Having the right portfolio of skills and qualifications ahead of regulation is essential, says Tony Tudor

The regulation of insurance by the FSA has resulted in greater interest in qualifications. However, designing training and competence systems that fulfil the necessary criteria needs to be carefully focused to achieve the most effective means of making provision. As a minimum, any scheme must address the FSA requirements but must blend in-house training and monitoring with other forms of education and training to achieve the right outcomes.In terms of risks arising from the provision of insurance and related services to the public the FSA seeks to achieve a balance between consumer risk and regulatory requirements. Statutory regulation of insurance selling and administration by the FSA is scheduled to begin in October 2004 as it implements the UK provision responding to the EU Insurance Mediation Directive. The FSA does not specify qualification requirements in the case of those dealing with the public in providing and servicing insurance transactions, but will require management to be able to provide evidence of competence.Qualifications can provide a useful objective indication of achievement but must be backed up by internal systems to assess occupational competence in regulated activities. A popular solution has been for employers to use a wide-ranging initial qualification, which provides an insight into the principal features of insurance transactions so that it can be used as a foundation for further specialisation where necessary.The Certificate in Regulated General Insurance (CeRGI), offered by the Institute of Financial Services (IFS), is being used in this way by many organisations who combine its coverage with in-house courses and training covering the specific insurance products and services they offer. The ifs has carried out a lot of development work on the use of electronic examinations for the UK financial services sector and believes this offers huge benefits in convenience, accessibility and assessment. One of the unique features of CeRGI is its availability at 150 testing centres throughout the UK. Candidates can book their examinations as little as five working days ahead of the day they wish to sit, and they are issued with their result before they leave the testing centre.

Managerial requirementsAt a more fundamental level particular requirements for managers have been identified by the FSA. The implementation of the Tiner project, set up following publication of the FSA's Future Regulation of Insurance paper, has important implications for those running insurance operations in the future. A series of consultation papers from the FSA has emphasised the importance placed upon the management of insurance organisations. This was recently reinforced by comments made by John Tiner at an Insurance Institute of London lecture on 7 October. In that speech he reiterated this point. The FSA clearly see the managerial competence of the industry as the most important factor in handling the risks presented by insurance activities.In future, management will need to show that it has the skills sets necessary to meet FSA demands. The FSA's growing emphasis on principles and the responsibility they place on management to implement those principles, requires targeted qualifications that can help develop the necessary competences and provide evidence of the acquisition of the high level skills needed by future leaders. The ifs is responding by offering a BSc degree jointly awarded with the University of Manchester Institute of Science and Technology (UMIST). This has been offered for several years, but has been recently reviewed to include specially designed subjects that can help meet the needs of individuals aiming for managerial roles in the insurance sector.The UK insurance sector has an impressive range of individuals with high levels of technical skills. However, the new regulatory requirements call for characteristics associated with degree level study and the ability to manage businesses in an integrated way. The degree programme offered by the IFS and UMIST offers a way to acquire the necessary skills and knowledge to succeed in the management of the market of the future. The BSc includes subjects dealing with aspects of risk financing and insurance management that are major areas of interest to the FSA. The programme has been revised over the last year to reflect the current needs of managers across the financial services sector. It includes assessment and content designed to develop the necessary awareness; analytical and critical skills and the ability to handle complex issues and situations that are key requirements for managers in the sector.

Business riskOne of the three core subjects reflects the growing importance of being able to identify, evaluate and handle business risk. This is particularly important in the case of financial services operations where regulation is risk based and forthcoming legislation, such as Basel II and Solvency II, will affect the operations of organisations.The subject and options covering the management of insurance operations and risk financing and management have proved attractive to students from a wide range of backgrounds.There is no doubt that the correct approach to planning personal development will become increasingly important as regulation develops in the general insurance sector.So where does this leave the individual or employer? During 2004 there will be an unprecedented amount of regulation affecting insurance business and the day-to-day management of any financial services organisation.Regulation will impact on all levels of staff, all areas of the business and the processes associated with sales and servicing of products. In planning for the future it will be important to make sure that the choice of course or qualification takes into account business, personal and regulatory need.The approach the individual or employer must take is one of planning ahead. It is clear from the recent developments mentioned above that two main areas will get particular attention: distribution and management.In both cases employers and individuals will need to plan ahead. Having the right "portfolio" of qualifications and skills will be essential.Selecting an appropriate level of course or qualification will be a key consideration. In many cases formal qualifications will provide a goal for individuals. When deciding which route you might follow you need to consider what options exist both in terms of the content of qualifications and the way they can be studied.- For further information about IFS qualifications visit www.ifslearning.com, or call 01227 818 609.

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