The insurance industry will spend £16m a year training as many as one million people to meet training and competency standards laid down by the new regulator the General Insurance Standards Council (GISC).
Consultant and deputy chairman of the Chartered Insurance Institute (CII) training and development forum Robin Wood told the British Insurance Law Association conference on Wednesday morning (September 27) that GISC would be “vicious” on those that flouted its training rules.
He also said many firms would face huge costs of retraining if they got their initial work wrong. He said one insurer told a conference it had devised the perfect training programme for call centre sales teams, but GISC called on the firm to point out the flaws immediately after the speech.
Wood said the industry should talk to GISC before spending cash. “The GISC will respond favourably to requests for help in interpreting its code,” Wood said.
He insisted everyone in the company should be actively trained in the GISC code. GISC has insisted people must be actively trained and not just be made aware of the code. He also said the code would be used in court. In a recent case the judge referred to six breaches of the Association of British Insurers' code.
But Wood also warned companies that they would not be able to follow the life industry example of setting deadlines and sacking staff who failed exams. He suggested that the new Human Rights Act might leave such action open to discrimination challenges.
The GISC has also not proposed qualifications as the only answer. Wood said: “There is no need for everybody to be competent to do other people's jobs and it doesn't need an exam to prove competence.”
He also said people didn't have to be academically brilliant to care about the customer, which was the purpose of the GISC rules.
“The only thing we can be sure about with exams is that the person who passed them is rather more smug than the person who failed,” Wood said.
He criticised the Chartered Institute of Bankers (CIB) for claiming it had a GISC approved multiple question exam and said GISC had given the CIB's knuckles a firm rap.
Wood said the insurance industry would have to look at the wordings of prospectuses, proposals and policies to make sure they complied with the GISC code. Training
staff to use existing wordings that subsequently proved out of line with the code would be money wasted, as the staff would have to be trained again. He added that it was time for the insurance industry to improve its administration procedures, which he described as “something of a joke”.
Training under GISC was also the subject of debate at the CII workshop entitled “Partied Out: Are professional obligations becoming too onerous?, led by law firm Berrymans Lace Mawer.
Penny Lewis, a solicitor at the firm, talked about the need to ensure staff were subject to an on-going training programme as the onus would be on the employer member under the GISC. She said: “Records of training undertaken should be encouraged. If staff leave the member will be obliged to provide them with a copy of their training record.
“Certain matters are targeted in areas in which appropriate training must be given. These are the codes; GISC products and relevant law such as agency, laundering and the Data Protection Act.”