The FSA has opted for competence rather than mandatory qualifications to raise the standard of industry practitioners, but Andy Homer says certificates are important
The latest consultation from the FSA on general insurance regulation - CP187 - puts heavy emphasis on competence. The FSA wants to raise the standards of advice given to consumers, reduce the likelihood of consumers buying inappropriate cover, and improve the service standards for handling claims and complaints. It believes these objectives will be achieved more easily if the people working in the industry have a high level of knowledge and ability.
It does not, however, want to introduce mandatory qualifications - something the CII is prepared to support, notwithstanding the institute's strong commitment to the importance of examinations. The problem with relying on qualifications alone is that they provide only a snapshot of knowledge at a given moment. An individual has been able in the past, despite continuing professional development monitoring, to hide behind the certificate, never giving a further thought to the retention and development of knowledge thereafter.
So the FSA and CII believe in competence; attained and then maintained with thorough record- keeping to demonstrate compliance with the regime. Indeed, this philosophy influenced the entire development of the CII's online competency facility, ed.
Examinations and qualifications will still have an important role to play. Encouragingly the CII is reporting a 40% increase in the number of general insurance examinations against the same period last year. Why?
Qualifications demonstrate commitment, application and knowledge. They suggest dedication and professionalism. They provide consumers with a concrete and credible means of gauging the capabilities of the individual with whom they are dealing. But, just as importantly, they also give companies a competitive edge and boost business performance.
The CII will develop a tiered examination structure, with increasingly complex and demanding papers testing the knowledge of candidates as they progress through the industry and into specialisms. This facilitates continuing self-improvement and demonstrates enhanced capability, so giving consumers the ability to seek out advice and service from qualified practitioners.
One of the CII's dearest objectives is for the insurance and financial services industry to be recognised by its customers, peers and regulators as a genuine profession, in the same way as accountancy, medicine and the law. One of the bedrocks of a profession is its qualification regime. It is, therefore, essential that we have a system - one that is voluntary, but rigorous - to which we can refer when asked about the entry mechanisms to our profession.
While qualification by examination is not the route that our regulator wishes to adopt - and I repeat the CII is prepared to support that view currently - I do not discount the possibility that in the future we will need to return to this debate. To nail my colours to the mast, I'd prefer qualification, licensing and a continuous professional development regime. Am I in the minority? Let me know.
Andy Homer is the president of the CII