Changes intended to strengthen corporate chartered status and broaden criteria
The CII is introducing tougher guidelines for chartered brokers and insurers that aim to raise professional standards in the industry.
Under the changes the CII will have stricter protocols, which will enable them to take away a firm’s chartered status if they are not complying with the rules.
CII director of financial services and insurance markets Steve Jenkins said the changes would strengthen the value of chartered status and also include a formalised contract that will provide more detail around certain terms and definitions.
Jenkins said: “We have always had an agreement [with firms], but formalising it provides crystal clarity on what is expected and the benefits.
“The contract is not necessarily doing anything other than codifying the agreement and using language which people in insurance find more comfortable.”
Widening scope of criteria
The criteria for chartered status has also been widened beyond firm competency to include conduct and culture.
Firms are required to make sure that 90% of their insurance staff are members of a professional body and they will also have to show that they run regular staff development programmes on behaviour and conduct.
There are currently 134 chartered brokers and 27 chartered insurers.
As part of the disciplinary and monitoring procedure, one in 10 chartered insurers and brokers will be randomly sampled each year to make sure they are compliant.
The changes follow a review of the existing standards and eligibility criteria for corporate chartered firms which started in June.
Jenkins said the changes had been driven by regulation, and feedback from insurers and brokers who said they wanted to see standards raised.
Meetings with consumer focus groups have also shown that businesses and individual customers are increasingly concerned about how ethical insurers and brokers are.
Jenkins said: “This is absolutely the right time to put our foot on the ball to make sure it meets the needs of stakeholders.
“The process we have gone through has been extensive. It should not be easy but at the same time it has to be realistic.”
The changes are due to come into force in July for new firms and when existing firms renew their chartered corporate status.