RMA403 - Risk Finance

Outline info
Last revision date 2018-10-25 11:59:51.187
Last review date 2018-10-25 11:59:51.188

Subject Title
Risk Finance

Subject Description
This subject is intended for students pursuing the Canadian Risk Management (CRM) designation and is accredited with the Risk and Insurance Management Society (RIMS) and the Global Risk Management Institute (GRMI). Students will learn about the third leg of the risk-management process with a comprehensive overview of techniques used to finance and manage risk. This course will approach the topic of risk by emphasizing the selection, implementation and monitoring of insurance and financial techniques used to hedge risks. Finally, students will learn the differences between risk-financing techniques and find out how to determine which risk-financing tools suit their organization's needs.

Credit Status
One credit.

Learning Outcomes
Upon successful completion of this subject the student will be able to:

Upon successful completion of this subject the student will be able to:

1. Describe Risk Financing and its importance
2. Analyze and evaluate Hazard Risk
3. Describe the purpose and operation of insurance, including risk reduction, pooling and services provided by insurers
4. Define the purpose and operation of self-insurance plans
5. Re-iterate the purpose and operation of retrospective rating plans
6. Examine reinsurance and its principal functions
7.  Define the purpose of a captive insurance company
8.  Examine the types of contractual risk transfer for hazard risks
9. Compare the various types of financial risks
10. Examine the types of capital market products used for risk financing
11. Identify the purposes of allocating hazard risk management costs.

Cheating and Plagiarism
Each student should be aware of the College's policy regarding Cheating and Plagiarism. Seneca's Academic Policy will be strictly enforced.

To support academic honesty at Seneca College, all work submitted by students may be reviewed for authenticity and originality, utilizing software tools and third party services. Please visit the Academic Honesty site on http://library.senecacollege.ca for further information regarding cheating and plagiarism policies and procedures.

All students and employees have the right to study and work in an environment that is free from discrimination and/or harassment. Language or activities that defeat this objective violate the College Policy on Discrimination/Harassment and shall not be tolerated. Information and assistance are available from the Student Conduct Office at student.conduct@senecacollege.ca.

Accommodation for Students with Disabilities
The College will provide reasonable accommodation to students with disabilities in order to promote academic success. If you require accommodation, contact the Counselling and Disabilities Services Office at ext. 22900 to initiate the process for documenting, assessing and implementing your individual accommodation needs.

Students should have strong English language skills. Familiarity with fundamental accounting and insurance principles and completion of Grade XII English and mathematics are strongly recommended.

Topic Outline
Topic Outline

  • Introduction to Risk Financing 
  • Estimating Hazard Risk 
  • Transferring Hazard Risk through insurance
  • Self-Insurance Plans 
  • Retrospective Ratings Plans 
  • Reinsurance
  • Captive Insurance  
  • Contractual Risk Transfer 
  • Transferring Financial Risk
  • Transferring Hazard Risk to the Capital Markets
  • Allocating Costs of Managing Hazard Risk

Mode of Instruction
A combination of teaching methods which may include group work, discussion, and case study through lectures that will be offered in-class and online through BlackBoard Collaborate.

Prescribed Texts
Use the Following Link to Purchase the:  https://www.theinstitutes.org/program/associate-risk-management-arm#shop

The text can be ordered directly through the American Institute of Chartered Property Casualty Underwriters (AICPCU – “The Institutes”).
Text – “Risk Financing, 6th Edition – Edited by Michael W. Elliott, 2012.
Course Guide – “Risk Financing” – CRM 56 Course Guide, 6th  Edition, American Institute for Chartered Property Casualty Underwriters/Insurance Institute of America.

Reference Material

Required Supplies

Promotion Policy

Grading Policy
A+ 90%  to  100%
A 80%  to  89%
B+ 75%  to  79%
B 70%  to  74%
C+ 65%  to  69%
C 60%  to  64%
D+ 55%  to  59%
D 50%  to  54%
F 0%    to  49% (Not a Pass)
EXC Excellent
SAT Satisfactory
UNSAT Unsatisfactory

For further information, see a copy of the Academic Policy, available online (http://www.senecacollege.ca/academic-policy) or at Seneca's Registrar's Offices.

Modes of Evaluation
Mid Term and Final Exams are required to be written on the dates specified by the Instructor. In cases of cheating or plagiarism, the College Academic Policy will prevail.  Please ensure that all assignments and reports are properly documented.

Students are referred to the following web site for the Seneca College Library MLA Style Guides, Academic Honesty Policy and Copyright guidelines:  


Dates for evaluations are specified in the weekly schedule addendum to this outline. The evaluation process may include, but is not limited to, tests, exams, assignments or presentations. Any absences or missed submissions due to medical or other reasons must be supported by medical or other appropriate documentation within one (1) week of the due date. The faculty and program area must be notified immediately in the event of a missed evaluation. Upon acceptance of the documentation, the weighting of the missed deliverable will normally be applied to the final exam.

English Competency:

The ability to communicate effectively is essential for success in business. Therefore, you must demonstrate English competency in this subject in both oral and written work. Ensure your written work includes correct sentence structure, spelling and punctuation. Always spell check, edit and proofread your work.

Students must pass the final exam with a grade of 50% and achieve an overall grade of 50% in order to pass the subject and obtain a credit with the Risk and Insurance Management Society (RIMS) as well as the Global Risk Management Institute (GRMI).

Grading is based on the following marking scheme:

Participation            10%
Mid Term Exam       40%
Final Exam              50%

Please retain this subject outline document for future educational and/or employment use.

Academic Program Manager
Jean-Pierre Patry

Approved by: Jean-pierre Patry