and up-to-date information on these elements is identified and collated in a form suitable for analysis with relevant data accessed and comprehensively investigated and reviewed
  • 2.2. Risk elements are evaluated against known exposure factors and compliance with relevant legislation and organisation policy is considered
  • 2.3. Risk acceptability factors are evaluated within the context of organisation's mitigating capabilities
  • 2.4. Risk acceptability factors are evaluated within the context of organisation requirements
3. Establish risk acceptance criteria
  • 3.1. Terms and conditions of risk acceptance criteria for low hazard risk areas are established that meet market conditions and are within organisation accepted levels of exposure
  • 3.2. Terms and conditions of risk acceptance for high hazard risk areas are established that meet market conditions and are within organisation accepted levels of exposure
  • 3.3. Risk acceptance strategies, criteria and guidelines are clearly documented, and meet the requirements of relevant guidelines and are determined within delegated authorities
  • 3.4. Relevant feedback is obtained and reviewed and the risk acceptance criteria, and associated authority limitations, conditions and guidelines finalised
4. Develop risk management strategies
  • 4.1. Risk management for each risk is selected and an implementation plan developed
  • 4.2. Procedures that staff should follow in operationalising strategy are identified and developed
5. Implement risk assessment strategies
  • 5.1. Risk assessment strategies, criteria and guidelines are communicated to relevant staff and intermediaries
  • 5.2. Risk acceptance strategy implementation is monitored
6. Evaluate and review risk assessment strategies
  • 6.1. Risk assessment strategies are evaluated to determine effectiveness in achieving risk management objectives and reviewed as required
  • 6.2. Results are documented and communicated to relevant staff
RANGE STATEMENT
The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.
Business risk elements may include:
adequacy of capital
credit risk
earnings
insurance underwriting risk
liquidity
litigation and other legal risk
market efficiency
market risk
nature of business
operational risk
proper markets
quality of strategy
sources of business and distribution mechanisms
type of customer, user or member
types of products and services.
Control risk elements may include:
allocation and definition of management responsibilities
business continuity
clarity of legal ownership structure
compliance
corporate governance
cultural issues and business ethics
financial and regulatory reporting and accounting policies
human resources
IT systems
internal audit
jurisdictions and characteristics of controllers or group entities
management information
outsourcing to third party providers
policies, procedures and controls
professional advisers
relationship with the rest of the group
risk management
treatment of customers or users.
Sources of information may include:
actuaries
brokers
clients
financiers
intermediaries
lawyers and solicitors
managers or supervisors
marketing and sales personnel
medical practitioners
product developers
reinsurers
underwriters.
Risk is:
a term used to designate a peril against an insured or against uncertainty of a financial loss.
Risk acceptability factors vary according to:
potential impact on the organisation
value and type of product or portfolio.
Risk acceptance criteria refers to:
criteria against which a risk may be measured for acceptability.
Risk management is:
a procedure to minimise the adverse effects of a possible financial loss by identifying potential sources of loss
measuring the financial consequences and likelihood of a loss occurring
using controls to minimise actual losses or their financial consequences.
EVIDENCE GUIDE
The Evidence Guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.

Overview of assessment

Critical aspects for assessment and evidence required to demonstrate competency in this unit
Evidence of the ability to:
interpret and apply organisation policy and procedures and comply with legislation, regulations and industry codes of practice
effectively analyse, determine and manage financial risk exposure strategies.

Context of and specific resources for assessment
Assessment must ensure:
competency is demonstrated in the context of the financial services work environment and conditions specified in the range statement either in a relevant workplace or a closely simulated work environment
access to and the use of a range of common office equipment, technology, software and consumables
access to organisation and industry risk management documentation and information.

Method of assessment
A range of assessment methods should be used to assess practical skills and knowledge. The following examples, in combination, are appropriate for this unit:
evaluating an integrated activity which combines the elements of competency for the unit or a cluster of related units of competency
verbal or written questioning on underpinning knowledge and skills
setting and reviewing business simulations or scenarios
evaluating samples of work
accessing and validating third party reports.

Guidance information for assessment
Replaces
State Code National Code Title Type
C9919 FNSRISK602B Determine and manage risk exposure strategies Unit of competency
Replaced By
State Code National Code Title Type
AUS93 FNSRSK602 Determine and manage risk exposure strategies Unit of competency