Many column inches have been taken up with discussion of the financial implications of the General Insurance Standards Council (GISC), but its training requirements seem to have gone largely un-debated.

Having decided last year to concentrate on insurance training, the GISC rules arrived at an interesting time for me. My experience in sales and development told me that few of the brokers and intermediaries I called on over the years had a formal training plan. Since starting my own training company, I've spoken to many would-be GISC members and common themes emerge.

Smaller intermediaries will find it hard to relate to what is needed for them to comply. They will say, quite rightly, that they have been in business for many years and have never been the subject of an official complaint by a client, so why impose all this additional work?

Medium-sized intermediaries and those with a strong commercial base tend to have a different view. They are more likely to recruit experienced staff or will move people up to more responsible positions through ongoing “on-the-job” training, filling in any knowledge gaps as necessary. A formal plan, at company or individual level, is unusual. Larger companies are the most likely to have formal training plans.

What the GISC wants to see
The GISC monitors have made it clear they will be looking for some basic features, which can be summarised as follows:

  • Appropriate and proportionate training – it should be in line with job responsibilities
  • Compliance – monitors will be looking for evidence of compliant sales. Simulated sales scenarios will establish, for example, whether questions asked at quotation stage are sufficient to establish and meet client needs
  • Documentation – staff records will need to show evidence of training needs and training given. Monitors will interview staff at random to check this
  • Broad-based – monitors will want to ensure staff have a wider understanding than that which enables them to complete the job in hand.

    The last two points are most likely to cause problems. While ongoing training is part of the intermediary culture, few actually document the process at strategic or individual level.

    On the theme of broad-based training, even the best training programmes tend to overlook the “what is insurance?” theme at the induction stage. The Chartered Insurance Institute's (CII) insurance foundation certificate gives an ideal grounding in the basics, but this exam is normally sat after around 12 months' experience and many smaller intermediaries tend to overlook it as a route to training.

    One of the GISC's few specifics is that training is given in compliance with the rules. This is an area where training organisations will be asked to help, as many smaller intermediaries simply cannot devote enough time to this.

    Intermediary worries
    Recent conversations with intermediaries on the subject of GISC compliance have identified some concerns. First, few appear to appreciate that, once joined, there is an expectation of compliance with all the rules from day one, including training. Few have training plans already in place, so there is work to be done even before membership applications are submitted.

    Second, just as there is an expectation that staff have well balanced training, intermediaries express concern about whether those sent to monitor compliance are sufficiently familiar with the business to give a fair and informed review.

    Lastly, the subject of accreditation is causing concern. Many smaller intermediaries view this process as a form of “get-out clause” for the big boys. While the GISC website gives clear guidelines on the subject, there is scepticism that direct writers and major connections, such as building societies, will avoid the sort of monitoring and investigation to which intermediaries will be subjected. Only time and evidence of strict monitoring for all will allay these fears.

    So where does this leave the small to medium-sized broker and intermediary? The problem seems to start with the fact that, in the past, not many have felt the need to produce a documented business plan. Since a structured training strategy is a follow-on from the business plan, it is not surprising so few written training programmes exist.

    Most intermediaries maintain a file for each member of staff, so the addition of a training record should not be a major imposition, once a plan of action has been established.

    Most training is of the “learn as you go” variety, on a buddy system. This delivers lots of information about the job in hand, but often little about the wider implications. In order to achieve compliant sales, it is important to ensure a good solid insurance grounding, so the main features of any contract can be discussed with authority. The General Insurance Ombudsman says “mis-selling is a common cause of complaint” and evidence of this will looked for in an investigation.

    In summary, GISC membership involves immediate compliance with training guidelines. What training is given is up to the member, but it must be appropriate and proportionate to the job. Training companies offer some of the solutions, but good results will only be achieved by intermediaries and outside suppliers working together.

  • Richard Brewster FCII is the director of Innovative Training Solutions.