IFMP – Stock Brokers' Certification
Bancassurance
Certification
Study and Reference Guide Outline
January 2018
Institute of Financial Markets of Pakistan © 2018
Study and Reference Guide Outline
Copyright © 2018
Institute of Financial Markets of Pakistan
Karachi, Pakistan
All rights reserved
This is document is for educational purposes only and the Institute of Financial Markets of
Pakistan (IFMP) accepts no responsibility for persons undertaking trading or investments in
whatever form.
While every effort has been made to ensure its accuracy, no responsibility for loss occasioned
to any person acting or refraining from actions as a result of any material in this publication can
be accepted by the IFMP or its members.
IFMP has prepared its study guides with the best intent for educational reference purposes only
and the documents shall not be considered as an ultimate authority on the subject or to pass
the IFMP qualifications. Readers are encouraged to study additional relevant material and as
recommended by IFMP.
The IFMP's training materials are solely for the purpose of referencing and the matter provided
may not be taken as any empirical theory on the subject which is dynamic and evolving with
latest research and developments. While some of the content has been taken from third-party
sources, their efforts and work on the topic are highly acknowledged.
For any comments, suggestions and information, you may reach IFMP at info@ifmp.org.pk
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OBJECTIVE OF THE EXAMINATION
The objective of this course is to equip the trainee with the knowledge and skills which enables
them to distribute/sell insurance products efficiently and effectively.
TARGET AUDIENCE
This Exam will be mandated for sale staff of banks selling/ distributing Insurance Products
through Bancassurance Channel.
SYLLABUS STRUCTURE
The curriculum is divided into elements and these are broken down into a series of learning
objectives. Each learning objective begins with one of the following prefixes: know, understand, be
able to calculate and be able to apply. These words indicate the different levels of skill to be
tested. Learning objectives prefixed:
Know require the candidate to recall information such as facts, rules and principles
Understand require the candidate to demonstrate comprehension of an issue, fact, rule or
principle
Be able to calculate require the candidate to be able to use formulae to perform
calculations
Be able to apply require the candidate to be able to apply their knowledge to a given set of
circumstances in order to present a clear and detailed explanation of a situation, rule or
principle
Element Element description Questions
1 Introduction to Bancassurance Sector 10
2 Life Insurance Products and their Mechanisms 20
3 General Insurance Products and their Mechanisms 20
4 Risk Management 10
5 Identification of Clients’ Insurance Needs 20
6 Ethics and Regulatory Framework 20
Total 100
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COURSE SUMMARY
Element 1: Introduction to Bancassurance Sector
Financial Industry Participants
Understand concept of insurance
Distribution channels used for financial and insurance services
Role of bancassurers and insurance companies and their respective responsibilities
Element 2: Life Insurance Products and their Mechanisms
Term Insurance
o Types of Term Policies
o Level Term: Decreasing Term: Renewable Term: Convertible Term
o Advantages and Uses of Term Insurance
o Disadvantages of Term Insurance
Whole Life Insurance
o Characteristics of All Whole Life Policies
o Level Premiums
o Level Face Amount
o Non forfeiture Value
o Types of Whole Life Policies
o Continuous Premium
o Limited-Payment Whole Life
o Single Premium Whole Life
o Current Assumption Whole Life
o Advantages and Uses of Whole Life Insurance
o Disadvantages of Whole Life Insurance
Flexible Policies
o Characteristics of Flexible Policies
o Types of Flexible Policies
o Adjustable Life Insurance
o Universal Life
o Variable Life
o Advantages and Uses of Flexible Policies
o Disadvantages of Flexible Policies
Endowment Insurance
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o Endowments
o Types of Endowments
o Specialized Insurances
o The Family Policy (Family Protection Policy)
o Retirement Income
o Joint Life Policies
o Juvenile Policies
o Index-Linked Policies
Riders
o Introduction
o Types of Riders
o Additional Benefit Riders
o Accelerated Benefit Riders
o Additional Term Life
o Accidental Death
o Accidental Death & Dismemberment
o Family Income
o Dread Disease
o Waiver of Premium
o Payer Rider
o Guaranteed Insurability
o Return of Premium
o Return of Cash Value
Fixed Return Policies
o With-profits policy
o Types of bonus
o Reversionary Bonus or Annual Bonus
o The Terminal Bonus or Final Bonus
o Vested Bonus
Unit-Linking System
o Composition of Fund
o The prices calculation of the units
o Unit allocation
o Bid/offer price
o Cash Value
o Unit Account
o Powers to Make Deductions from Funds
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o Switching between funds
o Purchase of units
o Front-end loading
o Back-End Loading
o Surplus
Element 3: General Insurance Products and their Mechanisms
General or Non-Life Insurance
Principles of General Insurance
Classification
o Fire and Property
o Engineering and Marine
o Motor Vehicle Insurance
o Own Damage
o Liability to third Parties
o Accidents to the owner
o Cash (ATM) Insurance
o Travel and Aviation Insurance
o Home and Valuables
o Commercial Property
o Fidelity Insurance
Element 4: Risk Management
The concept of risk
Types of Risks
o Pure risk
o Speculative risk
Perils and Hazard
Managing Risk
Law of Large Numbers
Principle of Insurable Interest
Insurable Risks
o Large Numbers of Homogeneous Units
o Loss Must Be Measurable
o Loss Must Be Uncertain
o Economic Hardship
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o Exclusion of Catastrophic Perils
Principle of Indemnity
Classification of Risks
o Standard Risks
o Substandard Risk
o Preferred Risks
o Declined Risks
Element 5: Identification of Clients’ Insurance Needs
Typical content of a fact find and how to use one
Appropriate recommendations based on the information collected
Seven typical life-stages of a client and the requirements and constraints at each of the
life stages
Factors that can affect the life stages for individuals
Four primary steps in identifying a client’s real financial needs
Financial planning criteria to the information collected about a client in order to identify,
quantify and prioritize a client’s real financial needs
Features of different types of product to the client’s needs
Role of the bancassurer in recommending suitable products
Element 6: Ethics and Regulatory Framework
Implications of accepting the recommendations, including any inherent risks
Steps the adviser must take when the client rejects the adviser’s recommendations
How to advise a client to switch between the financial products of different providers,
unless the switch is clearly in the best interests of the client
Importance of recommending the long term nature of a product to a client to avoid
short term cancellations of policies
Key features of handling customer complaints effectively and the need for an effective
complaints/redressal procedure
Ethical code for financial advisers
Outcomes that may result from behaving ethically and not behaving ethically
Guidelines for Bancassurance, 2010
Bancassurance Regulations, 2015
