Competence can be maintained and regulated by different types of supervision and monitoring. Petrina Oxshott explains how to watch standards

In last week's CPD article we left things hanging with the scenario of an individual who, through careful file monitoring, had been shown to have dealt with a case in an incompetent manner. In short, a member of staff had given advice to a client to not disclose material information. Clearly, in the event of a loss the insurer would have had very good grounds to avoid the contract. You may wish to re-read last week's CPD article before you read on.

The question that the article posed was: "What action should be taken?"

To answer this we need to digress and consider the question of supervision and monitoring.

First, let us remind ourselves of the three elements of competence:

  • Knowledge
  • Understanding
  • Application to the job.

    We can go right back to the European Mediation Directive to see the requirement that we reasonably ensure that practitioners are competent to do the jobs they are given. In simple terms, therefore, a practitioner cannot be deemed competent unless they have the knowledge and understanding to do a specific job and also can apply that knowledge and understanding in doing the job (i.e. the theoretical and the practical).

    Consider the three stages of supervison:

    1) Direct supervision with no advice given to customers

    Typically this will occur when someone is new to the industry or new to a job or specific task. But it may also apply to a practitioner who is found to be not competent.

    To distinguish between the groups, one might say that, for the first two, a practitioner is "not yet competent" and in the third "not competent".

    When considering the case study in question we only have to consider the third option and whether someone is effectively `taken off the job' is a matter of degree.

    Remember that a key objective of a regulator is to protect the public (as should be the objective of an authorised firm) and you need to ask yourself whether someone telling an insured to hide information from an insurer is a serious or not serious risk.

    If your answer is the former, you may decide that the person concerned should be removed from contact with customers and fully assessed and retrained as necessary under direct supervision.

    2) Direct supervision with advice to customers

    At some stage of attaining competence, an individual will have to be allowed to work with customers. A good analogy is driving. The first stage is learning the knowledge and understanding it, followed by an indeterminent period of driving with a qualified supervisor in the car at all times. Clearly a learner cannot be expected to pass a driving test without this period.

    So it is in the supervision and monitoring of an individual to the state of competence in the insurance industry. For the inductee this will be a natural progression from not dealing with customers directly. Again we have to consider the case of someone who was believed to be competent but clearly is not.

    Will it be sufficient to take a step back to stage 2 supervision or do we have to revert to stage 1?

    3) Continuing supervision and monitoring

    Once a practitioner is deemed competent it would be natural to allow them to advise clients unsupervised (as with driving a car), but does that mean that the supervision and monitoring stops?

    Absolutely not, and this is perhaps one of the most difficult areas for the general insurance intermediary and insurer to adapt to.

    The car analogy is a good one. Once we pass out driving test we may drive unaided, but are continually monitored by the authorities in the form of not only the police (who supervise and monitor application), but also various authorities and regulations (the MOT) that check our paperwork is in order, the car we drive in is safe and that we pay our dues.

    Ultimately the objective is no different; it is designed to protect the public.

    What a firm has to do is decide the degree of continuing supervision and monitoring required of a particular job. Much will depend on the threat to the public. (Why do the police put more effort into supervison and monitoring at Christmas?)

    So look at last week's case study:

  • Should the individual concerned be taken off the job and fully reassessed and retrained?

    In my opinion, the circumstances are so serious that this must be the likely option. The advice given not only created a risk to the customer, and the firm ,but also showed - if it was not done wilfully - a complete lack of knowledge of basic insurance principles. Indeed, it is so bad that the supervisor should perhaps also consider reassessing all staff on basic insurance principles.

  • Should the individual be allowed to continue under full supervision?

    Whatever happens the individual should undergo a competence assessment. If the mistake had been less serious, a period of direct supervison might be felt to be the most appropriate course of action.

    Remember that the direct supervison does not have to be long-winded. It may just be

    for the next couple of meetings or calls with customers until the supervisor is satisfied that required standards of competence are being met.

  • Should the individual be allowed to continue as before as a `deemed competent' person?

    Of course this must be an option or the industry would grind to a halt, but this should really only occur where the identified breach of either the regulator's or the firm's rules, or the law, does not present a great risk to the public, or the firm. Such breaches might simply involve breaches of procedure - regulatory or otherwise - that might not pose a great threat. For example, forgetting to mention the firm's complaints procedure, or missing a relatively unimportant deadline by a few days.

    Often such situations can be dealt with by way of a short coaching session, but the supervisor should be sure to maintain the individual as an `alert' case for a while and maintain a more rigorous monitoring programme until satisfied that the point has been learned and the application is back in order.

    Above all the supervisor must make sure that all actions, decisions, findings and reassessment are recorded fully, both on company records and also on the individual's training file.

    You can find more idea on supervision and monitoring in the Broker T&C Toolkit. Contact for more details.

    Finally an important word for those reading Waltham Pitglow's CPD article from a fortnight ago about failure of intermediaries. Biba has reminded us that it has detailed guidance on the matter for members on its website ( ).

  • This page is edited by RW Associates, specialists in training, compliance and competence. Email,

    Using this CPD page

    For the vast majority of practitioners and indeed support and supervisory staff in our industry, CPD is about regular learning and study that is planned, recorded, timed and evaluated.

    If you are a member of a professional body with a CPD requirement, there will be certain rules regarding the quality and nature of study material, and the way in which it is recorded.

    For staff of GISC members this means recording on your individual training file what the learning was, who provided it and when.

    It might be structured, such as a course, a learning programme or exam study. But it can also be unstructured. This form of study encompasses reading the trade press, technical material or taking part in activities to support your professional body.

    Some CPD requirements are points-related (a little antiquated) and others require a time value to be allocated.

    For example, it might take one hour to read Insurance Times each week. Most of that could be put as a time value but, in reality, perhaps only an half hour was devoted to learning something. The rule is to be honest with yourself and record the time that is relevant.

    Always take time to make a note of what you felt you gained from the activity. This is useful information for anyone else considering the same activity.

    In response to the popularity of our CPD programme, each week's CPD page can now be downloaded from our website.

    We will be preparing a binder for you to keep these in alongside the results of the exercises.

    To download a PDF of this article as it appears in the magazine click here .

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